Note 01 Company information and basis of preparation
Elopak ASA is a public limited company incorporated in NorwayElopak is a global supplier of liquid carton packaging and filling equipment, catering to both the fresh and aseptic segments. The principal activities of the company and its subsidiaries are described in Note 3Note 3. The address of the registered office and principal place of business is Industriveien 30, 3430 Spikkestad, Norway. Elopak ASA is listed on the Oslo Stock Exchange (Oslo Bors). The Board of Directors and the CEO authorized these consolidated financial statements of Elopak ASA and its subsidiaries for the year ended December 31, 2023, for issue on April 10, 2024.. The address of the registered office and principal place of business is Industriveien 30, 3430 Spikkestad, Norway. Elopak ASA is listed on the Oslo Stock Exchange (Oslo Bors). The Board of Directors and the CEO authorized these consolidated financial statements of Elopak ASA and its subsidiaries for the year ended December 31, 2023, for issue on April 10, 2024.
Elopak's material accounting policies are included in the explanatory notes to the consolidated financial statements.
Basis of preparation
The consolidated financial statements of Elopak ASA and its subsidiaries have been prepared in accordance with IFRS\u00aeAccounting Standards as adopted by the European Union (EU). The accounting policies adopted have been applied consistently to all of the years presented. Elopak also provides disclosures in accordance with requirements in the Norwegian Accounting Act (Regnskapsloven). New and amended standards adopted by Elopak do not have a material impact on the consolidated financial statements. The Elopak Group consists of Elopak ASA and its subsidiaries as set out in Note28.
The consolidated financial statements incorporate the financial state-ments of the companies controlled by Elopak ASA. The functional currency of Elopak ASA is the Euro (EUR). All numbers are presented in Euro 1\u00a0000 unless otherwise is clearly stated.
Material accounting policies
Material accounting policies and information about management judg-ments, estimates, and assumptions are provided in the respective notes throughout the consolidated financial statements. Accounting policies that relate to the financial statements as a whole or are relevant for several notes are included in this \u201cMaterial accounting policies\u201d section.
Foreign currencies
The individual financial statements of each group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Euro, which is the functional currency of the parent company and the presentation currency for the consolidated financial statements.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of Elopak\u2019s foreign operations are expressed in Euro using exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the rele-vant periods.
Impairment of non-financial assets excluding goodwill
At each reporting date, Elopak reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, Elopak estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is esti-mated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount. The increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
Financial instruments at amortized cost
Subsequent to initial recognition, non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impairment losses. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or liability or, where appropriate, a shorter period.
Financial instruments at fair value
The fair value of investments that are actively traded in organized financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm\u2019s length market transactions, reference to the current market value of another instrument which is substantially the same, discounted cash flow analysis or other valuation models.
Trade and other payables
Trade and other payables that contain significant financing components are measured at amortized cost, otherwise, they are measured at nominal value.
Adoption of new and revised International Financial Reporting Standards
A number of new standards are effective for annual periods beginning after January 1, 2023, and earlier application is permitted. However, Elopak has not early adopted the following new or amended accounting standards.
Amendments to IFRS that are mandatorily effective for an accounting period that begins on or after January 1, 2023 have been adopted. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
\u2022IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
The following new and amended standards issued but not yet effective are not expected to have a material impact on Elopak\u2019s consolidated financial statement:
\u2022Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
\u2022Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
\u2022Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
\u2022Lack of Exchangeability (Amendments to IAS 21)
Note 02 Critical accounting judgments and key sources of estimation uncertainty
In the application of Elopak\u2019s accounting policies, which are described in Note 1, management is required to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Business combinations
In a business combination, the assets acquired and liabilities assumed are valued at fair value at the time of acquisition. The various assets and liabilities are valued on the basis of different models, requiring estimates and assumptions to be made. Goodwill is the residual value in this allo-cation. Errors in estimates and assumptions can lead to an error in the split of the value between the various assets and liabilities incl. goodwill, but the sum of the total excess values will always be consistent with the purchase price paid.
The useful lives of the intangible assets acquired in a business combi-nation are assessed as either finite or indefinite and may in some cases involve considerable judgements. Intangible assets acquired with finite useful lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset
may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates.
According to IFRS 3, goodwill is to be allocated at the acquisition date, to each of the acquirer's CGUs, or groups of CGUs, which are expected to benefit from the business combination. This can include existing CGUs of the acquirer irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The identification of CGUs may require significant judgement by management.
In 2022 Elopak acquired 100% of the voting shares of Naturepak Beverage Packaging Co Ltd and consolidates the company as a subsidiary in Elopak\u2019s consolidated financial statements. In 2022 Elopak acquired 50% of the shares in GLS Elopak and consolidates the company as a subsidiary in Elopak\u2019s consolidated financial statements. The shareholder agreement provides Elopak with exposure to variable returns and power to affect the returns from GLS Elopak, which means that Elopak has control of GLS Elopak in accordance with IFRS 10. Details are presented in Note27.
War in Ukraine
In March 2022, Elopak suspended all activities in Russia and restarted operations in Ukraine after a temporary close-down. Impairment in Ukraine is presented in Note 17and discontinued operations in Russia is\u00a0presented in Note10.
Deferred tax assets
Management has exercised judgment in assessing the recognition of tax loss carryforward for Elopak\u2019s various entities and the resulting deferred tax asset. The judgment is based upon the entities\u2019 assessed ability to generate future cash flows that will enable the entities to do so. The assessments imply a degree of uncertainty relating to such future events. Tax expenses and deferred tax assets are presented in Note 9.
Tax disputes
In tax disputes, Elopak accounts for tax costs according to decisions made by local tax authorities or according to subsequent tax rulings in the actual case or similar cases. Where transfer pricing adjustments have been made, mutual agreement procedures (MAP) between the affected countries are normally available. A successful MAP procedure, as intended in the double tax treaties between countries, would result in a corresponding tax adjustment in a Group company, thus removing the tax cost for Elopak. Where a MAP process is available, Elopak recognizes tax costs according to the probability of the outcome of the MAP process. If tax authorities within the EU do not agree, taxpayers have the right to demand arbitration. Details regarding ongoing tax disputes are described in Note 9.
Note 03 Revenues
Accounting policy
The Group is a global supplier of paper-based packaging system solutions for liquid products. Revenue from contracts with customers is derived from sale of filling equipment, Pure-Pak\u00aecarton and Roll Fed packaging material (hereby denominated as cartons), closures and related services. Revenue is recognised when control of the goods or services are transferred to the customer and is presented net of returns, trade discounts, volume rebates and other customer incentives. The Group also presents lease income from lease of filling equipment.
Generally, the Group recognises revenue on a point in time basis when the customer takes title to the goods and rewards for the goods. For goods without alternative use where the Group has a legally enforceable right to payment for the goods, the Group recognises revenue over time, which generally is, as the goods are produced.
Sale of cartons and closures
Cartons are printed based on customer specifications and are therefore without alternative use. Cancellation provisions in the customer contracts, combined with background law in the legal jurisdictions give the company an enforceable right to payment for work performed to date as described in IFRS 15. Most of the customer contracts include cancellation clauses that give the company sufficient protection to conclude that there is an enforceable right to payment.
Closures are not customised and therefore with alternative use and recognised at point in time.
Sale of filling equipment
Revenue from sale of filling equipment is recognised at the point in time when control of the asset is transferred to the customer, generally when the machine is tested and accepted by the customer. Filling equipment could result in no alternative use if it would incur significant costs to rework the design and func-tion of the machine to adapt it to another customer. However, in most cases filling equipment is standard equipment and considered to have alternative use, hence they are recognised at point in time.
Sale of service
The Group offers research and development support, after sales services and technical training and main-tenance support. Revenue from support, service and training is recognised over time, as the customer simultaneously receives and consumes the benefit provided to them. The Group uses an input method in measuring progress of the services because there is a direct relationship between the Group\u2019s effort/labour hours occurred and the transfer of service to the customer.
Trade discounts, volume rebates and other incentives
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Cartons are often sold with retrospective volume discounts based on aggregate sales over several months. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. A refund liability is recognised for the expected volume discounts payable to customers in relation to sales made until the end of the reporting period.
No significant element of financing is deemed present, and the Group had no right of return in the reporting period.
Contract liabilities
Payments for filling equipment are generally made in instalments and a contract liability is recognised when a payment is received or due from a customer before the Group transfers the filling equipment. Contract liabilities are recognised as revenue when control of the filling equipment is transferred to the customer.
Contract assets
Contract assets consist of prepaid support (rebate) to customers which will be offset against contracted future purchases of cartons and features. The prepaid support is allocated to the different performance obligations, hereunder filling equipment and cartons/closures. Contract assets include over time revenue for cartons before the right to payment becomes unconditional. See Note 19for disclosure of contract assets.
Remaining performance obligations
Delivery obligations for cartons are completed within one year or less, so we have therefore elected to use exception IFRS 15.121.
The Group's revenues consist of revenue from contracts with customers (99%) and rental income from lease of filling equipment (1%). Revenues are primarily derived from the sale of cartons and closures, sales and rental income related to filling equipment and service.
Revenues specified by geographical area
EUR 1\u00a0000 | 2023 | 2022 |
USA | 219\u00a0203 | 193\u00a0839 |
Germany | 159\u00a0778 | 161\u00a0629 |
Canada | 77\u00a0705 | 68\u00a0778 |
Netherlands | 58\u00a0201 | 56\u00a0215 |
Norway | 27\u00a0120 | 25\u00a0645 |
Other | 590\u00a0036 | 517\u00a0589 |
Total revenue | 1\u00a0132\u00a0043 | 1\u00a0023\u00a0696 |
The revenues are specified by location (country) of the customer.
Revenues by product and operating segment
2023 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Cartons and closures | 755\u00a0682 | 276\u00a0739 | (4\u00a0245) | 1\u00a0028\u00a0177 |
Equipment | 52\u00a0385 | 12\u00a0114 | (14\u00a0227) | 50\u00a0272 |
Service | 52\u00a0113 | - | (971) | 51\u00a0142 |
Other | 10\u00a0278 | 1\u00a0748 | (9\u00a0575) | 2\u00a0451 |
Total revenue | 870\u00a0459 | 290\u00a0601 | (29\u00a0016) | 1\u00a0132\u00a0043 |
2022 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Cartons and closures | 671\u00a0025 | 256\u00a0522 | (3\u00a0797) | 923\u00a0750 |
Equipment | 36\u00a0307 | 2\u00a0183 | (9\u00a0907) | 28\u00a0583 |
Service | 46\u00a0036 | - | (669) | 45\u00a0367 |
Other | 32\u00a0608 | 1\u00a0830 | (8\u00a0442) | 25\u00a0996 |
Total revenue | 785\u00a0976 | 260\u00a0535 | (22\u00a0815) | 1\u00a0023\u00a0696 |
Note 04 Operating segments
Information reported to the Group's chief operating decision makers, the Group Leadership Team, for the purpose of resource allocation and assessment of segment performance is focused on two key geographical regions \u2013 EMEA and Americas. GLS Elopak is included in EMEA. Key figures representing the financial performance of these segments are presented in the following note. Refer to Note 13for disclosure of fixed assets specified by geographical area. The tables include investments in continuing operations only.
2023 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Revenue from contracts with customers | 842\u00a0304 | 288\u00a0882 | 857 | 1\u00a0132\u00a0043 |
Other income | 61 | 83 | - | 145 |
Total income from external customers | 842\u00a0365 | 288\u00a0965 | 857 | 1\u00a0132\u00a0187 |
Revenue from other group segments | 28\u00a0153 | 1\u00a0718 | (29\u00a0872) | - |
Total income | 870\u00a0519 | 290\u00a0684 | (29\u00a0015) | 1\u00a0132\u00a0187 |
Operating expenses\u200c1 | (734\u00a0923) | (230\u00a0120) | (3\u00a0034) | (968\u00a0076) |
Depreciation and amortization | (50\u00a0589) | (7\u00a0159) | (2\u00a0398) | (60\u00a0147) |
Impairment | (1\u00a0186) | - | - | (1\u00a0186) |
Operating profit | 83\u00a0821 | 53\u00a0405 | (34\u00a0446) | 102 778 |
EBITDA\u200c2 | 135\u00a0595 | 60\u00a0564 | (32\u00a0048) | 164\u00a0111 |
Adjusted EBITDA\u200c2 | 135\u00a0482 | 67\u00a0433 | (32\u00a0048) | 170\u00a0867 |
Total assets | 967\u00a0566 | 186\u00a0563 | (191\u00a0519) | 962\u00a0610 |
Purchase of non-current assets during the year | 38\u00a0353 | 1\u00a0756 | 665 | 40\u00a0774 |
2022 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Revenue from contracts with customers | 764\u00a0434 | 258\u00a0748 | 514 | 1\u00a0023\u00a0695 |
Other income | 157 | - | - | 157 |
Total income from external customers | 764\u00a0591 | 258\u00a0748 | 514 | 1\u00a0023\u00a0853 |
Revenue from other group segments | 21\u00a0542 | 1\u00a0787 | (23\u00a0329) | - |
Total income | 786\u00a0133 | 260\u00a0535 | (22\u00a0815) | 1\u00a0023\u00a0853 |
Operating expenses\u200c1 | (693\u00a0984) | (213\u00a0558) | (6\u00a0410) | (913\u00a0952) |
Depreciation and amortization | (51\u00a0564) | (7\u00a0164) | (2\u00a0800) | (61\u00a0528) |
Impairment | (6\u00a0338) | (261) | - | (6\u00a0599) |
Operating profit | 34\u00a0247 | 39\u00a0551 | (32\u00a0024) | 41\u00a0774 |
EBITDA\u200c2 | 92\u00a0149 | 46\u00a0976 | (29\u00a0224) | 109\u00a0901 |
Adjusted EBITDA\u200c2 | 94\u00a0283 | 51\u00a0466 | (26\u00a0336) | 119\u00a0413 |
Total assets | 945\u00a0626 | 157\u00a0111 | (146\u00a0258) | 956\u00a0479 |
Purchase of non-current assets during the year | 45\u00a0006 | 5\u00a0657 | (6\u00a0949) | 43\u00a0714 |
1Operating expenses include cost of materials, payroll expenses, and other operating expenses.
2See the APM disclosure for the reconciliation of EBITDA and adjusted EBITDA.
Note 05 Payroll expenses, numbers of employees, benefits etc.
The table includes investments in continuing operations only.
EUR 1\u00a0000 | 2023 | 2022 |
Salary | (151\u00a0449) | (140\u00a0957) |
Social security | (23\u00a0585) | (22\u00a0173) |
Pension defined benefit plans (Note21) | (99) | (84) |
Pension defined contribution plans (Note21) | (9\u00a0996) | (9\u00a0597) |
Other benefits | (4\u00a0495) | (3\u00a0911) |
Total | (189\u00a0623) | (176\u00a0721) |
Man-year Elopak employees (excl. equity investees) | 2\u00a0018 | 2\u00a0100 |
Executive management compensation for the year ended December 31, 2023 is disclosed in the Remuneration Report which is presented on the Elopak website.
Note 06 Share-based payments
In November 2023 the Group expanded the long-term incentive program to include senior management. Under the expanded program PSUs (Performance Share Units) of the parent are granted to members of the Group Leadership Team (GLT) and senior management. One PSU (instrument) equals one share. The eligible employees will be granted an annual award of shares from the company if certain performance criteria are met.
The key terms and conditions related to the grants are as follows:
KPI Categories | Weighted | Metric |
Financial targets | 50% | Adjusted EBITDA less normalized capex |
People and Planet targets | 20% | Environmental target (Co2emission) |
Shareholder value targets | 30% | Total shareholders return (TSR) |
The granted PSUs will be gradually vested during a 3-year period. Allocation of PSUs will be based on % of base pay, maximum allocation of 80% for CEO, 50% for Group Leadership Team members, and between 10 to 15% for senior management.
The fair value of the PSUs related to TSR is estimated at the grant date through a Monte Carlo simulation. The fair value of the PSU's related to the remaining KPIs are equal to the share price at grant date. However, the above performance condition is only considered in determining the number of PSUs that will ultimately vest.
The PSUs will under normal circumstances be exercised as soon as possible after each vesting date. There are no cash settlement alternatives. The Group does not have a past practice of cash settlement for these PSUs. The Group accounts for the PSUs as an equity-settled plan.
There is no exercise price to any of the PSUs, and therefore the weighted average exercise price for all instruments are zero.
Reconciliation of outstanding Performance share units
Number of instruments in thousands (PSU) | 2023 Number of options | 2022 Number of options |
Outstanding at 1.1\u200c | 699 | - |
Granted during the year | 1\u00a0616 | 744 |
Performance adjusted | 45 | (45) |
Forfeited during the year | - | - |
Exercised during the year\u200c | (149) | - |
Expired during the year | - | - |
Outstanding at 31.12 | 2\u00a0211 | 699 |
Exercisable at 31.12 (vested) | - | - |
Weighted average remaining contractual life outstanding at end of period | 1.87 years | 2.52 years |
The weighted average share price at the date of exercise was EUR 2.27 in 2023.
The weighted average fair value of PSU granted was EUR 1.40 during 2023 and EUR 2.32 in 2022.
The following tables list the inputs to the models used for the years ended 31 December:
Assumptions and inputs for options granted during the year | 2023 | 2022 |
FV per instrument\u200c1 | \u20ac 1.40 | \u20ac 2.32 |
Dividend yield\u200c1 | - | - |
Expected volatility\u200c1 | 21.06% | 7.95% |
Risk-free interest rate\u200c1 | 1.81% | 3.09% |
Contractual life\u200c1 | 2.55 | 2.63 |
Expected lifetime\u200c\u200c1 | 0.32 | 0.03 |
Weighted average share price (\u20ac) | \u20ac 2.02 | \u20ac 2.32 |
1Weighted average parameters at grant of instrument
Expected volatility is assessed based on historical volatility of the Company\u2019s share price, with more weight to the expected term period. The expected term of the instruments has been based on historical experience and general option holder behavior.
Components of share-based payments employee benefit expense | 2023 | 2022 |
Share based payment | (1\u00a0445) | (89) |
Social security contribution | (196) | (9) |
Total expenses related to share-based payments | (1\u00a0640) | (98) |
Note 07 Other operating expenses
EUR 1\u00a0000 | 2023 | 2022 |
Sales and administration expenses | (7\u00a0733) | (6\u00a0908) |
Occupancy and maintenance expenses | (5\u00a0201) | (4\u00a0907) |
Travel expenses | (11\u00a0313) | (8\u00a0660) |
Losses and changes in allowance for bad debt | (571) | (920) |
Consultants, auditors, lawyers, etc | (16\u00a0423) | (17\u00a0759) |
IT expenses | (10\u00a0901) | (10\u00a0332) |
Other expenses | (6\u00a0516) | (6\u00a0271) |
Total | (58\u00a0658) | (55\u00a0757) |
Note 08 Financial income and expense
Financial income
EUR 1\u00a0000 | 2023 | 2022 |
Interest income from bank deposits | 3\u00a0346 | 782 |
Other interest income\u200c1 | 285 | 8\u00a0459 |
Finance lease interest income | 555 | 637 |
Other financial income | 3\u00a0621 | 428 |
Total | 7\u00a0807 | 10\u00a0305 |
1Other interest income in 2022 includes gains from interest rate derivatives of EUR 8 399 thousand.
Financial expense
EUR 1\u00a0000 | 2023 | 2022 |
Interest expense to financial institutions | (14 402) | (5\u00a0658) |
Other interest expense\u200c1 | (4\u00a0657) | (347) |
Lease liability interest | (6\u00a0566) | (4\u00a0575) |
Other financial expenses | (6\u00a0428) | (2\u00a0453) |
Total | (32\u00a0064) | (13\u00a0033) |
1Other interest expense in 2023 includes loss from interest rate derivatives of EUR 5\u00a0518 thousand.
Note 09 Income tax
Income tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Current income tax | ||
Current income tax charge | 20\u00a0405 | 13\u00a0214 |
Adjustments in respect of current income tax of previous year | (2\u00a0934) | (2\u00a0583) |
Withholding tax | 1\u00a0107 | 2\u00a0337 |
Total current income tax | 18\u00a0578 | 12\u00a0968 |
Deferred tax | ||
Deferred tax cost | (2\u00a0519) | (1\u00a0243) |
Effect of changed tax rate and corrections previous years | (545) | 463 |
Total deferred tax | (3\u00a0064) | (780) |
Income tax expense reported in the statement of comprehensive income | 15\u00a0514 | 12\u00a0188 |
Payable tax
EUR 1\u00a0000 | 2023 | 2022 |
Payable tax opening balance | (3\u00a0185) | (2\u00a0616) |
Current income tax | 18\u00a0578 | 12\u00a0968 |
Translation | (278) | 102 |
Net tax paid | (14\u00a0356) | (13\u00a0638) |
Payable tax closing balance | 759 | (3 184) |
Reconciliation of tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Profit before income tax | 84\u00a0879 | 46\u00a0407 |
Expected tax at statutory tax rate\u200c1 | 20\u00a0371 | 11\u00a0138 |
Adjustments in respect of different local tax rates | 2\u00a0151 | 1\u00a0300 |
Non-taxable income/expense | - | - |
Share of results of joint ventures | (1\u00a0645) | (1\u00a0051) |
Adjustments in respect of income tax of previous years | (2\u00a0626) | (2\u00a0336) |
Withholding tax, non-refundable | 1\u00a0107 | 2\u00a0337 |
Adjustments in respect of changes to tax rates and regulations | (853) | 564 |
Currency translation effects | (4\u00a0630) | (2\u00a0233) |
Other differences | 1\u00a0640 | 2\u00a0468 |
Income tax expense | 15\u00a0514 | 12\u00a0188 |
Effective income tax rate | 18.3% | 26.3% |
1The expected tax at statutory tax rate of 24% (24% in 2022) is based on an estimate of where the Group taxes its profits and the corresponding applicable tax rates
Change in deferred tax on items in Other Comprehensive Income/Equity
EUR 1\u00a0000 | 2023 | 2022 |
Remeasurement gain/loss on actuarial gains and losses | 211 | 266 |
Cash flow hedges | (406) | (1\u00a0957) |
Equity transactions | (409) | (330) |
Change in deferred tax on items in Other Comprehensive Income/Equity | (603) | (2\u00a0020) |
Deferred tax
EUR 1\u00a0000 | 2023 | 2022 |
Revaluation of inventories | 16\u00a0795 | 13\u00a0564 |
Payables/receivables | 23\u00a0538 | 13\u00a0977 |
Non-current assets | (14\u00a0729) | (10\u00a0131) |
Fixed assets depreciations | (7\u00a0927) | (8\u00a0592) |
Liquid assets | (17\u00a0971) | (14\u00a0302) |
Losses available for offsetting against future taxable income | 9\u00a0427 | 9\u00a0101 |
Other differences | (292) | 1\u00a0557 |
Total deferred tax | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets | 22\u00a0883 | 22\u00a0414 |
Deferred tax liabilities | 14\u00a0041 | 17\u00a0240 |
Net deferred assets/liabilities | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets are evaluated at each balance sheet date and recognized to the extent that it is probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability shall be settled or the asset to be realized, based on tax rates and laws that have been enacted or substan-tively enacted at the balance sheet date.
Specification of tax losses carried forward \u2013 country and year of expire
EUR 1\u00a0000 | After 2025 | Indefinite | Total |
Canada | - | 805 | 805 |
Germany\u200c1 | - | 2 206 | 2 206 |
United Kingdom | - | 11 596 | 11 596 |
Norway | - | 25 794 | 25 794 |
Other | - | 598 | 598 |
- | 41 000 | 41 000 |
1Amount relate to interest limitation rules in Germany
Tax losses carried forward of EUR 14 181 thousand are not recognized as a basis for calculating unused tax losses carried forward in net deferred assets/liabilities. The amount not recognized is mainly related to the United Kingdom.
Where transfer pricing adjustments have been made, mutual agreement procedure (MAP) between the affected countries are normally available. See Note 2for further details.
In tax disputes, the Group accounts for tax costs according to decisions made by local tax authorities, or according to subsequent tax rulings in the actual case, or similar cases. A dividend distribution from Elopak Systems AG to Elopak ASA, formerly Elopak AS, in 2011 and 2014 was deemed to be taxable income for Elopak ASA in a decision by Norwegian tax office in 2017. The full tax cost of NOK 69\u00a0600 thousand was recognized and paid in accordance with the ruling at that time. Elopak lost in the Oslo district court in 2022 and Bortgarting court of appeal in March 2024. Elopak will appeal the ruling to the Supreme Court.
The Group operates in Norway, which has enacted new legislation to implement the global minimum tax rules (OECD - Pillar Two). The Group expects to be subject to these rules in relation to its operation in multiple jurisdic-tions, with the newly enacted tax legislation in Norway effective from 1 January 2024.
Note 10 Discontinued operations
On July 15, 2022 Elopak ASA and Packaging Management and Investing LLC, a company beneficially owned by management of JSC Elopak, reached an agreement for the sale and purchase of all of Elopak\u2019s shares in JSC Elopak. This represented a full divestment by Elopak from its existing Russian operations.
Transfer of the shares in JSC Elopak was carried out in February 2023 after officially approval from the Russian Government. However, the terms of the SPA implied that Elopak lost control of JSC Elopak on the date it was signed, hence the entity was deconsolidated from Q3 2022.
As Elopak\u2019s operations in Russia represented a single major geographical area of operations and previously have been presented as a separate reporting segment, Elopak is presenting the profit and loss from Russia as discon-tinued. The purchase price is payable in five annual instalments. The receivable was measured and recognized at the share\u2019s fair value on the transaction date. After initial recognition the receivable is being measured at amortized cost. Elopak ASA received the first instalment in June 2023 and part of the second installment in July 2023.
One of Elopak\u2019s former customers in Russia has won a legal claim against JSC Elopak which then has been put forward to Elopak ASA as a reimbursable claim. The legal claim has been appealed. The claim represents a contingent liability which has been recognized in the statement of comprehensive income as part of discontinued operations in 2023.
Discontinued operations
Year to date ended December 31 | ||
EUR 1\u00a0000 | 2023 | 2022 |
Revenues | - | 18\u00a0184 |
Total income | - | 18\u00a0184 |
Cost of materials | - | (15\u00a0197) |
Payroll expenses | - | (2\u00a0311) |
Depreciation, amortization and impairment | - | (9\u00a0921) |
Other operating expenses | (1\u00a0339) | (1\u00a0034) |
Total operating expenses | (1\u00a0339) | (28\u00a0463) |
Operating profit | (1\u00a0339) | (10\u00a0278) |
Net financial income | - | (2\u00a0452) |
Profit before tax | (1\u00a0339) | (12\u00a0730) |
Income tax | - | (797) |
Results from discontinued operations, net of tax | (1\u00a0339) | (13\u00a0527) |
Loss on sale of discontinued operations | - | (10\u00a0095) |
Income tax on gain on sale | - | - |
Profit/loss from discontinued operations | (1\u00a0339) | (23\u00a0622) |
Net cash flow from operating activities | - | 1\u00a0834 |
Net cash flow from investing activities | - | - |
Net cash flow from financing activities | - | (186) |
Foreign currency translations | - | 635 |
Net change in cash and cash equivalents | - | 2\u00a0283 |
Note 11 Development cost and other intangible assets
Accounting policy
Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally generated intangible asset arising from development is recognized in the statement of financial position if the recognition criteria in IAS 38 are met. After initial recognition the assets are carried at cost less any accumu-lated amortization and impairment losses. See Note 1for impairment of non-financial assets accounting policy.
Development cost and other intangible assets
2023 | ||||
EUR 1\u00a0000 | Customer relations | Development costs | IT-software | Total |
Cost at 1.1 | 26\u00a0183 | 47\u00a0814 | 79\u00a0502 | 153\u00a0499 |
Additions | - | 5\u00a0215 | 1\u00a0415 | 6\u00a0630 |
Disposals | - | (146) | (126) | (272) |
Reclassification | - | - | - | - |
Currency translation | 286 | 6 | (121) | 171 |
Cost at 31.12 | 26\u00a0469 | 52\u00a0889 | 80\u00a0671 | 160\u00a0029 |
Acc. amortization and impairment losses at 1.1 | 5\u00a0698 | 25\u00a0748 | 50\u00a0722 | 82\u00a0168 |
Current year amortization charge | 2\u00a0812 | 4\u00a0084 | 8\u00a0744 | 15\u00a0640 |
Current year impairment charge | - | - | 17 | 17 |
Amortization disposals | - | - | (29) | (29) |
Impairment disposals | - | - | - | - |
Reclassification | - | - | - | - |
Currency translation amortization | 50 | - | (109) | (59) |
Currency translation impairment | - | - | (9) | (9) |
Accumulated amortization at 31.12 | 8\u00a0560 | 29\u00a0832 | 58\u00a0761 | 97\u00a0152 |
Net accumulated impairment at 31.12 | - | - | 576 | 576 |
Carrying amount 31.12 | 17\u00a0910 | 23\u00a0057 | 21\u00a0334 | 62\u00a0300 |
Economic life | 0-8 years | 5-10 years | 3-7 years | |
Amortization method | Linear | Linear | Linear |
2022 | ||||
EUR 1\u00a0000 | Customer relations | Development costs | IT-software | Total |
Cost at 1.1 | - | 44\u00a0183 | 76\u00a0579 | 120\u00a0762 |
Business combinations | 26\u00a0824 | - | - | 26\u00a0824 |
Additions | - | 3\u00a0643 | 3\u00a0211 | 6\u00a0853 |
Disposals | - | - | (430) | (430) |
Reclassification | - | - | - | - |
Currency translation | (641) | (12) | 142 | (510) |
Cost at 31.12 | 26\u00a0183 | 47\u00a0814 | 79\u00a0502 | 153\u00a0499 |
Acc. amortization and impairment losses at 1.1 | - | 21\u00a0740 | 42\u00a0160 | 63\u00a0900 |
Current year amortization charge | 6\u00a0035 | 4\u00a0007 | 8\u00a0510 | 18\u00a0552 |
Current year impairment charge | - | - | 287 | 287 |
Amortization disposals | - | - | (362) | (362) |
Impairment disposals | - | - | - | - |
Reclassification | - | - | - | - |
Currency translation amortization | (337) | - | 130 | (207) |
Currency translation impairment | - | - | (3) | (3) |
Accumulated amortization at 31.12 | 5\u00a0698 | 25\u00a0748 | 50\u00a0155 | 81\u00a0600 |
Net accumulated impairment at 31.12 | - | - | 568 | 568 |
Carrying amount 31.12 | 20\u00a0485 | 22\u00a0066 | 28\u00a0780 | 71\u00a0331 |
Economic life | 0-8 years | 5-10 years | 3-7 years | |
Amortization method | Linear | Linear | Linear |
Customer relations include fair value of customer and supply contracts from the acquisition of GLS Elopak and Naturepak Beverage Packaging Ltd in 2022. Customer relations have an estimated economic life of 8 years. See note 27for further details.
The additions under development costs relate to the development of new filling and production machine technology.
Most of the IT-software are additions related to investments in IT system for management of materials flow and finances. The system roll-out started in 2017 and continued throughout 2023.
Research and development
The cost of research and development not eligible for capitalization which have been expensed in 2023 amounts to EUR 12\u00a0823 thousand. Comparable amount in 2022 was EUR 12\u00a0501 thousand.
Note 12 Goodwill
Accounting policy
Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impair-ment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
The table below shows the cost value, additions, disposals, impairment charges and carrying value for the various goodwill items in the Group.
Goodwill
EUR 1\u00a0000 | 2023 | 2022 |
Cost at 1.1 | 111\u00a0181 | 58\u00a0089 |
Business combinations (note27) | - | 57\u00a0089 |
Currency translation | 1\u00a0093 | (3\u00a0997) |
Cost at 31.12 | 112\u00a0274 | 111\u00a0181 |
Accumulated impairment 1.1. | 6\u00a0223 | 6\u00a0223 |
Current year impairment charge | - | - |
Currency translation impairment | (9) | - |
Accumulated impairment at 31.12 | 6\u00a0213 | 6\u00a0223 |
Carrying amount 31.12 | 106\u00a0061 | 104\u00a0958 |
Impairment test for goodwill
Goodwill is allocated to the Group's cash generating units and is tested for impairment annually or more frequently if there are indications of impairment. Testing for impairment involves the determination of the recoverable amount of the cash generating unit. The recoverable amount is determined by discounting future expected cash flows, based on the business plans for the cash generating units. The discount rate applied to the future cash flow is based on the Group's weighted average cost of capital (WACC), adapted to the market's apprehension of the risk factors for each cash generating unit. Growth rates are used to project cash flows beyond the periods covered by the business plans.
Cash generating units
The goodwill items specified above are related to the Elopak Group. Goodwill related to acquisition of Elopak Denmark A/S, Elopak AB, Elofin OY, Variopak and Naturepak Beverage Packing Co.Ltd. are allocated to the cash generating unit Europe. This CGU, renamed to Elopak EMEA following the acquisition of Naturepak Beverage Packing Co.Ltd. in March 2022, consists of Elopak\u2019s European markets, including the internal production and supply organization and Naturepak Beverage, a leading provider of fresh liquid carton and packaging systems in the MENA region with local production facilities in Morocco and Saudi Arabia. These goodwill items have a carrying value of EUR 103\u00a0204 thousand as of December 31, 2023 (EUR 102\u00a0018 thousand as of December 31, 2022). Goodwill related to the acquisition of GLS Elopak in April 2022 is allocated to a separate cash generating unit as operations are mainly in India (GLS Elopak buys raw materials, produces cartons and sells goods to the customers). This goodwill item has a carrying value of EUR 2\u00a0817 thousand as of December 31, 2023 (EUR 2\u00a0940 thousand as of December 31, 2022).
The basis to consider Elopak EMEA as one cash generating unit is the inherent structure of the market. Customers are merging across borders and are increasingly treating EMEA as one market. The historical requirement from customers to source from specific plants is no longer present. Elopak is adapting to this trend by allocating produc-tion flexibly to the plants in EMEA in order to optimize logistics and production cost. According to this development, the margins along Elopak\u2019s value chain will be subject to change from one year to another, and therefore the appropriate way to assess indicators for impairment for the EMEA business is as one unit.
Impairment test and assumptions
Recoverable amount for the cash generating units Elopak EMEA and GLS Elopak are calculated based on values in use. The cash flows that are basis for the impairment tests are based on assumptions about future sales volumes, selling prices and direct costs. These are uncertain factors. These assumptions are based on historical experience from the relevant markets, adopted budgets and the Group\u2019s expectations of market changes and other financial impacts from climate risks. Upon completion of the impairment tests in 2023 and 2022 the Group does not expect significant changes in current trade in EMEA and expected future cash flows there are mainly a continuation of observed trends. GLS Elopak is continuing its expansion, relying on a huge and one of the fastest growing carton market in the world.
Calculated recoverable amounts in the impairment tests are higher than carrying amounts, and based on the tests, it is concluded that there is no impairment in 2023 or 2022.
Determined cash flows are discounted with discount rates presented in the table below.
Detailed description of the assumptions used
Discount rate after tax | Discount rate before tax | Growth rate 2-5 years | Long-term growth rate | |||||
EUR 1\u00a0000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Elopak EMEA | 6.9% | 7.7% | 7.4% | 11.0% | - | - | - | - |
GLS Elopak | 13.1% | 12.5% | 14.1% | 17.9% | - | - | - | - |
The discount rates reflect the current markets assessment of the risk specific to the cash generating unit. The rates are estimated based on the weighted average cost of capital for similar assets in the market. The economic outlook remains uncertain in terms of continued high inflation, still increasing interest rates and heightened geopolitical risk, which all increases threat of recession. This will determine the corporate loan market and debt capital market going forward, which all saw increases in credit spreads in mid-2022 and has since then been volatile. The cost of debt in our discount rates are based on our current long-term financing, and sensitivities related to changes in this is reflected in the analysis discussed below.
Average growth rate for the future 2 to 5 years period is based on Elopak Group's expectations for the market development that the business operates in. When estimating future cash flows committed operating efficiency improvement measures are taken into account. Changes in the outcomes for these initiatives may influence future estimated cash flows.
Investment costs necessary to meet expected future growth are taken into account. Based on management's assessment, the estimated investment costs do not include investments that improve the assets performance. The\u00a0related cash flows are treated correspondingly.
Management believes that there is no reasonably possible change in any of the key assumptions that would cause the carrying value of the unit to materially exceed its recoverable amount. Sensitivity analysis have been performed based on a 0.5% increase and decrease of the discount rate and perpetual growth. The value in the low end of the range is higher than the carrying amount, hence the sensitivity analysis shows no indication of impairment.
Note 13 Property, plant and equipment
Accounting policy
Capitalized property, plant and equipment are reflected at cost less accumulated depreciation and accumu-lated impairment losses. Property, plant and equipment, other than land and properties under construction, are depreciated over their estimated useful lives, using the straight-line method and taking into consideration any residual values. See Note 1for impairment of non-financial assets accounting policy.
Property, plant and equipment
2023 | ||||
EUR 1\u00a0000 | Landand buildings | Machineryand plant | Officeand transport | Total |
Cost at 1.1 | 52\u00a0701 | 556\u00a0880 | 20\u00a0390 | 629\u00a0971 |
Additions | 256 | 34\u00a0198 | 381 | 34\u00a0835 |
Disposals | (434) | (1\u00a0602) | (370) | (2\u00a0406) |
Transfer to/from inventory / reclassification | 2\u00a0475 | (4\u00a0535) | 634 | (1\u00a0426) |
Currency translation | (305) | (2\u00a0694) | (124) | (3\u00a0123) |
Cost at 31.12 | 54\u00a0692 | 582\u00a0248 | 20\u00a0911 | 657\u00a0851 |
Acc. depreciation and impairment losses at 1.1 | 29\u00a0375 | 381\u00a0609 | 17\u00a0012 | 427\u00a0997 |
Current year depreciation charge | 1\u00a0610 | 27\u00a0981 | 1\u00a0453 | 31\u00a0043 |
Current year impairment charge\u200c | 164 | 979 | 25 | 1\u00a0168 |
Depreciation disposals | (301) | (1\u00a0072) | (361) | (1\u00a0734) |
Impairment disposals | (132) | (36) | (4) | (172) |
Depreciation transferred to inventory / reclassification | - | (1\u00a0625) | - | (1\u00a0625) |
Impairment transferred to inventory / reclassification | - | - | - | - |
Currency translation | (80) | (1\u00a0587) | (93) | (1\u00a0760) |
Acc. depreciation and impairment losses at 31.12 | 30\u00a0636 | 406\u00a0249 | 18\u00a0032 | 454\u00a0917 |
Carrying amount 31.12 | 24\u00a0056 | 175\u00a0999 | 2\u00a0879 | 202\u00a0934 |
Economic life | 0-40 years | 3-15 years | 3-12 years | |
Amortization method | Linear | Linear | Linear |
2022 | ||||
EUR 1\u00a0000 | Landand buildings | Machineryand plant | Officeand transport | Total |
Cost at 1.1 | 41\u00a0524 | 532\u00a0615 | 20\u00a0724 | 594\u00a0863 |
Business combinations | 10\u00a0184 | 11\u00a0305 | 135 | 21\u00a0623 |
Additions | 227 | 37\u00a0940 | 304 | 38\u00a0471 |
Disposals | (176) | (6\u00a0153) | (476) | (6\u00a0805) |
Discontinued operations (note10) | (296) | (24\u00a0273) | (2\u00a0082) | (26\u00a0651) |
Transfer to/from inventory / reclassification | 1\u00a0581 | (6\u00a0367) | 868 | (3\u00a0918) |
Currency translation | (344) | 11\u00a0813 | 918 | 12\u00a0387 |
Cost at 31.12 | 52\u00a0701 | 556\u00a0880 | 20\u00a0390 | 629\u00a0971 |
Acc. depreciation and impairment losses at 1.1 | 27\u00a0314 | 364\u00a0715 | 16\u00a0410 | 408\u00a0438 |
Current year depreciation charge | 1\u00a0530 | 25\u00a0831 | 1\u00a0697 | 29\u00a0057 |
Current year impairment charge | 868 | 5\u00a0272 | 173 | 6\u00a0312 |
Depreciation disposals | (169) | (4\u00a0514) | (427) | (5\u00a0110) |
Discontinued operations (note10) | (271) | (19\u00a0493) | (1\u00a0737) | (21\u00a0501) |
Impairment disposals | - | (319) | (3) | (322) |
Depreciation transferred to inventory / reclassification | - | (1\u00a0138) | - | (1\u00a0138) |
Impairment transferred to inventory / reclassification | - | (346) | - | (346) |
Currency translation | 104 | 11\u00a0602 | 900 | 12\u00a0606 |
Acc. depreciation and impairment losses at 31.12 | 29\u00a0375 | 381\u00a0609 | 17\u00a0012 | 427\u00a0997 |
Carrying amount 31.12 | 23\u00a0326 | 175\u00a0271 | 3\u00a0378 | 201\u00a0975 |
Economic life | 0-40 years | 3-15 years | 3-12 years | |
Amortization method | Linear | Linear | Linear |
The lease revenues and commitments for Carton filling machines rented to customers as well as the lease expenses and commitments for equipment leased and used in our production are disclosed in Note14.
The company has not pledged property, plant and equipment as security for liabilities.
Property, plant and equipment specified by geographical area\u200c1
EUR 1\u00a0000 | 2023 | 2022 |
Canada | 23\u00a0778 | 28\u00a0485 |
Denmark | 24\u00a0708 | 25\u00a0940 |
Germany | 71\u00a0065 | 69\u00a0025 |
India | 10\u00a0593 | 9\u00a0944 |
Morocco | 7\u00a0492 | 6\u00a0508 |
Netherlands | 46\u00a0349 | 44\u00a0547 |
Norway | 3\u00a0779 | 3\u00a0097 |
Saudi Arabia | 2\u00a0982 | 3\u00a0555 |
Ukraine | 3 271 | 3\u00a0281 |
United Kingdom | 8 671 | 7\u00a0325 |
Other | 245 | 267 |
Total | 202\u00a0934 | 201\u00a0975 |
1The split by geographical area is based on the jurisdiction of legal owner.
Other off-balance sheet commitments and contingencies
EUR 1\u00a0000 | 2023 | 2022 |
Commitments for the acquisition of property, plant and equipment | 7 012 | 1 269 |
Note 14 Leases
Accounting policy
The Group as a lessee
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases and leases of low value assets. For short-term leases and leases of low value assets, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components and instead account for any lease and associated non-lease components as a single arrangement. The Group has applied this practical expedient to all classes of right-of-use assets, except for rent of buildings.
The Group as a lessor
The group enters into lease agreements as a lessor with respect to filling machines placed with customers. These leases are classified as finance or operating leases. Whenever the terms of the lease transfer substan-tially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
See Note 1for impairment of non-financial assets accounting policy.
1. The Group as lessor - operating leases
The Group leases out filling machines under operating leases. Rental income was EUR 10\u00a0019 thousand in 2023, compared to EUR 9\u00a0326 thousand in 2022. Lease terms are between 1 year to 10 years. Options to extend the lease term or purchase the leased asset reflects market conditions at the time of exercising the option.
At the reporting date the Group has future minimum lease receivables as follows (undiscounted)
EUR 1\u00a0000 | 2023 | 2022 |
Due within year 1 | 9\u00a0578 | 11\u00a0242 |
Due within year 2 | 8\u00a0083 | 9\u00a0159 |
Due within year 3 | 6\u00a0329 | 7\u00a0863 |
Due within year 4 | 5\u00a0128 | 6\u00a0519 |
Due within year 5 | 4\u00a0195 | 4\u00a0509 |
Due after year 5 | 7\u00a0652 | 8\u00a0330 |
Total | 40\u00a0965 | 47\u00a0621 |
2. The Group as lessor - finance lease\t
The group leases out filling machines under finance leases. Generally, lease terms are between 5 years to 10 years. Options to extend or purchase the leased asset will normally reflect market pricing.
Amounts receivable under finance leases (undiscounted)
EUR 1\u00a0000 | 2023 | 2022 |
Due within year 1 | 2\u00a0150 | 2\u00a0648 |
Due within year 2 | 1\u00a0581 | 1\u00a0870 |
Due within year 3 | 1\u00a0493 | 1\u00a0302 |
Due within year 4 | 1\u00a0083 | 1\u00a0213 |
Due within year 5 | 769 | 804 |
Due after year 5 | 1\u00a0684 | 2\u00a0345 |
Total receivables under finance leases, undiscounted | 8\u00a0760 | 10\u00a0181 |
Unearned finance income | 1\u00a0676 | 2\u00a0162 |
Total receivables under finance leases, discounted | 7\u00a0084 | 8\u00a0020 |
There is no impairment loss allowance related to the finance lease receivables in 2023 and 2022. Credit risk related to the filling machine lease agreements is considered very low. Credit risk is considered insignificant due to right to require return of the machine in case of default. The average effective interest rate contracted is approximately 6.67% per annum.
The Group as lessee
The Group leases several assets including buildings, plants, cars and filling machines.
Right-of-use assets
December 31, 2023 | ||||
EUR 1\u00a0000 | Property and buildings | Machinery | Office and transport | Total |
Carrying amount 1.1 | 52\u00a0148 | 13\u00a0968 | 10\u00a0668 | 76\u00a0784 |
Additions and adjustments | 3\u00a0896 | 16\u00a0043 | 3\u00a0261 | 23\u00a0200 |
Disposals | (6) | (33) | (111) | (151) |
Current year depreciation charge | (4\u00a0442) | (5\u00a0177) | (3\u00a0844) | (13\u00a0463) |
Carrying amount at 31.12 | 51\u00a0596 | 24\u00a0800 | 9\u00a0974 | 86\u00a0370 |
December 31, 2022 | ||||
EUR 1\u00a0000 | Property and buildings | Machinery | Office and transport | Total |
Carrying amount 1.1 | 38\u00a0652 | 12\u00a0986 | 11\u00a0314 | 62\u00a0952 |
Additions and adjustments | 22\u00a0258 | 6\u00a0307 | 3\u00a0278 | 31\u00a0842 |
Disposals | (3\u00a0956) | (28) | (100) | (4\u00a0084) |
Current year depreciation charge | (4\u00a0806) | (5\u00a0288) | (3\u00a0823) | (13\u00a0918) |
Impairment losses | - | (8) | - | (8) |
Carrying amount at 31.12 | 52\u00a0148 | 13\u00a0968 | 10\u00a0668 | 76\u00a0784 |
The Group has no significant purchase options except from one purchase option related to the High Bay ware-house lease agreement commenced in November, 2022. This purchase option can be exercised in 2042 and purchase price is market value at exercise date. An exercise of the purchase option is not considered to be reason-ably certain, hence it is not recognised.
In 2023, expenses related to short-term leases were EUR 20 thousand, expenses related to low value assets were EUR 610 thousand and expenses related to variable payments not included in the measurement of lease liabilities were EUR 222 thousand.
The Group has signed contracts for Tethered Cap and other closure lines with a lease term of 5 years and a nominal value of EUR 20\u00a0839 thousand, which will commence at different stages during 2024.
Lease liabilities
EUR 1\u00a0000 | Note | 2023 | 2022 |
Current lease liabilities | 23\u00a0096 | 17\u00a0139 | |
Non-current lease liabilities | 78\u00a0424 | 73\u00a0536 | |
Total | 101\u00a0520 | 90\u00a0674 |
At the reporting date the Group has lease liabilities as follows (undiscounted)
EUR 1\u00a0000 | 2023 | 2022 |
Due within year 1 | 25\u00a0505 | 20\u00a0751 |
Due within year 2 | 18\u00a0597 | 20\u00a0449 |
Due within year 3 | 17\u00a0262 | 14\u00a0208 |
Due within year 4 | 14\u00a0637 | 12\u00a0282 |
Due within year 5 | 11\u00a0258 | 10\u00a0381 |
Due after year 5 | 70\u00a0132 | 75\u00a0623 |
Total | 157\u00a0390 | 153\u00a0694 |
Note 15 Investment in joint ventures
Accounting policy
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control; that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.
The results and assets and liabilities of a joint venture company are incorporated in these financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the equity investee. The statement of comprehensive income reflects the share of the results of operations of the associate (net after tax). Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the joint venture company recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. After application of the equity method the Group determines whether it is necessary to recognise an additional impairment on the individual investments. The Group determines if there are indications of impairment, and if this is the case, the Group calculates the impairment loss as the difference between the recoverable amount of the joint venture and its carrying value.
The investment in the joint ventures specified below have been accounted for in accordance with the equity method of accounting. Lala Elopak S.A. de C.V. is a carton production plant in Mexico selling cartons to Americas. Impresora Del Yaque is a carton production facility in the Dominican Republic also selling cartons to Americas. Elopak Nampak Africa Limited is a sales centre in Kenya, established in 2020, selling cartons to Africa. The investments are joint ventures because the investment partners have the same rights and control in the companies.
Investments in joint ventures
2023 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak NampakAfrica Ltd | Total |
Ownership - and voting share | 49% | 51% | 50% | |
Carrying amount 1.1 | 24\u00a0210 | 10\u00a0707 | (244) | 34\u00a0673 |
Income from joint venture companies | 4\u00a0730 | 2\u00a0139 | (14) | 6\u00a0855 |
Dividend received | (4\u00a0004) | (1\u00a0907) | - | (5\u00a0911) |
Recognized to equity | (6) | - | - | (6) |
Currency translation | 2\u00a0874 | (777) | - | 2\u00a0097 |
Carrying amount 31.12 | 27\u00a0805 | 10\u00a0163 | (258) | 37\u00a0709 |
2022 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak NampakAfrica Ltd | Total |
Ownership - and voting share | 49% | 51% | 50% | |
Carrying amount 1.1 | 19\u00a0390 | 8\u00a0270 | (133) | 27\u00a0527 |
Income from joint venture companies | 2\u00a0665 | 1\u00a0824 | (112) | 4\u00a0378 |
Recognized to equity | (14) | - | - | (14) |
Currency translation | 2\u00a0169 | 613 | - | 2\u00a0783 |
Carrying amount 31.12 | 24\u00a0210 | 10\u00a0707 | (244) | 34\u00a0673 |
Summarized financial information
2023 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak Nampak Africa Ltd | Total |
Revenue | 95\u00a0362 | 24\u00a0703 | 21 | 120\u00a0086 |
Operating profit | 13\u00a0281 | 4\u00a0267 | (29) | 17\u00a0519 |
Profit after tax (loss) | 9\u00a0653 | 4\u00a0195 | (28) | 13\u00a0820 |
Other comprehensive income that may be reclassified to net income | 5\u00a0866 | (1\u00a0523) | - | 4\u00a0342 |
Total comprehensive income | 15\u00a0518 | 2\u00a0672 | (28) | 18\u00a0163 |
Current assets | 52\u00a0932 | 18\u00a0786 | 125 | 71\u00a0842 |
Non-current assets | 16\u00a0255 | 3\u00a0053 | 1 | 19\u00a0309 |
Current liabilities | 16\u00a0234 | 1\u00a0911 | 75 | 18\u00a0221 |
Non-current liabilities | 2\u00a0969 | - | 567 | 3\u00a0536 |
Equity | 49\u00a0984 | 19\u00a0928 | (517) | 69\u00a0395 |
Group's share of profit after tax (loss) | 4\u00a0730 | 2\u00a0139 | (14) | 6\u00a0855 |
2022 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak Nampak Africa Ltd | Total |
Revenue | 78\u00a0865 | 25\u00a0471 | 63 | 104\u00a0400 |
Operating profit | 7\u00a0431 | 4\u00a0361 | (208) | 11\u00a0584 |
Profit after tax (loss) | 5\u00a0440 | 3\u00a0577 | (224) | 8\u00a0794 |
Other comprehensive income that may be reclassified to net income | 4\u00a0427 | 1\u00a0202 | - | 5\u00a0630 |
Total comprehensive income | 9\u00a0867 | 4\u00a0780 | (224) | 14\u00a0423 |
Current assets | 40\u00a0181 | 21\u00a0572 | 188 | 61\u00a0940 |
Non-current assets | 15\u00a0476 | 3\u00a0459 | 1 | 18\u00a0936 |
Current liabilities | 10\u00a0495 | 3\u00a0208 | 171 | 13\u00a0874 |
Non-current liabilities | 2\u00a0499 | - | 507 | 3\u00a0006 |
Equity | 42\u00a0663 | 21\u00a0823 | (489) | 63\u00a0997 |
Group's share of profit after tax (loss) | 2\u00a0665 | 1\u00a0824 | (112) | 4\u00a0378 |
Voting share
Ownership/voting share | 2023 | 2022 |
Lala Elopak S.A. de C.V. | 49% | 49% |
Impresora Del Yaque | 51% | 51% |
Elopak Nampak Africa Limited | 50% | 50% |
Note 16 Other non-current assets
EUR 1\u00a0000 | 2023 | 2022 |
Contract assets | 3\u00a0311 | 3\u00a0775 |
Non-current finance lease receivables (Note14) | 5\u00a0113 | 5\u00a0865 |
Financial instruments (Note25) | 3\u00a0521 | 6\u00a0811 |
Other non-current assets | 2\u00a0948 | 3\u00a0390 |
Carrying amount 31.12 | 14\u00a0892 | 19\u00a0841 |
Note 17 Impairment Ukraine
Due to the war in Ukraine, Elopak suspended all activities in Russia, and restarted operations in Ukraine after a temporary close-down, in March 2022. Consequently, the Group has tested assets in Ukraine for impairment and recognized an impairment loss through the statement of comprehensive income. Ukraine is included in the oper-ating segment EMEA.
The impairment loss is calculated using a weighted average of possible scenarios including continuing operations and closing operations.
The Russian operation is classified as discontinued operations and all assets and liabilities related to the Russian operation were deconsolidated from the Elopak consolidated financial statements due to loss of control on July 15, 2022. See note 10Discontinued operations.
Due to the circumstances in Ukraine the impairment assessment has been updated at the end of each quarter. No\u00a0deferred tax asset is recognized related to the operations in Ukraine. After impairment, the recoverable amount of property, plant and equipment is EUR 2\u00a0984 thousand, while all other non-current assets are written down to recoverable amount of zero.
Balance sheet effect of impairment
EUR 1\u00a0000 | December 31 2023 | December 31 2022 |
ASSETS | ||
Non-current assets | ||
Development cost and other intangible assets | (17) | (26) |
Deferred tax assets | - | (1\u00a0555) |
Property, plant and equipment | (266) | (4\u00a0155) |
Right-of-use assets | - | (8) |
Other non-current assets | - | - |
Total non-current assets | (284) | (5\u00a0744) |
Current assets | ||
Inventory | 451 | (1\u00a0883) |
Trade receivables | 8 | (32) |
Other current assets | 4 | (230) |
Total current assets | 464 | (2\u00a0145) |
Total assets | 180 | (7\u00a0889) |
EUR 1\u00a0000 | 2023 | 2022 |
COMPREHENSIVE INCOME | ||
Cost of materials | 451 | (2\u00a0079) |
Depreciation, amortization and impairment | (284) | (4\u00a0189) |
Other operating expenses | 12 | (67) |
Operating profit | 180 | (6\u00a0335) |
Financial items | - | - |
Income tax | - | (1\u00a0554) |
Profit/loss | 180 | (7\u00a0889) |
Note 18 Inventory
Accounting policy
Cost is calculated using the FIFO cost formula for cartons, filling machines and spare parts.
Inventory
2023 | ||||
EUR 1\u00a0000 | Raw materials | Work in progress | Finished goods | Total |
Cost 31.12 | 27\u00a0621 | 93\u00a0456 | 82\u00a0424 | 203\u00a0502 |
Write down 01.01 | 3\u00a0755 | 19 | 7\u00a0100 | 10\u00a0874 |
Realised | (291) | - | (424) | (715) |
Write down | 93 | - | 1\u00a0060 | 1\u00a0153 |
Write down per 31.12. | 3\u00a0558 | 19 | 7\u00a0736 | 11\u00a0313 |
Carrying amount 31.12 | 24\u00a0063 | 93\u00a0437 | 74\u00a0688 | 192\u00a0188 |
2022 | ||||
EUR 1\u00a0000 | Raw materials | Work in progress | Finished goods | Total |
Cost 31.12 | 34\u00a0579 | 84\u00a0954 | 78\u00a0549 | 198\u00a0082 |
Write down 01.01 | (307) | - | 5\u00a0142 | 4\u00a0835 |
Realised | 308 | - | (615) | (308) |
Write down | 3\u00a0754 | 19 | 2\u00a0573 | 6\u00a0347 |
Write down per 31.12. | 3\u00a0755 | 19 | 7\u00a0100 | 10\u00a0874 |
Carrying amount 31.12 | 30\u00a0824 | 84\u00a0934 | 71\u00a0449 | 187\u00a0208 |
Note 19 Trade receivables and other current assets
Accounting policy
Trade and other receivables that are held to collect contractual cash flows only and the contractual cash flows are solely principal and interest are measured at amortised cost using the effective interest method, less any impairment. Short-term receivables are measured at nominal values reduced by appropriate allow-ances for expected credit losses.
Accounts receivables which are subject to non-recourse factoring are classified as instruments held to collect contractual cash flows and for sale and are measured at fair value through other comprehensive income until they are derecognised.
See Note 1for non-derivative financial instruments accounting policy.
Impairment of financial assets
The loss allowance for expected credit losses is mostly related to individual assessments and is recognised for financial asset measured at amortised cost or fair value through OCI, contract assets under IFRS 15, lease receivables under IFRS 16 and certain written loan commitments and financial guarantee contracts. Loss allowance is assessed at each reporting day. Loss allowances for trade receivables, contract assets and lease receivables that do not contain a significant financing component are measured at an amount equal to lifetime expected credit losses. Loss allowances for trade receivables, contract assets and lease receivables that do contain a significant financing component are measured at an amount equal to the lifetime expected credit losses including interest revenues. When there is no objective evidence of impairment, interest reve-nues are calculated based on gross carrying amount, otherwise interests are calculated based on the net carrying amount. The amount of the loss is recognised in profit or loss. In case of changes to expected credit losses in a subsequent period, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date. Any subsequent reversal of an impairment loss is recognised in profit or loss.
Trade receivables
EUR 1\u00a0000 | 2023 | 2022 |
Accounts receivable, gross | 115\u00a0000 | 106\u00a0243 |
Allowances | (4\u00a0758) | (4\u00a0045) |
Carrying amount 31.12 | 110\u00a0243 | 102\u00a0197 |
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
2023 | |||
EUR 1\u00a0000 | Gross carrying amount | Loss rate | Expectedcredit loss |
Current | 96\u00a0131 | 3.3% | 3\u00a0218 |
Up to 7 days | 7\u00a0863 | - | - |
Up to 30 days | 4\u00a0292 | 0.3% | 13 |
30-60 days | 2\u00a0228 | 0.3% | 6 |
60-90 days | 1\u00a0102 | 0.1% | 1 |
Over 90 days | 3\u00a0383 | 44.9% | 1\u00a0519 |
Total | 115\u00a0000 | 4.1% | 4\u00a0758 |
2022 | |||
EUR 1\u00a0000 | Gross carrying amount | Loss rate | Expectedcredit loss |
Current | 84\u00a0354 | 2.9% | 2\u00a0443 |
Up to 7 days | 8\u00a0422 | - | - |
Up to 30 days | 3\u00a0677 | 0.3% | 11 |
30-60 days | 2\u00a0558 | 6.6% | 169 |
60-90 days | 1\u00a0416 | 2.0% | 29 |
Over 90 days | 5\u00a0815 | 24.0% | 1\u00a0395 |
Total | 106\u00a0243 | 3.8% | 4\u00a0045 |
Movement in the allowance for expected credit losses of trade receivables
EUR 1\u00a0000 | 2023 | 2022 |
As at 1.1 | 4\u00a0045 | 4\u00a0231 |
Business combinations (note27) | - | 802 |
Change in provision for expected credit losses | 473 | (721) |
Change in write-off | (98) | (16) |
Foreign exchange movement | 337 | (251) |
Carrying amount 31.12 | 4\u00a0757 | 4\u00a0045 |
Other current assets
EUR 1\u00a0000 | 2023 | 2022 |
Project income earned, not invoiced | 44\u00a0643 | 39\u00a0195 |
Prepaid support | 1\u00a0832 | 2\u00a0129 |
Contract assets | 46\u00a0475 | 41\u00a0324 |
Prepayments and accrued expenses | 20\u00a0519 | 14\u00a0476 |
V.A.T. receivable | 20\u00a0820 | 24\u00a0639 |
Accrued income tax receivables | 6\u00a0238 | 5\u00a0382 |
Financial instruments | 1\u00a0064 | 999 |
Finance leasing receivable short term | 1\u00a0971 | 2\u00a0362 |
Current investments of shares | - | 4\u00a0829 |
Other current receivables | 16\u00a0632 | 15\u00a0202 |
Carrying amount 31.12\u200c1 | 113\u00a0720 | 109\u00a0214 |
1Contract assets consist of prepaid rebates to customers which will be offset against contracted future sales of cartons and closures. Total of prepaid support was EUR 5\u00a0143 thousand in 2023 and EUR 5\u00a0904 thousand in 2022. Based on customer knowledge and experience of very few losses, the credit risk related to prepaid support is considered insignificant.
Note 20 Equity and shareholders information
Elopak ASA was established with share capital of NOK 376\u00a0906\u00a0620 (EUR 50\u00a0155\u00a0321) and the total number of shares outstanding for Elopak ASA is 269\u00a0219\u00a0014, each with a face value of NOK 1.4 (EUR 0.19). At December 31, 2023, the company has a share capital of NOK 376\u00a0532\u00a0338 (EUR 50\u00a0104\u00a0463) and the total number of shares outstanding for Elopak ASA is 268\u00a0951\u00a0670, each with a face value of NOK 1.4 (EUR 0.19).
Treasury shares / Share-based bonus
Elopak ASA\u2019s ordinary general meeting on May 11, 2023 approved a share buy-back program for the repurchase of up to NOK 37\u00a0690\u00a0662, meaning up to 26.9 million shares at nominal value of NOK 1.40/share. The shares acquired under the share buy-back program will be used to meet the Company\u2019s obligations towards employees who participate in the Company\u2019s long-term incentive plan. As of December 31, 2023, the balance of treasury shares is 267\u00a0344. The treasury share capital is EUR 51 thousand and the treasury share premium is EUR 545 thousand.
Dividend
The Board approved a dividend of NOK 0.86 per share for the financial year 2022 on May 12, 2023. The dividend payment was EUR 19\u00a0634 thousand based on 269\u00a0219\u00a0014 outstanding shares, of which EUR 11\u00a0747 thousand was paid to Ferd AS. The Board of Directors will propose to the Annual General Meeting a dividend of NOK 1.46 per share for 2023.
Share capital
2023 | |||
Number of shares | Ordinaryshares issued | Treasuryshares | Ordinary shares outstanding |
Shares at 1.1 | 269\u00a0219\u00a0014 | (5\u00a0519) | 269\u00a0213\u00a0495 |
Treasury shares purchased | - | (410\u00a0540) | (410\u00a0540) |
Treasury shares re-issued | - | 148\u00a0715 | 148\u00a0715 |
Shares at 31.12 | 269\u00a0219\u00a0014 | (267\u00a0344) | 268\u00a0951\u00a0670 |
2022 | |||
Number of shares | Ordinaryshares issued | Treasuryshares | Ordinary shares outstanding |
Shares at 1.1 | 269\u00a0219\u00a0014 | - | 269\u00a0219\u00a0014 |
Treasury shares purchased | - | (170\u00a0000) | (170\u00a0000) |
Treasury shares re-issued | - | 164\u00a0481 | 164\u00a0481 |
Shares at 31.12 | 269\u00a0219\u00a0014 | (5\u00a0519) | 269\u00a0213\u00a0495 |
Basic and diluted earnings per share
(EUR 1\u00a0000, except number of shares) | 2023 | 2022 |
Profit attributable to Elopak shareholders | 67\u00a0061 | 10\u00a0856 |
Issued ordinary shares at beginning of period, adjusted for share split in the period | 269\u00a0213\u00a0495 | 269\u00a0219\u00a0014 |
Effect of shares issued | (62\u00a0416) | (3\u00a0024) |
Weighted-average number of ordinary shares in the period | 269\u00a0151\u00a0079 | 269\u00a0215\u00a0990 |
Basic and diluted earnings per share attributable to Elopak shareholders (in EUR) | 0.25 | 0.04 |
The Group's top 20 shareholders
Shareholder's name | Total shareholding |
Ferd AS\u200c1 | 60.04% |
Nippon Paper Industries Co., Ltd. | 5.00% |
Pareto Asset Management AS | 4.24% |
Boldhaven | 3.46% |
Folketrygdfondet | 3.29% |
Fidelity International | 2.82% |
Artemis Investment Management LLP | 2.19% |
Pictet Asset Management Ltd. | 1.14% |
Oddo BHF Asset Management S.A.S. | 1.08% |
Arctic Fund Management AS | 0.93% |
DNB Asset Management AS | 0.91% |
Allspring Global Investments LLC | 0.82% |
Skagen AS | 0.79% |
Ind\u00e9pendance et Expansion AM S.A | 0.66% |
GW&K Investment Management, LLC | 0.63% |
UBS Asset Management (Switzerland) | 0.58% |
T D Veen AS | 0.43% |
Clearstream Banking SA | 0.41% |
MFS Investment Management | 0.40% |
Wenaasgruppen AS | 0.38% |
1Elopak ASA is a subsidiary of Ferd AS and is consolidated within their consolidated financial statements which can be found on their website.
The Executive team own directly, or indirectly the following number of shares in the Group
Executive team | Total number of shares |
Thomas K\u00f6rmendi, CEO | 396 105 |
Bent Axelsen, CFO | 203 833 |
Patrick Verhelst, Chief Marketing Officer | 61 562 |
Wolfgang Buckhremer, Chief Technology Officer | 78 638 |
Ivar Jevne, EVP Packaging and Procurement | 239 432 |
Stephen Naumann, EVP Region Europe North, India and CIS | 190 055 |
Finn T\u00f8rjesen, EVP Region Europe South and MENA | 79 816 |
Lionel Ettedgui, EVP Region Americas | 95 553 |
Nete Bechmann, Chief Human Resource Officer | 35\u00a0447 |
Dag Gr\u00f6nevik, EVP Equipment and Service | 9\u00a0660 |
Total | 1 390 101 |
Note 21 Employee retirement benefit plans
Defined contribution plans
The Group operates defined contribution pension plans where the plans are held separately from those of the Group in funds under control of trustees. The only obligation of the Group is to make the specified contributions.
Defined benefit plans
The Group also runs pension plans that grant the employees a right to defined future benefits. The benefits are mainly dependent on years of service, the level of salary at age of retirement and size of contributions from the national insurance. The obligations are partly covered through insurance companies. Elopak has unfunded retiree medical insurance plans for certain of its employees located in the United States.
Pension liability
EUR 1\u00a0000 | 2023 | 2022 |
Defined benefit obligations | (2\u00a0502) | (2\u00a0668) |
Net pension liability | (2\u00a0502) | (2\u00a0668) |
Pension expense
EUR 1\u00a0000 | 2023 | 2022 |
Defined benefit plans net | (99) | (84) |
Defined contribution plans | (9\u00a0996) | (9\u00a0597) |
Total pension expense | (10\u00a0095) | (9\u00a0681) |
Defined benefit plans are subject to actuarial calculations. The estimated pension cost for pension benefit plans in 2023 is EUR 99 thousand and in 2022 is EUR 84 thousand.
Note 22 Interest-bearing loans and borrowings
Accounting policy
See Note 1for non-derivative financial instruments accounting policy.
Interest-bearing loans and borrowings
2023 | 2022 | |||
EUR 1\u00a0000 | Available | Utilised | Available | Utilised |
Current liabilities to financial institutions | 56\u00a0857 | 19\u00a0333 | 57\u00a0073 | 21\u00a0682 |
Non-current liabilities to financial institutions | 400\u00a0000 | 224\u00a0433 | 400\u00a0000 | 304\u00a0033 |
Total | 243\u00a0767 | 325\u00a0715 |
Repayment profile
EUR 1\u00a0000 | 2023 | 2022 |
2023 | - | 21 682 |
2024 | 19 333 | - |
2025 | 225 000 | 305 000 |
2026 | - | - |
Total | 244 333 | 326 682 |
Weighted average interest rates on long-term loans
2023 | 2022 | ||||
EUR 1\u00a0000 | Rate | In Ccy | In EUR | In Ccy | In EUR |
EUR | 4.11% | 225\u00a0000 | 225\u00a0000 | 305\u00a0000 | 305\u00a0000 |
Total | 225\u00a0000 | 305\u00a0000 |
The values above are gross amounts excluding amortised borrowing costs.
The long-term loans are drawn under a EUR 400 000 thousand multi currency revolving credit facility. The facility is available until May 2025. Elopak has started a process to refinancing the long-term loan financing and will aim to have concluded the refinancing in the first half of 2024. Amounts are shown net of prepaid transaction costs. Changes to the Groups debt profile reflect changes in the functional currency of entities within the Group.
Elopak has a Supply Chain Financing programme towards the largest suppliers to take advantage of supplier cash discounts and optimize working capital.
Accounts receivables factoring facilities
EUR 1\u00a0000 | Available | 2023 | Available | 2022 |
Non-recourse | 180\u00a0141 | 45\u00a0010 | 179\u00a0275 | 41\u00a0823 |
Total | 45\u00a0010 | 41\u00a0823 |
Elopak factors its receivables in the ordinary course of business.
Note 23 Other current liabilities
EUR 1\u00a0000 | 2023 | 2022 |
Provisions | 3\u00a0343 | 681 |
Accrued expenses | 70\u00a0330 | 70\u00a0547 |
Derivatives (Note25) | 8\u00a0231 | 4\u00a0268 |
Prepaid from customers | 38\u00a0636 | 25\u00a0932 |
Total | 120\u00a0540 | 101\u00a0429 |
Note 24 Capital management
Elopak\u2019s level of capital and how this is managed relates closely to the company\u2019s risk profile and the company\u2019s ability to withstand turbulent times. The main objectives when Elopak assess their capital management is to mini-mize financing costs, while maintaining adequate liquidity and flexibility for short-term liquidity needs and M&A activities. The policy is to maintain unutilised and available liquidity of 40% of utilised debt. Elopak\u2019s financial guiding is to pay out dividends equal to 50% - 60% of adjusted net profits.
All financing activities are managed by the central Treasury at the parent company level. The capital needs of Elopak subsidiaries are mainly covered by granting internal loans or by equity injection where applicable. The short-term liquidity needs of Elopak group companies are managed at group level through the Elopak internal bank and cash-pooling. The financial guiding also targets constantly that the company reduces its gearing ratio and to be ~2.0x EBITDA on a mid-term basis.
The financial covenants under Elopak\u2019s Revolving Credit Facility are limited to a maximum gearing ratio (Net Interest Bearing Debit/EBITDA) of 4.75 and to hold a minimum equity of EUR 100 million at all times.
Note 25 Financial risk management
Accounting policy
The Group enters into derivative financial instruments to manage its exposure to interest rate, foreign exchange rate and raw material risk arising from operational, financing and investment activities. In accord-ance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship. The Group designates certain derivatives as either hedge of the fair value of recognised assets or liabilities or firm commitments (fair value hedges), or hedge of highly probable forecast transactions or hedge of foreign currency risk of firm commitments (cash flow hedges).
At inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.
Balance sheet management
The Group manages the balance sheet to ensure a healthy financial position and liquidity. This is done through an annual budgeting process followed by performance management and forecasting updates to ensure adequate financial flexibility and liquidity for the company. The Group\u2019s main bank covenants, especially the net interest bearing debt/ EBITDA, are monitored closely on a continuous basis to ensure compliance at all times.
Financial risk policy
The Group is exposed to market risk, credit risk and liquidity risk. Risk management activities are governed by appropriate policies and procedures. Risks are identified, measured and managed in accordance with the Group's policies and risk objectives. It is the Group's policy that no trading in derivatives for speculative purposes shall be undertaken. There have been no significant changes in the management of risks related to financials during the period.
Categories of financial risk to operational business
1. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency risk, commodity price risk and interest rate risk. Elopak buys derivatives to manage market risks and seeks to apply hedge accounting to manage volatility in profit or loss. Hedge accounting is applied to all currency and commodity derivatives, while interest rate derivatives are not subject to hedge accounting.
Derivatives
December 31, 2023 | December 31, 2022 | |||||
EUR 1\u00a0000 | Assets | Liabilities | Total | Assets | Liabilities | Total |
Currency derivatives | 904 | 7\u00a0398 | (6\u00a0494) | 747 | 1\u00a0280 | (534) |
Commodity derivatives | 31 | 2\u00a0408 | (2\u00a0377) | - | 3\u00a0318 | (3\u00a0318) |
Interest derivatives | 3\u00a0650 | 2\u00a0105 | 1\u00a0545 | 7\u00a0063 | - | 7\u00a0063 |
Total | 4\u00a0585 | 11\u00a0911 | (7\u00a0326) | 7\u00a0810 | 4\u00a0598 | 3\u00a0212 |
The full fair value of a derivative is classified as \"Other non-current assets or \"Other non-current liabilities\" if the remaining maturity of the derivative is more than 12 months and as \"Other current assets\" or \"Other current liabilities\", if the maturity of the derivative is less than 12 months. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unad-justed quoted prices for identical assets and liabilities, with changes in fair value are therefore recognized in the income statement. No other material financial assets or liabilities are measured at fair value through profit or loss.
Where eligible, derivatives used for hedging are designated in cash flow hedge accounting relationships.
Currency risk
Elopak's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activi-ties, financing of foreign operations and the Group's net investments in foreign subsidiaries.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
Assets | Liabilities | |||
Currency | 2023 | 2022 | 2023 | 2022 |
BGN | 241 | 222 | 246 | 238 |
CAD | 96\u00a0376 | 22\u00a0928 | 64\u00a0044 | 95\u00a0182 |
CHF | 4\u00a0800 | 4\u00a0337 | 4\u00a0771 | 4\u00a0252 |
CZK | 62\u00a0929 | 57\u00a0588 | 62\u00a0821 | 68\u00a0479 |
DKK | 2\u00a0809\u00a0965 | 2\u00a0494\u00a0348 | 2\u00a0889\u00a0442 | 2\u00a0403\u00a0598 |
DZD | - | - | - | 4\u00a0577 |
EUR | 86\u00a0393 | 4\u00a0910 | 750\u00a0783 | 3\u00a0910 |
GBP | 32\u00a0760 | 26\u00a0313 | 32\u00a0821 | 27\u00a0076 |
HUF | 863\u00a0797 | 638\u00a0998 | 449\u00a0243 | 603\u00a0176 |
NIS | - | 8 | 9 | - |
JPY | 2\u00a0814\u00a0818 | 4\u00a0091\u00a0538 | 6\u00a0493\u00a0463 | 2\u00a0077\u00a0533 |
MXN | 66\u00a0521 | 65\u00a0240 | 62\u00a0304 | 65\u00a0645 |
NOK | 2\u00a0537\u00a0714 | 2\u00a0093\u00a0232 | 2\u00a0548\u00a0400 | 2\u00a0089\u00a0246 |
PLN | 79\u00a0545 | 47\u00a0729 | 78\u00a0552 | 51\u00a0036 |
RUR | 1\u00a0889\u00a0323 | 1\u00a0344\u00a0703 | 1\u00a0888\u00a0924 | 1\u00a0344\u00a0978 |
SAR | - | - | - | 3\u00a0274 |
SEK | 260\u00a0590 | 193\u00a0612 | 274\u00a0466 | 194\u00a0541 |
TND | - | - | - | 57 |
UAH | - | - | - | - |
USD | 63\u00a0043 | 86\u00a0368 | 83\u00a0515 | 51\u00a0649 |
Foreign exchange risk from operating activities such as salaries and personnel tax are managed by hedging trans-actions that are highly probable to occur within periods out 18 months by entering foreign currency contracts.
The Group employs a layering policy in which the nearest calendar quarter is hedged up to 90% with coverage decreasing in steps to 15% at 18 months out.
Currency exposures related to purchase of filling machines are hedged at a one-to-one basis (100% coverage at the specified date of payment).
Hedge accounting is applied to all currency derivatives, except for cross-currency interest rate swaps which are recognised as financial income or financial expense in profit or loss. Hedge accounting is designated at the date of recognition of the hedged item, however the derivatives are due at the date of expected payment. At designation, the fair value of the hedging derivatives is recycled from Hedge reserve in equity to the hedged item (i.e. filling machine recognised in inventory) and to profit or loss to the same accounting line and at the same time as the hedged item is recognised to profit or loss.
Outstanding derivatives
Nominal amount
EUR 1\u00a0000 | December 31, 2023 | December 31, 2022 | ||
Currency | Ccy | EUR | Ccy | EUR |
CAD | 7\u00a0749 | 5\u00a0292 | - | - |
EUR | (89\u00a0952) | (89\u00a0952) | (72\u00a0633) | (72\u00a0633) |
JPY | 10\u00a0358\u00a0989 | 66\u00a0264 | 9\u00a0461\u00a0714 | 67\u00a0267 |
NOK | 388\u00a0197 | 34\u00a0536 | 255\u00a0426 | 24\u00a0294 |
USD | (27\u00a0740) | (25\u00a0104) | (24\u00a0231) | (22\u00a0718) |
Total nominal value | (8\u00a0965) | (3\u00a0790) | ||
Total fair value | (6\u00a0494) | (534) |
Positive numbers represent purchases.
Interest risk
Elopak's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates. To manage this risk, the Group maintains a portion of its borrowings at fixed rates of interest by entering interest rate swaps. These swaps are designated to hedge underlying debt obligations; however, they are not subject to hedge accounting.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Currency | Notional EUR | Fair value | Notional EUR | Fair value |
Interest | EUR | 150\u00a0000 | 1\u00a0545 | 120\u00a0000 | 7\u00a0063 |
Total | 1\u00a0545 | 7\u00a0063 |
Positive numbers represent purchases.
Commodity price risk
Elopak's operating activities require a continuous supply of aluminium and polyethylene. Based on a 12-month forecast of requirements the Group manages the commodity price risk by hedging the purchase price of the commodity with the use of commodity price swaps. Hedge accounting is applied for all commodity derivatives. As per December 31, 2023 the hedged amount of Polyethylene derivatives is 42% of expected purchase for the next 12 months.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | |||
EUR 1\u00a0000 | Metric Tonnes | Fair value | Metric Tonnes | Fair value |
Polyethylene | 15\u00a0000 | (2\u00a0408) | 13\u00a0000 | (2\u00a0576) |
Aluminum | 3\u00a0960 | 31 | 8\u00a0400 | (743) |
Total | (2\u00a0377) | (3\u00a0318) |
Positive numbers represent derivative assets.
Sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rates (for foreign exchange contracts), commodity prices (for commodity swaps) and interest rates (for interest rate swaps) with all other variables being held constant. The impact on the Group's equity is due to changes in the fair value of deriva-tives designated as cash flow hedges.
Numbers are before tax
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Movement | Effect on profit | Effect on equity | Effect on profit | Effect on equity |
Foreign exchange derivatives | +5% | (5\u00a0022) | (10\u00a0872) | (1\u00a0414) | (8\u00a0222) |
(5%) | (2\u00a0597) | (427) | 213 | 1\u00a0638 | |
Commodity swaps | +5% | - | 1\u00a0604 | - | 1\u00a0461 |
(5%) | - | (1\u00a0604) | - | (1\u00a0461) | |
Interest rate swaps | +1% | 4\u00a0417 | - | 2\u00a0010 | - |
(1%) | (4\u00a0642) | - | (2\u00a0093) | - |
Positive numbers represent derivative assets
2. Liquidity risk
Elopak's objective is to maintain a balance between continuity of funding, and flexibility through the use of bank loans and overdraft facilities.
The maturity profile of the Group's financial assets and liabilities based on contractual undiscounted payments is summarised below. The tables only show balance sheet items classified as financial instruments and do not include other balance sheet items affecting liquidity, such as inventories. Also, off-balance sheet items such as unused credit facilities are not included. The derivative instruments may be settled gross or net with the relevant protocol being reflected in the tables.
Contractual maturities of financial liabilities, including estimated interest payments
Non-derivatives financial liabilities
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 243\u00a0767 | 19\u00a0333 | 224\u00a0433 | - | - | 243\u00a0767 |
Accounts payable | 127\u00a0847 | 127\u00a0847 | - | - | - | 127\u00a0847 |
Other liabilities | 162\u00a0765 | 113\u00a0111 | 16\u00a0851 | 12\u00a0969 | 19\u00a0834 | 162\u00a0765 |
Total | 534\u00a0379 | 260\u00a0291 | 241\u00a0285 | 12\u00a0969 | 19\u00a0834 | 534\u00a0379 |
Derivatives financial instruments
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 7\u00a0398 | 5\u00a0823 | 1\u00a0575 | - | - | 7\u00a0398 |
Interest rate swaps | 2\u00a0105 | - | - | 1\u00a0318 | 787 | 2\u00a0105 |
Commodities | 2\u00a0408 | 2\u00a0408 | - | - | - | 2\u00a0408 |
Total | 11\u00a0911 | 8\u00a0231 | 1\u00a0575 | 1\u00a0318 | 787 | 11\u00a0911 |
Non-derivatives financial liabilities
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 325\u00a0715 | 32 760 | 319 451 | - | - | 325\u00a0715 |
Accounts payable | 124\u00a0038 | 124\u00a0038 | - | - | - | 124\u00a0038 |
Other liabilities | 165\u00a0105 | 78\u00a0108 | 28\u00a0708 | 18\u00a0847 | 39\u00a0442 | 165\u00a0105 |
Total | 614\u00a0859 | 234 906 | 348 159 | 18\u00a0847 | 39\u00a0442 | 614\u00a0859 |
Derivatives financial instruments
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 1\u00a0280 | 951 | 330 | - | - | 1\u00a0280 |
Commodities | 3\u00a0318 | 3\u00a0318 | - | - | - | 3\u00a0318 |
Total | 4\u00a0598 | 4\u00a0269 | 330 | - | - | 4\u00a0598 |
The fair value of all financial assets and liabilities approximates their carrying value. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unadjusted quoted prices for identical assets and liabilities
3. Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Elopak has adopted a policy of only being exposed to credit-worthy counterparties, based upon inde-pendent credit analysis for all counterparties, where available. In the cases where this is not available, Elopak uses other publicly available financial information and its own trading records to assess creditworthiness. Outstanding receivables are monitored regularly.
4. Hedge accounting
Cash flow hedge accounting is applied to hedges of foreign currency risk and commodity price risk. The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair values of cash flow hedging instruments related to hedged transactions that have not yet occurred. Movements in the cash flow hedge reserve are detailed in the table below:
Contracts
2023 | 2022 | |||||
EUR 1\u00a0000 | Opening position | Movement | Closing position | Opening position | Movement | Closing position |
Commodity price hedges | (3\u00a0318) | 942 | (2\u00a0377) | 5\u00a0303 | (8\u00a0621) | (3\u00a0318) |
Currency hedges | (176) | (2\u00a0872) | (3\u00a0048) | 142 | (318) | (176) |
Tax effect | 737 | 413 | 1\u00a0150 | (1\u00a0230) | 1\u00a0967 | 737 |
Total | (2\u00a0758) | (1\u00a0517) | (4\u00a0275) | 4\u00a0215 | (6\u00a0972) | (2\u00a0758) |
The movement in the hedge reserve includes gains/(losses) transferred from the cash flow hedge reserve into the income statement during the period. Foreign exchange forwards and commodities hedge maturities are disclosed in note 25.2. Liquidity Risk, which is representative of when the hedge reserve in equity will be recycled to the state-ment of comprehensive income. These are included in the following line items in the income statement.
Movement in hedge reserve
EUR 1\u00a0000 | 2023 | 2022 |
Cost of goods sold | (1\u00a0673) | (7\u00a0790) |
Other operating expenses | (1\u00a0829) | (569) |
Net financial items | (5\u00a0518) | - |
Total | (9\u00a0020) | (8\u00a0359) |
Movement in hedge reserve due to changes in fair values | (10\u00a0537) | 1\u00a0387 |
Total | (1\u00a0517) | (6\u00a0972) |
Due to Elopak hedging policy, hedges are entered into based on highly probable future transactions, either per transaction or by applying base layers. All hedges have a hedge ratio 1:1 and hedge in-effectiveness related to differences in timing of settlement in 2023 and 2022 was insignificant and is not recognised directly to profit and loss.
Carrying amount of financial asset and liabilities
December 31, 2023 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 3 660 | 925 | - | 4\u00a0585 | - | 4\u00a0585 | - | 4\u00a0585 | |
Finance lease receivable | - | - | 7\u00a0084 | 7\u00a0084 | - | - | - | - | |
Trade receivables | - | - | 110\u00a0243 | 110\u00a0243 | - | - | - | - | |
Other current assets | - | - | 116\u00a0944 | 116\u00a0944 | - | - | - | - | |
Cash and cash equivalents | - | - | 13\u00a0308 | 13\u00a0308 | - | - | - | - | |
Total | 3 660 | 925 | 247\u00a0579 | 252\u00a0164 | - | 4\u00a0585 | - | 4\u00a0585 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 243\u00a0767 | 243\u00a0767 | - | - | - | - | |
Derivatives | 5 451 | ||||||||
6 460 | |||||||||
- | 11\u00a0911 | - | 11\u00a0911 | - | 11\u00a0911 | ||||
Trade payables, and other payables | - | - | 266\u00a0576 | 266\u00a0576 | - | - | - | - | |
Total | 5 451 | 6 460 | 510\u00a0343 | 522\u00a0253 | - | 11\u00a0911 | - | 11\u00a0911 |
Carrying amount of financial asset and liabilities
December 31, 2022 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 7 121 | 689 | - | 7\u00a0810 | - | 7\u00a0810 | - | 7\u00a0810 | |
Finance lease receivable | - | - | 8\u00a0227 | 8\u00a0227 | - | - | - | - | |
Trade receivables | - | - | 102\u00a0197 | 102\u00a0197 | - | - | - | - | |
Other current assets | - | - | 113\u00a0018 | 113\u00a0018 | - | - | - | - | |
Cash and cash equivalents | - | - | 25\u00a0883 | 25\u00a0883 | - | - | - | - | |
Total | 7 121 | 689 | 249\u00a0325 | 257\u00a0135 | - | 7\u00a0810 | - | 7\u00a0810 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 325\u00a0715 | 325\u00a0715 | - | - | - | - | |
Derivatives | 550 | 4 048 | - | 4\u00a0598 | - | 4\u00a0598 | - | 4\u00a0598 | |
Trade payables, and other payables | - | - | 245\u00a0417 | 245\u00a0417 | - | - | - | - | |
Total | 550 | 4 048 | 571\u00a0132 | 575\u00a0731 | - | 4\u00a0598 | - | 4\u00a0598 |
Fair value of financial assets and financial liabilities are measured using different levels of input.
\u2022Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
\u2022Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
\u2022Level 3 inputs are unobservable inputs for the asset or liability.
Note 26 Change in obligations from financial activities
2023 | |||
EUR 1\u00a0000 | Interest-bearing loans and borrowings (Note22) | Lease liabilities (Note14) | Total |
1.1 | 325\u00a0715 | 90\u00a0674 | 416\u00a0390 |
Cash Flows | |||
Proceeds of loans from financial institutions | 1\u00a0087\u00a0304 | - | 1\u00a0087\u00a0304 |
Repayment of loans from financial institutions | (1\u00a0174\u00a0598) | - | (1\u00a0174\u00a0598) |
Interest expense to financial institutions | (11\u00a0303) | - | (11\u00a0303) |
Lease payments | - | (18\u00a0359) | (18\u00a0359) |
Non-cash effects | |||
Interest expense | 11 605 | 6\u00a0566 | 18 171 |
Net additions lease liabilities | - | 22\u00a0639 | 22\u00a0639 |
Other non-cash items | 5\u00a0033 | - | 5 033 |
31.12 | 243 756 | 101\u00a0520 | 345 276 |
Current | 19\u00a0333 | 23 096 | |
Non-current | 224\u00a0433 | 78 424 | |
2022 | |||
EUR 1\u00a0000 | Interest-bearing loans and borrowings (Note22) | Lease liabilities (Note14) | Total |
1.1 | 183\u00a0853 | 80\u00a0604 | 264\u00a0457 |
Cash Flows | |||
Proceeds of loans from financial institutions | 1\u00a0178\u00a0067 | - | 1\u00a0178\u00a0067 |
Repayment of loans from financial institutions | (1\u00a0030\u00a0217) | - | (1\u00a0030\u00a0217) |
Interest expense to financial institutions | (5\u00a0658) | - | (5\u00a0658) |
Lease payments | - | (19\u00a0770) | (19\u00a0770) |
Non-cash effects | |||
Interest expense | 5\u00a0258 | 4\u00a0575 | 9\u00a0833 |
Net additions lease liabilities | - | 25\u00a0266 | 25\u00a0266 |
Other non-cash items | (5\u00a0588) | - | (5\u00a0588) |
31.12 | 325\u00a0715 | 90\u00a0674 | 416\u00a0390 |
Current | 21\u00a0682 | 17 139 | |
Non-current | 304\u00a0033 | 73 536 |
Note 27 Business combination
Accounting policies
A business combination is a transaction or other event in which an acquirer obtains control of one or more busi-nesses. A business consists of inputs and processes applied to those inputs that have the ability to create outputs. Determining whether a particular set of assets and activities is a business should be based on whether the inte-grated set is capable of being conducted and managed as a business by a market participant.
Business combinations are accounted for according to IFRS 3 using the acquisition method, also called purchase price allocation (PPA). The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at fair value at acquisition date according to IFRS 13, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-con-trolling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in other operating expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit or loss.
Goodwill arises in a business combination when the fair value of consideration transferred exceeds the fair value of identifiable assets acquired less the fair value of identifiable liabilities assumed. Goodwill acquired in a business combination is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units and tested subsequently for impairment.
Acquisitions of GLS Elopak
Company | Principal activity | Date of business combination | Percentage owned | Acquiring entity |
GLS Elopak | Trading and manufacturing | May 13, 2022 | 50% | Elopak BV (49.5%)Elopak UK Limited (0.5%) |
Elopak and GLS signed on April 28, 2022 an agreement in which the two companies will have 50% ownership of a newly formed company, GLS Elopak. The completion date (closing) took place May 13, 2022. The agreement provides Elopak with exposure to variable returns and power to affect the returns from GLS Elopak, which means that Elopak will have control of GLS Elopak in accordance with IFRS 10 and will consolidate the company as a subsidiary in Elopak\u2019s financial statements. GLS Elopak will leverage the respective expertise, assets and networks of Elopak and GLS to capitalize on the significant consumer demand in India. The company is being established to manufacture and process high-quality fresh and aseptic packaging solutions, which are designed to ensure that liquid food is safe and accessible to consumers across the globe. The company will cater to both fresh and aseptic segments with applications such as dairy, plant-based drinks, juice, water and liquor.
The transaction is recognized as a business combination in accordance with IFRS 3 and the acquisition date is May 13, 2022.
The acquisition-date fair value of the total consideration transferred was EUR 12\u00a0793 thousand in cash. Transaction costs of EUR 340 thousand were expensed and are included in other operating costs. If the transactions had occurred January 1, 2022, GLS Elopak would have contributed EUR 73 thousand revenue and a loss of EUR 292 thousand before tax. From acquisition date to reporting date GLS Elopak has contributed EUR 5\u00a0217 thousand revenue and a loss of EUR 713 thousand before tax.
Fair values of the identifiable assets in GLS Elopak at acquisition date
EUR 1\u00a0000 | 2022 |
ASSETS | |
Non-current assets | |
Development cost and other intangible assets | 29 |
Deferred tax assets | 1 |
Property, plant and equipment | 10\u00a0462 |
Total non-current assets | 10\u00a0492 |
Current assets | |
Inventory | 550 |
Other current assets | 797 |
Cash and cash equivalents | 8\u00a0419 |
Total current assets | 9\u00a0766 |
Total assets | 20\u00a0258 |
Non-current liabilities | |
Deferred tax liability | 624 |
Total non-current liabilities | 624 |
Current liabilities | |
Current liabilities to financial institutions | |
Trade and other payables | 1\u00a0106 |
Other current liablities | 124 |
Total current liabilities | 1\u00a0230 |
Total liabilities | 1\u00a0854 |
Total identifiable net assets at fair value | 18\u00a0404 |
Non-controlling interest (at share of identifiable net assets) | 9\u00a0202 |
Purchase consideration | 12\u00a0793 |
Goodwill arising from acquisition | 3\u00a0591 |
Purchase consideration | |
Cash consideration paid | 12\u00a0793 |
Total consideration | 12\u00a0793 |
Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of expected synergies arising from the acquisition and assembled workforce, which is not separately recognized.
None of the goodwill recognized is deductible for income tax purposes.
Analysis of cash flows on acquisition
EUR 1\u00a0000 | 2022 |
Net cash acquired with the subsidiary | 8\u00a0419 |
Cash paid | 12\u00a0793 |
Net cash flow from acquisition (included in investing activites) | (4\u00a0374) |
Acquisitions of Naturepak
Company | Principal activity | Date of business combination | Percentage owned | Acquiring entity |
Naturepak Beverage Packaging Co Ltd | Trading and manufacturing | March 29, 2022 | 100% | Elopak BV (99%)Elopak UK Limited (1%) |
Elopak Arabia Holding Company acquired 100% of the voting shares of Naturepak Beverage Packaging Co Ltd on March 29, 2022. Naturepak Beverage is the leading provider of fresh liquid carton and packaging systems in the MENA region with local production facilities in Morocco and Saudi Arabia, which will be integrated into Elopak\u2019s global production network. Present in 16 countries, Naturepak Beverage has an annual production capacity of 2.7 billion cartons across various product sizes and its customers are global blue chip FMCG players and strong regional champions. The acquisition will reinforce Elopak\u2019s position in the region and is an important milestone in management\u2019s ambitions to target 2-3% organic revenue growth, deliver inorganic opportunities and grow its global footprint by entering new geographies.
The transaction is recognized as a business combination in accordance with IFRS 3 and the acquisition date is March 29, 2022.
The acquisition-date fair value of the total consideration transferred was EUR 85\u00a0383 thousand in cash. Transaction costs of EUR 2\u00a0110 thousand were expensed and are included in other operating costs. If the transactions had occurred January 1, 2022, Naturepak would have contributed EUR 7\u00a0765 revenue and EUR 917 profit before tax. From acquisition date to reporting date Naturepak has contributed EUR 33\u00a0422 thousand revenue and a loss of EUR 2 527 thousand before tax.
Fair values of the identifiable assets in Naturepak Beverage Packaging Co Ltd at acquisition date
EUR 1\u00a0000 | 2022 |
ASSETS | |
Non-current assets | |
Development cost and other intangible assets | 26\u00a0794 |
Property, plant and equipment | 11\u00a0162 |
Right-of-use assets | 50 |
Deferred tax asset | 1\u00a0459 |
Other non-current assets | 446 |
Total non-current assets | 39\u00a0910 |
Current assets | |
Inventory | 1\u00a0480 |
Trade receivables | 4\u00a0881 |
Other current assets | 2\u00a0644 |
Cash and cash equivalents | 1\u00a0495 |
Total current assets | 10\u00a0500 |
Total assets | 50\u00a0410 |
Non-current liabilities | |
Deferred tax liability | 7\u00a0789 |
Non-current lease liabilities | 32 |
Other non-current liabilities | 2\u00a0371 |
Total non-current liabilities | 10\u00a0192 |
Current liabilities | |
Current liabilities to financial institutions | 713 |
Trade and other payables | 3\u00a0921 |
Current lease liabilities | 47 |
Other current liablities | 3\u00a0652 |
EUR 1\u00a0000 | 2022 |
Total current liabilities | 8\u00a0333 |
Total liabilities | 18\u00a0525 |
Total identifiable net assets at fair value | 31\u00a0885 |
Purchase consideration | 85\u00a0383 |
Goodwill arising from acquisition | 53\u00a0498 |
Purchase consideration | |
Cash consideration paid | 85\u00a0383 |
Total consideration | 85\u00a0383 |
Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of expected synergies arising from the acquisition and assembled workforce, which is not separately recognized.
None of the goodwill recognized is deductible for income tax purposes.
Analysis of cash flows on acquisition
EUR 1\u00a0000 | 2022 |
Net cash acquired with the subsidiary | 1\u00a0495 |
Cash paid | 85\u00a0383 |
Net cash flow from acquisition (included in investing activites) | (83\u00a0888) |
Note 28 Shares in subsidiaries and joint ventures
The following companies are consolidated as subsidiaries in Elopak Group
Company | Percentage owned | Year of acquisition | Country | Principal activity |
Elopak AB | 100% | 1961 | Sweden | Trading |
Elopak B.V. | 100% | 1968 | Netherlands | Manufacturing |
Elopak GmbH | 100% | 1968 | Germany | Trading and manufacturing |
Elopak SpA | 100% | 1981 | Italy | Trading |
Elopak Oy | 100% | 1982 | Finland | Trading |
Elopak Systems AG | 100% | 1984 | Switzerland | Trading |
Elopak Denmark A/S | 100% | 1988 | Denmark | Trading and manufacturing |
Elopak GesmbH | 100% | 1989 | Austria | Trading |
PrJSC Elopak Fastiv | 100% | 1994 | Ukraine | Trading and manufacturing |
Elopak S.A. | 100% | 1994 | Poland | Trading and service |
Elopak Israel AS | 100% | 1998 | Norway | Holding |
Elopak Canada Inc. | 100% | 2000 | Canada | Trading and manufacturing |
Elofill GmbH | 100% | 2000 | Germany | Holding |
Elopak s.r.o. | 100% | 2001 | Czech Republic | Trading |
Elopak UK Ltd | 100% | 2004 | United Kingdom | Trading |
Elopak BS d.o.o | 100% | 2017 | Serbia | Service |
Elopak Kft. | 100% | 2006 | Hungary | Trading |
Elopak EOOD | 100% | 2009 | Bulgaria | Trading |
Elopak Tunisie SARL | 100% | 2017 | Tunisia | Trading |
Elopak Egypt LLC | 100% | 2017 | Egypt | Trading |
Elopak Algerie SARL | 49% | 2018 | Algeria | Trading |
Elopak Arabia Holding Company LLC | 100% | 2022 | Saudi Arabia | Holding |
Elopak Packaging Company LLC | 100% | 2022 | Saudi Arabia | Trading and manufacturing |
Elopak Morocco SAS | 100% | 2022 | Morocco | Trading and manufacturing |
GLS Elopak | 50% | 2022 | India | Trading and manufacturing |
The percentage owned represents the voting stake.
The following joint ventures are accounted for in accordance with the equity method
Company | Percentage owned | Year of acquisition | Country | Principal activity |
Lala Elopak S.A. de C.V. | 49% | 1998 | Mexico | Trading and manufacturing |
Impresora Del Yaque | 51% | 2007 | Dominican Republic | Trading and manufacturing |
Elopak Nampak Africa Ltd | 50% | 2020 | Kenya | Trading |
The percentage owned represents the voting stake.
Note 29 Related parties
Transactions with key management
Related party transactions and balances
Transaction values for the year ended | Balance outstanding as of | |||
EUR 1\u00a0000 | December 31 2023 | December 31 2022 | December 31 2023 | December 31 2022 |
Joint Ventures | ||||
Sales of goods and services | 7 606 | 4 877 | 5 033 | 1 200 |
Purchase of goods and services | 36 865 | 35 781 | 3 075 | 2 394 |
Dividends received | 2 018 | - | - | - |
Associates | ||||
Sales of goods and services | 82 | 69 | - | - |
Purchase of goods and services | 1 777 | 1 198 | 23 | 26 |
Loan and related interest | - | - | 818 | 836 |
All amounts are excl. VAT
Board of Directors: annual compensation and number of shares owned
Related party transactions and balances
Compensation earned | Number of shares | |||
EUR 1\u00a0000, except number of shares | December 31 2023 | December 31 2022 | December 31 2023 | December 31 2022 |
Dag Mejdell, Chairperson | 45 | - | 56 000 | - |
Trond Solberg | 50 | - | - | - |
Sanna Suvanto-Harsaae | 43 | 43 | 14 285 | 14 285 |
Sid Johari | 40 | 40 | 17 857 | 17 857 |
Anna Belfrage | 48 | 48 | - | - |
Anette Bauer Ellingsen | 13 | 15 | 1 071 | 1 071 |
H\u00e5vard Grande Urhamar | 5 | - | - | - |
Marianne Groven | - | 1 | - | - |
Cornelia Ann O Neill Kormeseth | - | - | - | - |
Erland Fretheim | - | - | 370 | 370 |
Magne Johan Hamarstr\u00f8m | - | - | - | - |
Jo Olav Lunder\u200c1 | 21 | 65 | - | 107 142 |
Erlend Sveva\u200c2 | 8 | 15 | 1 071 | 1 071 |
1Left his position as Chairperson May 11, 2023\t
2Left his position as Board member August 30, 2023
Other related party transactions
Loans to employees were EUR 19 thousand in 2023 and EUR 24 thousand in 2022. No guarantees have been provided. None of the Board Members or the CEO have executive loans or guarantees in the company.
Note 30 Fees to external auditors
PWC was elected as the principal auditor since 2019, while some Group companies are audited by other audit firms.
Expensed fees
Year to date ended December 31, 2023 | |||||
EUR 1\u00a0000 | Audit fee | Other assurance services | Tax services | Other non-audit services | Total |
PWC | (878) | (34) | (2) | (96) | (1\u00a0010) |
Others | (230) | (3) | (113) | (89) | (435) |
Total | (1\u00a0108) | (37) | (115) | (185) | (1\u00a0445) |
Year to date ended December 31, 2022 | |||||
EUR 1\u00a0000 | Audit fee | Other assurance services | Tax services | Other non-audit services | Total |
PWC | (840) | (33) | (7) | (42) | (922) |
Others | (117) | (3) | (118) | - | (238) |
Total | (957) | (36) | (125) | (42) | (1\u00a0159) |
All amounts are excl. VAT
Note 31 Subsequent events
The Board will propose to the Annual General Meeting a dividend of NOK 1.46 per share for 2023.
Note 32 Financial climate impact
Sustainability Framework
Elopak manages the risks related to sustainability. Climate risks, such as the rapidly changing regulatory environ-ment and physical risks are integrated parts of the sustainability framework.
We focus our efforts on monitoring global developments concerning sustainability and/or packaging, such as the EU Taxonomy framework, the Corporate Sustainability due diligence directive, and the EU Packaging & Packaging Waste Directive. See Recycling and recyclability, Appendix: EU Taxonomy, and Appendix: Double materiality assess-ment for more details. The EU Directive 2019/904, also known as Single Use Plastic Directive requires that all single use plastic closures that encompass the carton closures must remain attached during its use, which will come into effect as of July 3, 2024.
At present, Elopak is subject to Plastic Product Tax in the UK from 2022 and Spain from 2023. The implementation in Italy is delayed and will not take effect until mid-2024. We will assess developments of Plastic Product Tax in other countries as relevant. As EU Member States have competence on tax, they may change scope, define payer, or decide if the levy will be paid from national budget, meaning no imposition of plastic tax. It has been assessed that the Plastic Product Tax will have no impact on the outcome of impairment testing.
On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force in the EU. Elopak has a reporting requirement for the year commencing on January 1, 2024 and is developing internal polices and proce-dures to meet the CSRD requirements. There is no current impact on the financial statements.
Since the first draft of the EU Packaging and Packaging Waste Regulation (PPWR) was issued by the EU Commission in November 2022, Elopak has been closely following its developments. Though both the EU Parliament and EU Council issued negotiating positions in 2023, the contents of the regulation remain under discussion until its text is published. While Elopak is continuing to follow the PPWR and its impacts to packaging value chains, there is no impact for the financial statements.
Elopak sustainability program
Elopak\u2019s Group strategy is managed through an annual business planning process where the company defines some key priorities. Each business unit defines its Must-Win-Battles, which are granulated down to individual targets
for employees. This structure entails the entire organization and strategic approach, including the sustainability program. Read more about Elopak\u2019s Group strategy in our annual report.
The sustainability program is an embedded part of the overall group strategy, and responsibilities for various sections are placed throughout all business units. The Group Leadership Team (GLT) is the overall steering committee of the program and reviews the performance on a quarterly basis. The Board of Directors is overall responsible for strategy approval and implementation.
Our sustainability program consists of targets divided into our material topics. The targets are linked to specific strategic initiatives owned by relevant business areas. Specific KPIs are defined to measure and report progress and continuously adapted to reflect our ambitions, some of which refer to the GRI framework or CSRD; others are more specific to our industry and hence self-defined. See Our performance for more details.
Climate Risk
A full climate risk assessment of material adverse physical impacts to the business from climate change was completed in 2022 in accordance with TCFD (Task Force on Climate-related Financial Disclosures), a framework organization to publicly disclose climate-related risks and opportunities.
The climate risk is categorized into Physical impacts such as extreme weather, floods or droughts and sea level rise and Transition impacts from potential changes in climate policy and market outlooks. In order to comprehensively map and analyze risks and opportunities associated with climate change, information and insights are obtained on the following three parameters: Impact, likelihood and time horizon. A combination of these parameters provides an overall assessment of which risk and opportunities are especially relevant for Elopak.
Financial climate impacts
Based on the sustainability framework, the defined sustainability program targets and the result of the climate risk assessment, Elopak has considered the impacts of climate change in preparing the 2023 consolidated annual financial statements. The table below summarizes the climate risk financial impact assessments.
Climate risk | Annual Impact(EUR million) | Time horizon | Category |
Regulatory risk: Competition from other low-carbon packaging alternatives | More than 80 | short | revenue |
Regulatory risk: Changing landscape for packaging regulations | More than 80 | short | revenue |
Opportunity: Offering low-carbon and circular alternatives | More than 80 | short | revenue |
Opportunity: Rising costs related to CO2 | Less than 20 | short | revenue |
Regulatory risk: Constrained access and price fluctuations for low-emission materials | Between 5 and 20 | short | cost |
Physical risk: Extreme storm events disrupting direct operations for up to one week | Less than 5 | medium | cost |
Regulatory risk: Technological developments for carton recycling require investment and/or product development | More than 20 | medium | cost |
Physical risk: Chronic droughts or water shortages in areas of direct operations or upstream value chain | Between 5 and 20 | long | cost |
Physical risk: Wildfires impacting raw material volumes in the upstream value chain | Between 5 and 20 | long | cost |
Four risks/opportunities are considered to have a potential of increased revenues at a short time horizon while five risks are considered to have a risk of costs at short, medium or long time horizons. Long time horizon varies from up to 2030 for regulatory risks and until 2100 for physical risks.
Impact on capital expenditure commitments:
\u2022Targets related to reduced emissions are mainly met by replacing old production line components with new, more energy-effective components. Most of the replaced parts are already fully depreciated.
\u2022Due to the Single Use Plastic Directive the existing Caps lease contracts were reassessed in 2022 with a reduced useful life in preparation for the changing legislation. Elopak has signed a contract for Tethered Cap lines and is expecting to expand the offering of tethered cap solutions to customers during 2023 and 2024. Additionally, Elopak has assessed that the existing lease contracts for separable cap lines should be fully depreciated before the tethering requirement will be in place and has therefore reassessed the respective leases, see Note 14for further information.
Recognition and measurement of impairments:
Impairments are mainly identified and recognized by determining the recoverable amount based on value in use, which means that the item is measured as a present value of discounted future cash-flows. These cash flows are based on expected revenues, result and capital expenditures in the CGU of which the item is operating within. The climate risk financial impact assessment concludes that the potential of revenues is by far higher than the risk of costs and that the revenues is likely to occur earlier than the costs. In the case that Elopak is faced with increased cost related to the climate risks, this will over time be passed on to the customers, similar to what other packaging companies are expected to do when faced with the same climate challenges. Based on this, we consider the risk of impairment related to climate risk to be low.
Recognition and measurement of provisions and disclosures surrounding contingent liabilities:
Elopak has not identified future costs or losses that meets the definition of provision or contingent liabilities under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Inventory is measured at cost and written down to the extent that expected sales price less cost of sales is lower than cost. Inventory items related to sale of cartons and closures have a high turnover, hence it is not expected to be negatively impacted by future climate risk costs. Filling machines and spare parts for filling machines have a lower turnover in inventory, however climate risk assessments have not concluded a specific risk related to these machines.
Besides the specific assessments mentioned above, no financial climate impacts have been identified as material to the 2023 consolidated Annual Financial Statements or the alternative performance measures (APMs).
Note 01 Company information and basis of preparation
Elopak ASA is a public limited company incorporated in NorwayElopak is a global supplier of liquid carton packaging and filling equipment, catering to both the fresh and aseptic segments. The principal activities of the company and its subsidiaries are described in Note 3Note 3. The address of the registered office and principal place of business is Industriveien 30, 3430 Spikkestad, Norway. Elopak ASA is listed on the Oslo Stock Exchange (Oslo Bors). The Board of Directors and the CEO authorized these consolidated financial statements of Elopak ASA and its subsidiaries for the year ended December 31, 2023, for issue on April 10, 2024.. The address of the registered office and principal place of business is Industriveien 30, 3430 Spikkestad, Norway. Elopak ASA is listed on the Oslo Stock Exchange (Oslo Bors). The Board of Directors and the CEO authorized these consolidated financial statements of Elopak ASA and its subsidiaries for the year ended December 31, 2023, for issue on April 10, 2024.
Elopak's material accounting policies are included in the explanatory notes to the consolidated financial statements.
Basis of preparation
The consolidated financial statements of Elopak ASA and its subsidiaries have been prepared in accordance with IFRS\u00aeAccounting Standards as adopted by the European Union (EU). The accounting policies adopted have been applied consistently to all of the years presented. Elopak also provides disclosures in accordance with requirements in the Norwegian Accounting Act (Regnskapsloven). New and amended standards adopted by Elopak do not have a material impact on the consolidated financial statements. The Elopak Group consists of Elopak ASA and its subsidiaries as set out in Note28.
The consolidated financial statements incorporate the financial state-ments of the companies controlled by Elopak ASA. The functional currency of Elopak ASA is the Euro (EUR). All numbers are presented in Euro 1\u00a0000 unless otherwise is clearly stated.
Material accounting policies
Material accounting policies and information about management judg-ments, estimates, and assumptions are provided in the respective notes throughout the consolidated financial statements. Accounting policies that relate to the financial statements as a whole or are relevant for several notes are included in this \u201cMaterial accounting policies\u201d section.
Foreign currencies
The individual financial statements of each group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Euro, which is the functional currency of the parent company and the presentation currency for the consolidated financial statements.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of Elopak\u2019s foreign operations are expressed in Euro using exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the rele-vant periods.
Impairment of non-financial assets excluding goodwill
At each reporting date, Elopak reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, Elopak estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is esti-mated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount. The increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
Financial instruments at amortized cost
Subsequent to initial recognition, non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impairment losses. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or liability or, where appropriate, a shorter period.
Financial instruments at fair value
The fair value of investments that are actively traded in organized financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm\u2019s length market transactions, reference to the current market value of another instrument which is substantially the same, discounted cash flow analysis or other valuation models.
Trade and other payables
Trade and other payables that contain significant financing components are measured at amortized cost, otherwise, they are measured at nominal value.
Adoption of new and revised International Financial Reporting Standards
A number of new standards are effective for annual periods beginning after January 1, 2023, and earlier application is permitted. However, Elopak has not early adopted the following new or amended accounting standards.
Amendments to IFRS that are mandatorily effective for an accounting period that begins on or after January 1, 2023 have been adopted. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
\u2022IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
The following new and amended standards issued but not yet effective are not expected to have a material impact on Elopak\u2019s consolidated financial statement:
\u2022Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
\u2022Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
\u2022Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
\u2022Lack of Exchangeability (Amendments to IAS 21)
Note 01 Company information and basis of preparation
Elopak ASA is a public limited company incorporated in NorwayElopak is a global supplier of liquid carton packaging and filling equipment, catering to both the fresh and aseptic segments. The principal activities of the company and its subsidiaries are described in Note 3Note 3. The address of the registered office and principal place of business is Industriveien 30, 3430 Spikkestad, Norway. Elopak ASA is listed on the Oslo Stock Exchange (Oslo Bors). The Board of Directors and the CEO authorized these consolidated financial statements of Elopak ASA and its subsidiaries for the year ended December 31, 2023, for issue on April 10, 2024.. The address of the registered office and principal place of business is Industriveien 30, 3430 Spikkestad, Norway. Elopak ASA is listed on the Oslo Stock Exchange (Oslo Bors). The Board of Directors and the CEO authorized these consolidated financial statements of Elopak ASA and its subsidiaries for the year ended December 31, 2023, for issue on April 10, 2024.
Elopak's material accounting policies are included in the explanatory notes to the consolidated financial statements.
Basis of preparation
The consolidated financial statements of Elopak ASA and its subsidiaries have been prepared in accordance with IFRS\u00aeAccounting Standards as adopted by the European Union (EU). The accounting policies adopted have been applied consistently to all of the years presented. Elopak also provides disclosures in accordance with requirements in the Norwegian Accounting Act (Regnskapsloven). New and amended standards adopted by Elopak do not have a material impact on the consolidated financial statements. The Elopak Group consists of Elopak ASA and its subsidiaries as set out in Note28.
The consolidated financial statements incorporate the financial state-ments of the companies controlled by Elopak ASA. The functional currency of Elopak ASA is the Euro (EUR). All numbers are presented in Euro 1\u00a0000 unless otherwise is clearly stated.
Material accounting policies
Material accounting policies and information about management judg-ments, estimates, and assumptions are provided in the respective notes throughout the consolidated financial statements. Accounting policies that relate to the financial statements as a whole or are relevant for several notes are included in this \u201cMaterial accounting policies\u201d section.
Foreign currencies
The individual financial statements of each group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Euro, which is the functional currency of the parent company and the presentation currency for the consolidated financial statements.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of Elopak\u2019s foreign operations are expressed in Euro using exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the rele-vant periods.
Impairment of non-financial assets excluding goodwill
At each reporting date, Elopak reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, Elopak estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is esti-mated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount. The increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
Financial instruments at amortized cost
Subsequent to initial recognition, non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impairment losses. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or liability or, where appropriate, a shorter period.
Financial instruments at fair value
The fair value of investments that are actively traded in organized financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm\u2019s length market transactions, reference to the current market value of another instrument which is substantially the same, discounted cash flow analysis or other valuation models.
Trade and other payables
Trade and other payables that contain significant financing components are measured at amortized cost, otherwise, they are measured at nominal value.
Adoption of new and revised International Financial Reporting Standards
A number of new standards are effective for annual periods beginning after January 1, 2023, and earlier application is permitted. However, Elopak has not early adopted the following new or amended accounting standards.
Amendments to IFRS that are mandatorily effective for an accounting period that begins on or after January 1, 2023 have been adopted. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
\u2022IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
The following new and amended standards issued but not yet effective are not expected to have a material impact on Elopak\u2019s consolidated financial statement:
\u2022Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
\u2022Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
\u2022Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
\u2022Lack of Exchangeability (Amendments to IAS 21)
Foreign currencies
The individual financial statements of each group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Euro, which is the functional currency of the parent company and the presentation currency for the consolidated financial statements.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of Elopak\u2019s foreign operations are expressed in Euro using exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the rele-vant periods.
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At each reporting date, Elopak reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, Elopak estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is esti-mated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount. The increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
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Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
Financial instruments at amortized cost
Subsequent to initial recognition, non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impairment losses. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or liability or, where appropriate, a shorter period.
Financial instruments at fair value
The fair value of investments that are actively traded in organized financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm\u2019s length market transactions, reference to the current market value of another instrument which is substantially the same, discounted cash flow analysis or other valuation models.
Trade and other payables
Trade and other payables that contain significant financing components are measured at amortized cost, otherwise, they are measured at nominal value.
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A number of new standards are effective for annual periods beginning after January 1, 2023, and earlier application is permitted. However, Elopak has not early adopted the following new or amended accounting standards.
Amendments to IFRS that are mandatorily effective for an accounting period that begins on or after January 1, 2023 have been adopted. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
\u2022IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
The following new and amended standards issued but not yet effective are not expected to have a material impact on Elopak\u2019s consolidated financial statement:
\u2022Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
\u2022Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
\u2022Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
\u2022Lack of Exchangeability (Amendments to IAS 21)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFirstTimeAdoptionExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29380": { "value": "Adoption of new and revised International Financial Reporting Standards
A number of new standards are effective for annual periods beginning after January 1, 2023, and earlier application is permitted. However, Elopak has not early adopted the following new or amended accounting standards.
Amendments to IFRS that are mandatorily effective for an accounting period that begins on or after January 1, 2023 have been adopted. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
\u2022IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
The following new and amended standards issued but not yet effective are not expected to have a material impact on Elopak\u2019s consolidated financial statement:
\u2022Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
\u2022Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
\u2022Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
\u2022Lack of Exchangeability (Amendments to IAS 21)
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29621": { "value": "Note 02 Critical accounting judgments and key sources of estimation uncertainty
In the application of Elopak\u2019s accounting policies, which are described in Note 1, management is required to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Business combinations
In a business combination, the assets acquired and liabilities assumed are valued at fair value at the time of acquisition. The various assets and liabilities are valued on the basis of different models, requiring estimates and assumptions to be made. Goodwill is the residual value in this allo-cation. Errors in estimates and assumptions can lead to an error in the split of the value between the various assets and liabilities incl. goodwill, but the sum of the total excess values will always be consistent with the purchase price paid.
The useful lives of the intangible assets acquired in a business combi-nation are assessed as either finite or indefinite and may in some cases involve considerable judgements. Intangible assets acquired with finite useful lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset
may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates.
According to IFRS 3, goodwill is to be allocated at the acquisition date, to each of the acquirer's CGUs, or groups of CGUs, which are expected to benefit from the business combination. This can include existing CGUs of the acquirer irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The identification of CGUs may require significant judgement by management.
In 2022 Elopak acquired 100% of the voting shares of Naturepak Beverage Packaging Co Ltd and consolidates the company as a subsidiary in Elopak\u2019s consolidated financial statements. In 2022 Elopak acquired 50% of the shares in GLS Elopak and consolidates the company as a subsidiary in Elopak\u2019s consolidated financial statements. The shareholder agreement provides Elopak with exposure to variable returns and power to affect the returns from GLS Elopak, which means that Elopak has control of GLS Elopak in accordance with IFRS 10. Details are presented in Note27.
War in Ukraine
In March 2022, Elopak suspended all activities in Russia and restarted operations in Ukraine after a temporary close-down. Impairment in Ukraine is presented in Note 17and discontinued operations in Russia is\u00a0presented in Note10.
Deferred tax assets
Management has exercised judgment in assessing the recognition of tax loss carryforward for Elopak\u2019s various entities and the resulting deferred tax asset. The judgment is based upon the entities\u2019 assessed ability to generate future cash flows that will enable the entities to do so. The assessments imply a degree of uncertainty relating to such future events. Tax expenses and deferred tax assets are presented in Note 9.
Tax disputes
In tax disputes, Elopak accounts for tax costs according to decisions made by local tax authorities or according to subsequent tax rulings in the actual case or similar cases. Where transfer pricing adjustments have been made, mutual agreement procedures (MAP) between the affected countries are normally available. A successful MAP procedure, as intended in the double tax treaties between countries, would result in a corresponding tax adjustment in a Group company, thus removing the tax cost for Elopak. Where a MAP process is available, Elopak recognizes tax costs according to the probability of the outcome of the MAP process. If tax authorities within the EU do not agree, taxpayers have the right to demand arbitration. Details regarding ongoing tax disputes are described in Note 9.
Business combinations
In a business combination, the assets acquired and liabilities assumed are valued at fair value at the time of acquisition. The various assets and liabilities are valued on the basis of different models, requiring estimates and assumptions to be made. Goodwill is the residual value in this allo-cation. Errors in estimates and assumptions can lead to an error in the split of the value between the various assets and liabilities incl. goodwill, but the sum of the total excess values will always be consistent with the purchase price paid.
The useful lives of the intangible assets acquired in a business combi-nation are assessed as either finite or indefinite and may in some cases involve considerable judgements. Intangible assets acquired with finite useful lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset
may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates.
According to IFRS 3, goodwill is to be allocated at the acquisition date, to each of the acquirer's CGUs, or groups of CGUs, which are expected to benefit from the business combination. This can include existing CGUs of the acquirer irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The identification of CGUs may require significant judgement by management.
In 2022 Elopak acquired 100% of the voting shares of Naturepak Beverage Packaging Co Ltd and consolidates the company as a subsidiary in Elopak\u2019s consolidated financial statements. In 2022 Elopak acquired 50% of the shares in GLS Elopak and consolidates the company as a subsidiary in Elopak\u2019s consolidated financial statements. The shareholder agreement provides Elopak with exposure to variable returns and power to affect the returns from GLS Elopak, which means that Elopak has control of GLS Elopak in accordance with IFRS 10. Details are presented in Note27.
War in Ukraine
In March 2022, Elopak suspended all activities in Russia and restarted operations in Ukraine after a temporary close-down. Impairment in Ukraine is presented in Note 17and discontinued operations in Russia is\u00a0presented in Note10.
Deferred tax assets
Management has exercised judgment in assessing the recognition of tax loss carryforward for Elopak\u2019s various entities and the resulting deferred tax asset. The judgment is based upon the entities\u2019 assessed ability to generate future cash flows that will enable the entities to do so. The assessments imply a degree of uncertainty relating to such future events. Tax expenses and deferred tax assets are presented in Note 9.
Tax disputes
In tax disputes, Elopak accounts for tax costs according to decisions made by local tax authorities or according to subsequent tax rulings in the actual case or similar cases. Where transfer pricing adjustments have been made, mutual agreement procedures (MAP) between the affected countries are normally available. A successful MAP procedure, as intended in the double tax treaties between countries, would result in a corresponding tax adjustment in a Group company, thus removing the tax cost for Elopak. Where a MAP process is available, Elopak recognizes tax costs according to the probability of the outcome of the MAP process. If tax authorities within the EU do not agree, taxpayers have the right to demand arbitration. Details regarding ongoing tax disputes are described in Note 9.
Accounting policies
A business combination is a transaction or other event in which an acquirer obtains control of one or more busi-nesses. A business consists of inputs and processes applied to those inputs that have the ability to create outputs. Determining whether a particular set of assets and activities is a business should be based on whether the inte-grated set is capable of being conducted and managed as a business by a market participant.
Business combinations are accounted for according to IFRS 3 using the acquisition method, also called purchase price allocation (PPA). The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at fair value at acquisition date according to IFRS 13, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-con-trolling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in other operating expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit or loss.
Goodwill arises in a business combination when the fair value of consideration transferred exceeds the fair value of identifiable assets acquired less the fair value of identifiable liabilities assumed. Goodwill acquired in a business combination is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units and tested subsequently for impairment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s6_notes__12__23-1": { "value": "Deferred tax assets
Management has exercised judgment in assessing the recognition of tax loss carryforward for Elopak\u2019s various entities and the resulting deferred tax asset. The judgment is based upon the entities\u2019 assessed ability to generate future cash flows that will enable the entities to do so. The assessments imply a degree of uncertainty relating to such future events. Tax expenses and deferred tax assets are presented in Note 9.
Note 09 Income tax
Income tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Current income tax | ||
Current income tax charge | 20\u00a0405 | 13\u00a0214 |
Adjustments in respect of current income tax of previous year | (2\u00a0934) | (2\u00a0583) |
Withholding tax | 1\u00a0107 | 2\u00a0337 |
Total current income tax | 18\u00a0578 | 12\u00a0968 |
Deferred tax | ||
Deferred tax cost | (2\u00a0519) | (1\u00a0243) |
Effect of changed tax rate and corrections previous years | (545) | 463 |
Total deferred tax | (3\u00a0064) | (780) |
Income tax expense reported in the statement of comprehensive income | 15\u00a0514 | 12\u00a0188 |
Payable tax
EUR 1\u00a0000 | 2023 | 2022 |
Payable tax opening balance | (3\u00a0185) | (2\u00a0616) |
Current income tax | 18\u00a0578 | 12\u00a0968 |
Translation | (278) | 102 |
Net tax paid | (14\u00a0356) | (13\u00a0638) |
Payable tax closing balance | 759 | (3 184) |
Reconciliation of tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Profit before income tax | 84\u00a0879 | 46\u00a0407 |
Expected tax at statutory tax rate\u200c1 | 20\u00a0371 | 11\u00a0138 |
Adjustments in respect of different local tax rates | 2\u00a0151 | 1\u00a0300 |
Non-taxable income/expense | - | - |
Share of results of joint ventures | (1\u00a0645) | (1\u00a0051) |
Adjustments in respect of income tax of previous years | (2\u00a0626) | (2\u00a0336) |
Withholding tax, non-refundable | 1\u00a0107 | 2\u00a0337 |
Adjustments in respect of changes to tax rates and regulations | (853) | 564 |
Currency translation effects | (4\u00a0630) | (2\u00a0233) |
Other differences | 1\u00a0640 | 2\u00a0468 |
Income tax expense | 15\u00a0514 | 12\u00a0188 |
Effective income tax rate | 18.3% | 26.3% |
1The expected tax at statutory tax rate of 24% (24% in 2022) is based on an estimate of where the Group taxes its profits and the corresponding applicable tax rates
Change in deferred tax on items in Other Comprehensive Income/Equity
EUR 1\u00a0000 | 2023 | 2022 |
Remeasurement gain/loss on actuarial gains and losses | 211 | 266 |
Cash flow hedges | (406) | (1\u00a0957) |
Equity transactions | (409) | (330) |
Change in deferred tax on items in Other Comprehensive Income/Equity | (603) | (2\u00a0020) |
Deferred tax
EUR 1\u00a0000 | 2023 | 2022 |
Revaluation of inventories | 16\u00a0795 | 13\u00a0564 |
Payables/receivables | 23\u00a0538 | 13\u00a0977 |
Non-current assets | (14\u00a0729) | (10\u00a0131) |
Fixed assets depreciations | (7\u00a0927) | (8\u00a0592) |
Liquid assets | (17\u00a0971) | (14\u00a0302) |
Losses available for offsetting against future taxable income | 9\u00a0427 | 9\u00a0101 |
Other differences | (292) | 1\u00a0557 |
Total deferred tax | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets | 22\u00a0883 | 22\u00a0414 |
Deferred tax liabilities | 14\u00a0041 | 17\u00a0240 |
Net deferred assets/liabilities | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets are evaluated at each balance sheet date and recognized to the extent that it is probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability shall be settled or the asset to be realized, based on tax rates and laws that have been enacted or substan-tively enacted at the balance sheet date.
Specification of tax losses carried forward \u2013 country and year of expire
EUR 1\u00a0000 | After 2025 | Indefinite | Total |
Canada | - | 805 | 805 |
Germany\u200c1 | - | 2 206 | 2 206 |
United Kingdom | - | 11 596 | 11 596 |
Norway | - | 25 794 | 25 794 |
Other | - | 598 | 598 |
- | 41 000 | 41 000 |
1Amount relate to interest limitation rules in Germany
Tax losses carried forward of EUR 14 181 thousand are not recognized as a basis for calculating unused tax losses carried forward in net deferred assets/liabilities. The amount not recognized is mainly related to the United Kingdom.
Where transfer pricing adjustments have been made, mutual agreement procedure (MAP) between the affected countries are normally available. See Note 2for further details.
In tax disputes, the Group accounts for tax costs according to decisions made by local tax authorities, or according to subsequent tax rulings in the actual case, or similar cases. A dividend distribution from Elopak Systems AG to Elopak ASA, formerly Elopak AS, in 2011 and 2014 was deemed to be taxable income for Elopak ASA in a decision by Norwegian tax office in 2017. The full tax cost of NOK 69\u00a0600 thousand was recognized and paid in accordance with the ruling at that time. Elopak lost in the Oslo district court in 2022 and Bortgarting court of appeal in March 2024. Elopak will appeal the ruling to the Supreme Court.
The Group operates in Norway, which has enacted new legislation to implement the global minimum tax rules (OECD - Pillar Two). The Group expects to be subject to these rules in relation to its operation in multiple jurisdic-tions, with the newly enacted tax legislation in Norway effective from 1 January 2024.
Tax disputes
In tax disputes, Elopak accounts for tax costs according to decisions made by local tax authorities or according to subsequent tax rulings in the actual case or similar cases. Where transfer pricing adjustments have been made, mutual agreement procedures (MAP) between the affected countries are normally available. A successful MAP procedure, as intended in the double tax treaties between countries, would result in a corresponding tax adjustment in a Group company, thus removing the tax cost for Elopak. Where a MAP process is available, Elopak recognizes tax costs according to the probability of the outcome of the MAP process. If tax authorities within the EU do not agree, taxpayers have the right to demand arbitration. Details regarding ongoing tax disputes are described in Note 9.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAdditionalInformationExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30434": { "value": "Note 03 Revenues
Accounting policy
The Group is a global supplier of paper-based packaging system solutions for liquid products. Revenue from contracts with customers is derived from sale of filling equipment, Pure-Pak\u00aecarton and Roll Fed packaging material (hereby denominated as cartons), closures and related services. Revenue is recognised when control of the goods or services are transferred to the customer and is presented net of returns, trade discounts, volume rebates and other customer incentives. The Group also presents lease income from lease of filling equipment.
Generally, the Group recognises revenue on a point in time basis when the customer takes title to the goods and rewards for the goods. For goods without alternative use where the Group has a legally enforceable right to payment for the goods, the Group recognises revenue over time, which generally is, as the goods are produced.
Sale of cartons and closures
Cartons are printed based on customer specifications and are therefore without alternative use. Cancellation provisions in the customer contracts, combined with background law in the legal jurisdictions give the company an enforceable right to payment for work performed to date as described in IFRS 15. Most of the customer contracts include cancellation clauses that give the company sufficient protection to conclude that there is an enforceable right to payment.
Closures are not customised and therefore with alternative use and recognised at point in time.
Sale of filling equipment
Revenue from sale of filling equipment is recognised at the point in time when control of the asset is transferred to the customer, generally when the machine is tested and accepted by the customer. Filling equipment could result in no alternative use if it would incur significant costs to rework the design and func-tion of the machine to adapt it to another customer. However, in most cases filling equipment is standard equipment and considered to have alternative use, hence they are recognised at point in time.
Sale of service
The Group offers research and development support, after sales services and technical training and main-tenance support. Revenue from support, service and training is recognised over time, as the customer simultaneously receives and consumes the benefit provided to them. The Group uses an input method in measuring progress of the services because there is a direct relationship between the Group\u2019s effort/labour hours occurred and the transfer of service to the customer.
Trade discounts, volume rebates and other incentives
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Cartons are often sold with retrospective volume discounts based on aggregate sales over several months. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. A refund liability is recognised for the expected volume discounts payable to customers in relation to sales made until the end of the reporting period.
No significant element of financing is deemed present, and the Group had no right of return in the reporting period.
Contract liabilities
Payments for filling equipment are generally made in instalments and a contract liability is recognised when a payment is received or due from a customer before the Group transfers the filling equipment. Contract liabilities are recognised as revenue when control of the filling equipment is transferred to the customer.
Contract assets
Contract assets consist of prepaid support (rebate) to customers which will be offset against contracted future purchases of cartons and features. The prepaid support is allocated to the different performance obligations, hereunder filling equipment and cartons/closures. Contract assets include over time revenue for cartons before the right to payment becomes unconditional. See Note 19for disclosure of contract assets.
Remaining performance obligations
Delivery obligations for cartons are completed within one year or less, so we have therefore elected to use exception IFRS 15.121.
The Group's revenues consist of revenue from contracts with customers (99%) and rental income from lease of filling equipment (1%). Revenues are primarily derived from the sale of cartons and closures, sales and rental income related to filling equipment and service.
Revenues specified by geographical area
EUR 1\u00a0000 | 2023 | 2022 |
USA | 219\u00a0203 | 193\u00a0839 |
Germany | 159\u00a0778 | 161\u00a0629 |
Canada | 77\u00a0705 | 68\u00a0778 |
Netherlands | 58\u00a0201 | 56\u00a0215 |
Norway | 27\u00a0120 | 25\u00a0645 |
Other | 590\u00a0036 | 517\u00a0589 |
Total revenue | 1\u00a0132\u00a0043 | 1\u00a0023\u00a0696 |
The revenues are specified by location (country) of the customer.
Revenues by product and operating segment
2023 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Cartons and closures | 755\u00a0682 | 276\u00a0739 | (4\u00a0245) | 1\u00a0028\u00a0177 |
Equipment | 52\u00a0385 | 12\u00a0114 | (14\u00a0227) | 50\u00a0272 |
Service | 52\u00a0113 | - | (971) | 51\u00a0142 |
Other | 10\u00a0278 | 1\u00a0748 | (9\u00a0575) | 2\u00a0451 |
Total revenue | 870\u00a0459 | 290\u00a0601 | (29\u00a0016) | 1\u00a0132\u00a0043 |
2022 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Cartons and closures | 671\u00a0025 | 256\u00a0522 | (3\u00a0797) | 923\u00a0750 |
Equipment | 36\u00a0307 | 2\u00a0183 | (9\u00a0907) | 28\u00a0583 |
Service | 46\u00a0036 | - | (669) | 45\u00a0367 |
Other | 32\u00a0608 | 1\u00a0830 | (8\u00a0442) | 25\u00a0996 |
Total revenue | 785\u00a0976 | 260\u00a0535 | (22\u00a0815) | 1\u00a0023\u00a0696 |
Accounting policy
The Group is a global supplier of paper-based packaging system solutions for liquid products. Revenue from contracts with customers is derived from sale of filling equipment, Pure-Pak\u00aecarton and Roll Fed packaging material (hereby denominated as cartons), closures and related services. Revenue is recognised when control of the goods or services are transferred to the customer and is presented net of returns, trade discounts, volume rebates and other customer incentives. The Group also presents lease income from lease of filling equipment.
Generally, the Group recognises revenue on a point in time basis when the customer takes title to the goods and rewards for the goods. For goods without alternative use where the Group has a legally enforceable right to payment for the goods, the Group recognises revenue over time, which generally is, as the goods are produced.
Sale of cartons and closures
Cartons are printed based on customer specifications and are therefore without alternative use. Cancellation provisions in the customer contracts, combined with background law in the legal jurisdictions give the company an enforceable right to payment for work performed to date as described in IFRS 15. Most of the customer contracts include cancellation clauses that give the company sufficient protection to conclude that there is an enforceable right to payment.
Closures are not customised and therefore with alternative use and recognised at point in time.
Sale of filling equipment
Revenue from sale of filling equipment is recognised at the point in time when control of the asset is transferred to the customer, generally when the machine is tested and accepted by the customer. Filling equipment could result in no alternative use if it would incur significant costs to rework the design and func-tion of the machine to adapt it to another customer. However, in most cases filling equipment is standard equipment and considered to have alternative use, hence they are recognised at point in time.
Sale of service
The Group offers research and development support, after sales services and technical training and main-tenance support. Revenue from support, service and training is recognised over time, as the customer simultaneously receives and consumes the benefit provided to them. The Group uses an input method in measuring progress of the services because there is a direct relationship between the Group\u2019s effort/labour hours occurred and the transfer of service to the customer.
Trade discounts, volume rebates and other incentives
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Cartons are often sold with retrospective volume discounts based on aggregate sales over several months. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. A refund liability is recognised for the expected volume discounts payable to customers in relation to sales made until the end of the reporting period.
No significant element of financing is deemed present, and the Group had no right of return in the reporting period.
Contract liabilities
Payments for filling equipment are generally made in instalments and a contract liability is recognised when a payment is received or due from a customer before the Group transfers the filling equipment. Contract liabilities are recognised as revenue when control of the filling equipment is transferred to the customer.
Contract assets
Contract assets consist of prepaid support (rebate) to customers which will be offset against contracted future purchases of cartons and features. The prepaid support is allocated to the different performance obligations, hereunder filling equipment and cartons/closures. Contract assets include over time revenue for cartons before the right to payment becomes unconditional. See Note 19for disclosure of contract assets.
Remaining performance obligations
Delivery obligations for cartons are completed within one year or less, so we have therefore elected to use exception IFRS 15.121.
The Group's revenues consist of revenue from contracts with customers (99%) and rental income from lease of filling equipment (1%). Revenues are primarily derived from the sale of cartons and closures, sales and rental income related to filling equipment and service.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30586": { "value": "Sale of cartons and closures
Cartons are printed based on customer specifications and are therefore without alternative use. Cancellation provisions in the customer contracts, combined with background law in the legal jurisdictions give the company an enforceable right to payment for work performed to date as described in IFRS 15. Most of the customer contracts include cancellation clauses that give the company sufficient protection to conclude that there is an enforceable right to payment.
Closures are not customised and therefore with alternative use and recognised at point in time.
Sale of filling equipment
Revenue from sale of filling equipment is recognised at the point in time when control of the asset is transferred to the customer, generally when the machine is tested and accepted by the customer. Filling equipment could result in no alternative use if it would incur significant costs to rework the design and func-tion of the machine to adapt it to another customer. However, in most cases filling equipment is standard equipment and considered to have alternative use, hence they are recognised at point in time.
Sale of service
The Group offers research and development support, after sales services and technical training and main-tenance support. Revenue from support, service and training is recognised over time, as the customer simultaneously receives and consumes the benefit provided to them. The Group uses an input method in measuring progress of the services because there is a direct relationship between the Group\u2019s effort/labour hours occurred and the transfer of service to the customer.
Trade discounts, volume rebates and other incentives
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Cartons are often sold with retrospective volume discounts based on aggregate sales over several months. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. A refund liability is recognised for the expected volume discounts payable to customers in relation to sales made until the end of the reporting period.
No significant element of financing is deemed present, and the Group had no right of return in the reporting period.
Contract liabilities
Payments for filling equipment are generally made in instalments and a contract liability is recognised when a payment is received or due from a customer before the Group transfers the filling equipment. Contract liabilities are recognised as revenue when control of the filling equipment is transferred to the customer.
Contract assets
Contract assets consist of prepaid support (rebate) to customers which will be offset against contracted future purchases of cartons and features. The prepaid support is allocated to the different performance obligations, hereunder filling equipment and cartons/closures. Contract assets include over time revenue for cartons before the right to payment becomes unconditional. See Note 19for disclosure of contract assets.
Remaining performance obligations
Delivery obligations for cartons are completed within one year or less, so we have therefore elected to use exception IFRS 15.121.
The Group's revenues consist of revenue from contracts with customers (99%) and rental income from lease of filling equipment (1%). Revenues are primarily derived from the sale of cartons and closures, sales and rental income related to filling equipment and service.
Revenues specified by geographical area
EUR 1\u00a0000 | 2023 | 2022 |
USA | 219\u00a0203 | 193\u00a0839 |
Germany | 159\u00a0778 | 161\u00a0629 |
Canada | 77\u00a0705 | 68\u00a0778 |
Netherlands | 58\u00a0201 | 56\u00a0215 |
Norway | 27\u00a0120 | 25\u00a0645 |
Other | 590\u00a0036 | 517\u00a0589 |
Total revenue | 1\u00a0132\u00a0043 | 1\u00a0023\u00a0696 |
The revenues are specified by location (country) of the customer.
Revenues by product and operating segment
2023 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Cartons and closures | 755\u00a0682 | 276\u00a0739 | (4\u00a0245) | 1\u00a0028\u00a0177 |
Equipment | 52\u00a0385 | 12\u00a0114 | (14\u00a0227) | 50\u00a0272 |
Service | 52\u00a0113 | - | (971) | 51\u00a0142 |
Other | 10\u00a0278 | 1\u00a0748 | (9\u00a0575) | 2\u00a0451 |
Total revenue | 870\u00a0459 | 290\u00a0601 | (29\u00a0016) | 1\u00a0132\u00a0043 |
2022 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Cartons and closures | 671\u00a0025 | 256\u00a0522 | (3\u00a0797) | 923\u00a0750 |
Equipment | 36\u00a0307 | 2\u00a0183 | (9\u00a0907) | 28\u00a0583 |
Service | 46\u00a0036 | - | (669) | 45\u00a0367 |
Other | 32\u00a0608 | 1\u00a0830 | (8\u00a0442) | 25\u00a0996 |
Total revenue | 785\u00a0976 | 260\u00a0535 | (22\u00a0815) | 1\u00a0023\u00a0696 |
Remaining performance obligations
Delivery obligations for cartons are completed within one year or less, so we have therefore elected to use exception IFRS 15.121.
The Group's revenues consist of revenue from contracts with customers (99%) and rental income from lease of filling equipment (1%). Revenues are primarily derived from the sale of cartons and closures, sales and rental income related to filling equipment and service.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f31620": { "value": "Note 04 Operating segments
Information reported to the Group's chief operating decision makers, the Group Leadership Team, for the purpose of resource allocation and assessment of segment performance is focused on two key geographical regions \u2013 EMEA and Americas. GLS Elopak is included in EMEA. Key figures representing the financial performance of these segments are presented in the following note. Refer to Note 13for disclosure of fixed assets specified by geographical area. The tables include investments in continuing operations only.
2023 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Revenue from contracts with customers | 842\u00a0304 | 288\u00a0882 | 857 | 1\u00a0132\u00a0043 |
Other income | 61 | 83 | - | 145 |
Total income from external customers | 842\u00a0365 | 288\u00a0965 | 857 | 1\u00a0132\u00a0187 |
Revenue from other group segments | 28\u00a0153 | 1\u00a0718 | (29\u00a0872) | - |
Total income | 870\u00a0519 | 290\u00a0684 | (29\u00a0015) | 1\u00a0132\u00a0187 |
Operating expenses\u200c1 | (734\u00a0923) | (230\u00a0120) | (3\u00a0034) | (968\u00a0076) |
Depreciation and amortization | (50\u00a0589) | (7\u00a0159) | (2\u00a0398) | (60\u00a0147) |
Impairment | (1\u00a0186) | - | - | (1\u00a0186) |
Operating profit | 83\u00a0821 | 53\u00a0405 | (34\u00a0446) | 102 778 |
EBITDA\u200c2 | 135\u00a0595 | 60\u00a0564 | (32\u00a0048) | 164\u00a0111 |
Adjusted EBITDA\u200c2 | 135\u00a0482 | 67\u00a0433 | (32\u00a0048) | 170\u00a0867 |
Total assets | 967\u00a0566 | 186\u00a0563 | (191\u00a0519) | 962\u00a0610 |
Purchase of non-current assets during the year | 38\u00a0353 | 1\u00a0756 | 665 | 40\u00a0774 |
2022 | ||||
EUR 1\u00a0000 | EMEA | Americas | Other and eliminations | Total |
Revenue from contracts with customers | 764\u00a0434 | 258\u00a0748 | 514 | 1\u00a0023\u00a0695 |
Other income | 157 | - | - | 157 |
Total income from external customers | 764\u00a0591 | 258\u00a0748 | 514 | 1\u00a0023\u00a0853 |
Revenue from other group segments | 21\u00a0542 | 1\u00a0787 | (23\u00a0329) | - |
Total income | 786\u00a0133 | 260\u00a0535 | (22\u00a0815) | 1\u00a0023\u00a0853 |
Operating expenses\u200c1 | (693\u00a0984) | (213\u00a0558) | (6\u00a0410) | (913\u00a0952) |
Depreciation and amortization | (51\u00a0564) | (7\u00a0164) | (2\u00a0800) | (61\u00a0528) |
Impairment | (6\u00a0338) | (261) | - | (6\u00a0599) |
Operating profit | 34\u00a0247 | 39\u00a0551 | (32\u00a0024) | 41\u00a0774 |
EBITDA\u200c2 | 92\u00a0149 | 46\u00a0976 | (29\u00a0224) | 109\u00a0901 |
Adjusted EBITDA\u200c2 | 94\u00a0283 | 51\u00a0466 | (26\u00a0336) | 119\u00a0413 |
Total assets | 945\u00a0626 | 157\u00a0111 | (146\u00a0258) | 956\u00a0479 |
Purchase of non-current assets during the year | 45\u00a0006 | 5\u00a0657 | (6\u00a0949) | 43\u00a0714 |
1Operating expenses include cost of materials, payroll expenses, and other operating expenses.
2See the APM disclosure for the reconciliation of EBITDA and adjusted EBITDA.
Note 05 Payroll expenses, numbers of employees, benefits etc.
The table includes investments in continuing operations only.
EUR 1\u00a0000 | 2023 | 2022 |
Salary | (151\u00a0449) | (140\u00a0957) |
Social security | (23\u00a0585) | (22\u00a0173) |
Pension defined benefit plans (Note21) | (99) | (84) |
Pension defined contribution plans (Note21) | (9\u00a0996) | (9\u00a0597) |
Other benefits | (4\u00a0495) | (3\u00a0911) |
Total | (189\u00a0623) | (176\u00a0721) |
Man-year Elopak employees (excl. equity investees) | 2\u00a0018 | 2\u00a0100 |
Note 21 Employee retirement benefit plans
Defined contribution plans
The Group operates defined contribution pension plans where the plans are held separately from those of the Group in funds under control of trustees. The only obligation of the Group is to make the specified contributions.
Defined benefit plans
The Group also runs pension plans that grant the employees a right to defined future benefits. The benefits are mainly dependent on years of service, the level of salary at age of retirement and size of contributions from the national insurance. The obligations are partly covered through insurance companies. Elopak has unfunded retiree medical insurance plans for certain of its employees located in the United States.
Pension liability
EUR 1\u00a0000 | 2023 | 2022 |
Defined benefit obligations | (2\u00a0502) | (2\u00a0668) |
Net pension liability | (2\u00a0502) | (2\u00a0668) |
Pension expense
EUR 1\u00a0000 | 2023 | 2022 |
Defined benefit plans net | (99) | (84) |
Defined contribution plans | (9\u00a0996) | (9\u00a0597) |
Total pension expense | (10\u00a0095) | (9\u00a0681) |
Defined benefit plans are subject to actuarial calculations. The estimated pension cost for pension benefit plans in 2023 is EUR 99 thousand and in 2022 is EUR 84 thousand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f32315": { "value": "Note 05 Payroll expenses, numbers of employees, benefits etc.
The table includes investments in continuing operations only.
EUR 1\u00a0000 | 2023 | 2022 |
Salary | (151\u00a0449) | (140\u00a0957) |
Social security | (23\u00a0585) | (22\u00a0173) |
Pension defined benefit plans (Note21) | (99) | (84) |
Pension defined contribution plans (Note21) | (9\u00a0996) | (9\u00a0597) |
Other benefits | (4\u00a0495) | (3\u00a0911) |
Total | (189\u00a0623) | (176\u00a0721) |
Man-year Elopak employees (excl. equity investees) | 2\u00a0018 | 2\u00a0100 |
Note 06 Share-based payments
In November 2023 the Group expanded the long-term incentive program to include senior management. Under the expanded program PSUs (Performance Share Units) of the parent are granted to members of the Group Leadership Team (GLT) and senior management. One PSU (instrument) equals one share. The eligible employees will be granted an annual award of shares from the company if certain performance criteria are met.
The key terms and conditions related to the grants are as follows:
KPI Categories | Weighted | Metric |
Financial targets | 50% | Adjusted EBITDA less normalized capex |
People and Planet targets | 20% | Environmental target (Co2emission) |
Shareholder value targets | 30% | Total shareholders return (TSR) |
The granted PSUs will be gradually vested during a 3-year period. Allocation of PSUs will be based on % of base pay, maximum allocation of 80% for CEO, 50% for Group Leadership Team members, and between 10 to 15% for senior management.
The fair value of the PSUs related to TSR is estimated at the grant date through a Monte Carlo simulation. The fair value of the PSU's related to the remaining KPIs are equal to the share price at grant date. However, the above performance condition is only considered in determining the number of PSUs that will ultimately vest.
The PSUs will under normal circumstances be exercised as soon as possible after each vesting date. There are no cash settlement alternatives. The Group does not have a past practice of cash settlement for these PSUs. The Group accounts for the PSUs as an equity-settled plan.
There is no exercise price to any of the PSUs, and therefore the weighted average exercise price for all instruments are zero.
Reconciliation of outstanding Performance share units
Number of instruments in thousands (PSU) | 2023 Number of options | 2022 Number of options |
Outstanding at 1.1\u200c | 699 | - |
Granted during the year | 1\u00a0616 | 744 |
Performance adjusted | 45 | (45) |
Forfeited during the year | - | - |
Exercised during the year\u200c | (149) | - |
Expired during the year | - | - |
Outstanding at 31.12 | 2\u00a0211 | 699 |
Exercisable at 31.12 (vested) | - | - |
Weighted average remaining contractual life outstanding at end of period | 1.87 years | 2.52 years |
The weighted average share price at the date of exercise was EUR 2.27 in 2023.
The weighted average fair value of PSU granted was EUR 1.40 during 2023 and EUR 2.32 in 2022.
The following tables list the inputs to the models used for the years ended 31 December:
Assumptions and inputs for options granted during the year | 2023 | 2022 |
FV per instrument\u200c1 | \u20ac 1.40 | \u20ac 2.32 |
Dividend yield\u200c1 | - | - |
Expected volatility\u200c1 | 21.06% | 7.95% |
Risk-free interest rate\u200c1 | 1.81% | 3.09% |
Contractual life\u200c1 | 2.55 | 2.63 |
Expected lifetime\u200c\u200c1 | 0.32 | 0.03 |
Weighted average share price (\u20ac) | \u20ac 2.02 | \u20ac 2.32 |
1Weighted average parameters at grant of instrument
Expected volatility is assessed based on historical volatility of the Company\u2019s share price, with more weight to the expected term period. The expected term of the instruments has been based on historical experience and general option holder behavior.
Components of share-based payments employee benefit expense | 2023 | 2022 |
Share based payment | (1\u00a0445) | (89) |
Social security contribution | (196) | (9) |
Total expenses related to share-based payments | (1\u00a0640) | (98) |
Note 07 Other operating expenses
EUR 1\u00a0000 | 2023 | 2022 |
Sales and administration expenses | (7\u00a0733) | (6\u00a0908) |
Occupancy and maintenance expenses | (5\u00a0201) | (4\u00a0907) |
Travel expenses | (11\u00a0313) | (8\u00a0660) |
Losses and changes in allowance for bad debt | (571) | (920) |
Consultants, auditors, lawyers, etc | (16\u00a0423) | (17\u00a0759) |
IT expenses | (10\u00a0901) | (10\u00a0332) |
Other expenses | (6\u00a0516) | (6\u00a0271) |
Total | (58\u00a0658) | (55\u00a0757) |
Financial income
EUR 1\u00a0000 | 2023 | 2022 |
Interest income from bank deposits | 3\u00a0346 | 782 |
Other interest income\u200c1 | 285 | 8\u00a0459 |
Finance lease interest income | 555 | 637 |
Other financial income | 3\u00a0621 | 428 |
Total | 7\u00a0807 | 10\u00a0305 |
1Other interest income in 2022 includes gains from interest rate derivatives of EUR 8 399 thousand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f33524": { "value": "Financial expense
EUR 1\u00a0000 | 2023 | 2022 |
Interest expense to financial institutions | (14 402) | (5\u00a0658) |
Other interest expense\u200c1 | (4\u00a0657) | (347) |
Lease liability interest | (6\u00a0566) | (4\u00a0575) |
Other financial expenses | (6\u00a0428) | (2\u00a0453) |
Total | (32\u00a0064) | (13\u00a0033) |
1Other interest expense in 2023 includes loss from interest rate derivatives of EUR 5\u00a0518 thousand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f33664": { "value": "Note 09 Income tax
Income tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Current income tax | ||
Current income tax charge | 20\u00a0405 | 13\u00a0214 |
Adjustments in respect of current income tax of previous year | (2\u00a0934) | (2\u00a0583) |
Withholding tax | 1\u00a0107 | 2\u00a0337 |
Total current income tax | 18\u00a0578 | 12\u00a0968 |
Deferred tax | ||
Deferred tax cost | (2\u00a0519) | (1\u00a0243) |
Effect of changed tax rate and corrections previous years | (545) | 463 |
Total deferred tax | (3\u00a0064) | (780) |
Income tax expense reported in the statement of comprehensive income | 15\u00a0514 | 12\u00a0188 |
Payable tax
EUR 1\u00a0000 | 2023 | 2022 |
Payable tax opening balance | (3\u00a0185) | (2\u00a0616) |
Current income tax | 18\u00a0578 | 12\u00a0968 |
Translation | (278) | 102 |
Net tax paid | (14\u00a0356) | (13\u00a0638) |
Payable tax closing balance | 759 | (3 184) |
Reconciliation of tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Profit before income tax | 84\u00a0879 | 46\u00a0407 |
Expected tax at statutory tax rate\u200c1 | 20\u00a0371 | 11\u00a0138 |
Adjustments in respect of different local tax rates | 2\u00a0151 | 1\u00a0300 |
Non-taxable income/expense | - | - |
Share of results of joint ventures | (1\u00a0645) | (1\u00a0051) |
Adjustments in respect of income tax of previous years | (2\u00a0626) | (2\u00a0336) |
Withholding tax, non-refundable | 1\u00a0107 | 2\u00a0337 |
Adjustments in respect of changes to tax rates and regulations | (853) | 564 |
Currency translation effects | (4\u00a0630) | (2\u00a0233) |
Other differences | 1\u00a0640 | 2\u00a0468 |
Income tax expense | 15\u00a0514 | 12\u00a0188 |
Effective income tax rate | 18.3% | 26.3% |
1The expected tax at statutory tax rate of 24% (24% in 2022) is based on an estimate of where the Group taxes its profits and the corresponding applicable tax rates
Change in deferred tax on items in Other Comprehensive Income/Equity
EUR 1\u00a0000 | 2023 | 2022 |
Remeasurement gain/loss on actuarial gains and losses | 211 | 266 |
Cash flow hedges | (406) | (1\u00a0957) |
Equity transactions | (409) | (330) |
Change in deferred tax on items in Other Comprehensive Income/Equity | (603) | (2\u00a0020) |
Deferred tax
EUR 1\u00a0000 | 2023 | 2022 |
Revaluation of inventories | 16\u00a0795 | 13\u00a0564 |
Payables/receivables | 23\u00a0538 | 13\u00a0977 |
Non-current assets | (14\u00a0729) | (10\u00a0131) |
Fixed assets depreciations | (7\u00a0927) | (8\u00a0592) |
Liquid assets | (17\u00a0971) | (14\u00a0302) |
Losses available for offsetting against future taxable income | 9\u00a0427 | 9\u00a0101 |
Other differences | (292) | 1\u00a0557 |
Total deferred tax | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets | 22\u00a0883 | 22\u00a0414 |
Deferred tax liabilities | 14\u00a0041 | 17\u00a0240 |
Net deferred assets/liabilities | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets are evaluated at each balance sheet date and recognized to the extent that it is probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability shall be settled or the asset to be realized, based on tax rates and laws that have been enacted or substan-tively enacted at the balance sheet date.
Specification of tax losses carried forward \u2013 country and year of expire
EUR 1\u00a0000 | After 2025 | Indefinite | Total |
Canada | - | 805 | 805 |
Germany\u200c1 | - | 2 206 | 2 206 |
United Kingdom | - | 11 596 | 11 596 |
Norway | - | 25 794 | 25 794 |
Other | - | 598 | 598 |
- | 41 000 | 41 000 |
1Amount relate to interest limitation rules in Germany
Tax losses carried forward of EUR 14 181 thousand are not recognized as a basis for calculating unused tax losses carried forward in net deferred assets/liabilities. The amount not recognized is mainly related to the United Kingdom.
Where transfer pricing adjustments have been made, mutual agreement procedure (MAP) between the affected countries are normally available. See Note 2for further details.
In tax disputes, the Group accounts for tax costs according to decisions made by local tax authorities, or according to subsequent tax rulings in the actual case, or similar cases. A dividend distribution from Elopak Systems AG to Elopak ASA, formerly Elopak AS, in 2011 and 2014 was deemed to be taxable income for Elopak ASA in a decision by Norwegian tax office in 2017. The full tax cost of NOK 69\u00a0600 thousand was recognized and paid in accordance with the ruling at that time. Elopak lost in the Oslo district court in 2022 and Bortgarting court of appeal in March 2024. Elopak will appeal the ruling to the Supreme Court.
The Group operates in Norway, which has enacted new legislation to implement the global minimum tax rules (OECD - Pillar Two). The Group expects to be subject to these rules in relation to its operation in multiple jurisdic-tions, with the newly enacted tax legislation in Norway effective from 1 January 2024.
Note 09 Income tax
Income tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Current income tax | ||
Current income tax charge | 20\u00a0405 | 13\u00a0214 |
Adjustments in respect of current income tax of previous year | (2\u00a0934) | (2\u00a0583) |
Withholding tax | 1\u00a0107 | 2\u00a0337 |
Total current income tax | 18\u00a0578 | 12\u00a0968 |
Deferred tax | ||
Deferred tax cost | (2\u00a0519) | (1\u00a0243) |
Effect of changed tax rate and corrections previous years | (545) | 463 |
Total deferred tax | (3\u00a0064) | (780) |
Income tax expense reported in the statement of comprehensive income | 15\u00a0514 | 12\u00a0188 |
Payable tax
EUR 1\u00a0000 | 2023 | 2022 |
Payable tax opening balance | (3\u00a0185) | (2\u00a0616) |
Current income tax | 18\u00a0578 | 12\u00a0968 |
Translation | (278) | 102 |
Net tax paid | (14\u00a0356) | (13\u00a0638) |
Payable tax closing balance | 759 | (3 184) |
Reconciliation of tax expense
EUR 1\u00a0000 | 2023 | 2022 |
Profit before income tax | 84\u00a0879 | 46\u00a0407 |
Expected tax at statutory tax rate\u200c1 | 20\u00a0371 | 11\u00a0138 |
Adjustments in respect of different local tax rates | 2\u00a0151 | 1\u00a0300 |
Non-taxable income/expense | - | - |
Share of results of joint ventures | (1\u00a0645) | (1\u00a0051) |
Adjustments in respect of income tax of previous years | (2\u00a0626) | (2\u00a0336) |
Withholding tax, non-refundable | 1\u00a0107 | 2\u00a0337 |
Adjustments in respect of changes to tax rates and regulations | (853) | 564 |
Currency translation effects | (4\u00a0630) | (2\u00a0233) |
Other differences | 1\u00a0640 | 2\u00a0468 |
Income tax expense | 15\u00a0514 | 12\u00a0188 |
Effective income tax rate | 18.3% | 26.3% |
1The expected tax at statutory tax rate of 24% (24% in 2022) is based on an estimate of where the Group taxes its profits and the corresponding applicable tax rates
Change in deferred tax on items in Other Comprehensive Income/Equity
EUR 1\u00a0000 | 2023 | 2022 |
Remeasurement gain/loss on actuarial gains and losses | 211 | 266 |
Cash flow hedges | (406) | (1\u00a0957) |
Equity transactions | (409) | (330) |
Change in deferred tax on items in Other Comprehensive Income/Equity | (603) | (2\u00a0020) |
Deferred tax
EUR 1\u00a0000 | 2023 | 2022 |
Revaluation of inventories | 16\u00a0795 | 13\u00a0564 |
Payables/receivables | 23\u00a0538 | 13\u00a0977 |
Non-current assets | (14\u00a0729) | (10\u00a0131) |
Fixed assets depreciations | (7\u00a0927) | (8\u00a0592) |
Liquid assets | (17\u00a0971) | (14\u00a0302) |
Losses available for offsetting against future taxable income | 9\u00a0427 | 9\u00a0101 |
Other differences | (292) | 1\u00a0557 |
Total deferred tax | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets | 22\u00a0883 | 22\u00a0414 |
Deferred tax liabilities | 14\u00a0041 | 17\u00a0240 |
Net deferred assets/liabilities | 8\u00a0842 | 5\u00a0174 |
Deferred tax assets are evaluated at each balance sheet date and recognized to the extent that it is probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability shall be settled or the asset to be realized, based on tax rates and laws that have been enacted or substan-tively enacted at the balance sheet date.
Specification of tax losses carried forward \u2013 country and year of expire
EUR 1\u00a0000 | After 2025 | Indefinite | Total |
Canada | - | 805 | 805 |
Germany\u200c1 | - | 2 206 | 2 206 |
United Kingdom | - | 11 596 | 11 596 |
Norway | - | 25 794 | 25 794 |
Other | - | 598 | 598 |
- | 41 000 | 41 000 |
1Amount relate to interest limitation rules in Germany
Tax losses carried forward of EUR 14 181 thousand are not recognized as a basis for calculating unused tax losses carried forward in net deferred assets/liabilities. The amount not recognized is mainly related to the United Kingdom.
Where transfer pricing adjustments have been made, mutual agreement procedure (MAP) between the affected countries are normally available. See Note 2for further details.
In tax disputes, the Group accounts for tax costs according to decisions made by local tax authorities, or according to subsequent tax rulings in the actual case, or similar cases. A dividend distribution from Elopak Systems AG to Elopak ASA, formerly Elopak AS, in 2011 and 2014 was deemed to be taxable income for Elopak ASA in a decision by Norwegian tax office in 2017. The full tax cost of NOK 69\u00a0600 thousand was recognized and paid in accordance with the ruling at that time. Elopak lost in the Oslo district court in 2022 and Bortgarting court of appeal in March 2024. Elopak will appeal the ruling to the Supreme Court.
The Group operates in Norway, which has enacted new legislation to implement the global minimum tax rules (OECD - Pillar Two). The Group expects to be subject to these rules in relation to its operation in multiple jurisdic-tions, with the newly enacted tax legislation in Norway effective from 1 January 2024.
Note 10 Discontinued operations
On July 15, 2022 Elopak ASA and Packaging Management and Investing LLC, a company beneficially owned by management of JSC Elopak, reached an agreement for the sale and purchase of all of Elopak\u2019s shares in JSC Elopak. This represented a full divestment by Elopak from its existing Russian operations.
Transfer of the shares in JSC Elopak was carried out in February 2023 after officially approval from the Russian Government. However, the terms of the SPA implied that Elopak lost control of JSC Elopak on the date it was signed, hence the entity was deconsolidated from Q3 2022.
As Elopak\u2019s operations in Russia represented a single major geographical area of operations and previously have been presented as a separate reporting segment, Elopak is presenting the profit and loss from Russia as discon-tinued. The purchase price is payable in five annual instalments. The receivable was measured and recognized at the share\u2019s fair value on the transaction date. After initial recognition the receivable is being measured at amortized cost. Elopak ASA received the first instalment in June 2023 and part of the second installment in July 2023.
One of Elopak\u2019s former customers in Russia has won a legal claim against JSC Elopak which then has been put forward to Elopak ASA as a reimbursable claim. The legal claim has been appealed. The claim represents a contingent liability which has been recognized in the statement of comprehensive income as part of discontinued operations in 2023.
Discontinued operations
Year to date ended December 31 | ||
EUR 1\u00a0000 | 2023 | 2022 |
Revenues | - | 18\u00a0184 |
Total income | - | 18\u00a0184 |
Cost of materials | - | (15\u00a0197) |
Payroll expenses | - | (2\u00a0311) |
Depreciation, amortization and impairment | - | (9\u00a0921) |
Other operating expenses | (1\u00a0339) | (1\u00a0034) |
Total operating expenses | (1\u00a0339) | (28\u00a0463) |
Operating profit | (1\u00a0339) | (10\u00a0278) |
Net financial income | - | (2\u00a0452) |
Profit before tax | (1\u00a0339) | (12\u00a0730) |
Income tax | - | (797) |
Results from discontinued operations, net of tax | (1\u00a0339) | (13\u00a0527) |
Loss on sale of discontinued operations | - | (10\u00a0095) |
Income tax on gain on sale | - | - |
Profit/loss from discontinued operations | (1\u00a0339) | (23\u00a0622) |
Net cash flow from operating activities | - | 1\u00a0834 |
Net cash flow from investing activities | - | - |
Net cash flow from financing activities | - | (186) |
Foreign currency translations | - | 635 |
Net change in cash and cash equivalents | - | 2\u00a0283 |
Note 11 Development cost and other intangible assets
Accounting policy
Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally generated intangible asset arising from development is recognized in the statement of financial position if the recognition criteria in IAS 38 are met. After initial recognition the assets are carried at cost less any accumu-lated amortization and impairment losses. See Note 1for impairment of non-financial assets accounting policy.
Development cost and other intangible assets
2023 | ||||
EUR 1\u00a0000 | Customer relations | Development costs | IT-software | Total |
Cost at 1.1 | 26\u00a0183 | 47\u00a0814 | 79\u00a0502 | 153\u00a0499 |
Additions | - | 5\u00a0215 | 1\u00a0415 | 6\u00a0630 |
Disposals | - | (146) | (126) | (272) |
Reclassification | - | - | - | - |
Currency translation | 286 | 6 | (121) | 171 |
Cost at 31.12 | 26\u00a0469 | 52\u00a0889 | 80\u00a0671 | 160\u00a0029 |
Acc. amortization and impairment losses at 1.1 | 5\u00a0698 | 25\u00a0748 | 50\u00a0722 | 82\u00a0168 |
Current year amortization charge | 2\u00a0812 | 4\u00a0084 | 8\u00a0744 | 15\u00a0640 |
Current year impairment charge | - | - | 17 | 17 |
Amortization disposals | - | - | (29) | (29) |
Impairment disposals | - | - | - | - |
Reclassification | - | - | - | - |
Currency translation amortization | 50 | - | (109) | (59) |
Currency translation impairment | - | - | (9) | (9) |
Accumulated amortization at 31.12 | 8\u00a0560 | 29\u00a0832 | 58\u00a0761 | 97\u00a0152 |
Net accumulated impairment at 31.12 | - | - | 576 | 576 |
Carrying amount 31.12 | 17\u00a0910 | 23\u00a0057 | 21\u00a0334 | 62\u00a0300 |
Economic life | 0-8 years | 5-10 years | 3-7 years | |
Amortization method | Linear | Linear | Linear |
2022 | ||||
EUR 1\u00a0000 | Customer relations | Development costs | IT-software | Total |
Cost at 1.1 | - | 44\u00a0183 | 76\u00a0579 | 120\u00a0762 |
Business combinations | 26\u00a0824 | - | - | 26\u00a0824 |
Additions | - | 3\u00a0643 | 3\u00a0211 | 6\u00a0853 |
Disposals | - | - | (430) | (430) |
Reclassification | - | - | - | - |
Currency translation | (641) | (12) | 142 | (510) |
Cost at 31.12 | 26\u00a0183 | 47\u00a0814 | 79\u00a0502 | 153\u00a0499 |
Acc. amortization and impairment losses at 1.1 | - | 21\u00a0740 | 42\u00a0160 | 63\u00a0900 |
Current year amortization charge | 6\u00a0035 | 4\u00a0007 | 8\u00a0510 | 18\u00a0552 |
Current year impairment charge | - | - | 287 | 287 |
Amortization disposals | - | - | (362) | (362) |
Impairment disposals | - | - | - | - |
Reclassification | - | - | - | - |
Currency translation amortization | (337) | - | 130 | (207) |
Currency translation impairment | - | - | (3) | (3) |
Accumulated amortization at 31.12 | 5\u00a0698 | 25\u00a0748 | 50\u00a0155 | 81\u00a0600 |
Net accumulated impairment at 31.12 | - | - | 568 | 568 |
Carrying amount 31.12 | 20\u00a0485 | 22\u00a0066 | 28\u00a0780 | 71\u00a0331 |
Economic life | 0-8 years | 5-10 years | 3-7 years | |
Amortization method | Linear | Linear | Linear |
Customer relations include fair value of customer and supply contracts from the acquisition of GLS Elopak and Naturepak Beverage Packaging Ltd in 2022. Customer relations have an estimated economic life of 8 years. See note 27for further details.
The additions under development costs relate to the development of new filling and production machine technology.
Most of the IT-software are additions related to investments in IT system for management of materials flow and finances. The system roll-out started in 2017 and continued throughout 2023.
Research and development
The cost of research and development not eligible for capitalization which have been expensed in 2023 amounts to EUR 12\u00a0823 thousand. Comparable amount in 2022 was EUR 12\u00a0501 thousand.
Accounting policy
Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally generated intangible asset arising from development is recognized in the statement of financial position if the recognition criteria in IAS 38 are met. After initial recognition the assets are carried at cost less any accumu-lated amortization and impairment losses. See Note 1for impairment of non-financial assets accounting policy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36527": { "value": "Note 12 Goodwill
Accounting policy
Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impair-ment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
The table below shows the cost value, additions, disposals, impairment charges and carrying value for the various goodwill items in the Group.
Goodwill
EUR 1\u00a0000 | 2023 | 2022 |
Cost at 1.1 | 111\u00a0181 | 58\u00a0089 |
Business combinations (note27) | - | 57\u00a0089 |
Currency translation | 1\u00a0093 | (3\u00a0997) |
Cost at 31.12 | 112\u00a0274 | 111\u00a0181 |
Accumulated impairment 1.1. | 6\u00a0223 | 6\u00a0223 |
Current year impairment charge | - | - |
Currency translation impairment | (9) | - |
Accumulated impairment at 31.12 | 6\u00a0213 | 6\u00a0223 |
Carrying amount 31.12 | 106\u00a0061 | 104\u00a0958 |
Impairment test for goodwill
Goodwill is allocated to the Group's cash generating units and is tested for impairment annually or more frequently if there are indications of impairment. Testing for impairment involves the determination of the recoverable amount of the cash generating unit. The recoverable amount is determined by discounting future expected cash flows, based on the business plans for the cash generating units. The discount rate applied to the future cash flow is based on the Group's weighted average cost of capital (WACC), adapted to the market's apprehension of the risk factors for each cash generating unit. Growth rates are used to project cash flows beyond the periods covered by the business plans.
Cash generating units
The goodwill items specified above are related to the Elopak Group. Goodwill related to acquisition of Elopak Denmark A/S, Elopak AB, Elofin OY, Variopak and Naturepak Beverage Packing Co.Ltd. are allocated to the cash generating unit Europe. This CGU, renamed to Elopak EMEA following the acquisition of Naturepak Beverage Packing Co.Ltd. in March 2022, consists of Elopak\u2019s European markets, including the internal production and supply organization and Naturepak Beverage, a leading provider of fresh liquid carton and packaging systems in the MENA region with local production facilities in Morocco and Saudi Arabia. These goodwill items have a carrying value of EUR 103\u00a0204 thousand as of December 31, 2023 (EUR 102\u00a0018 thousand as of December 31, 2022). Goodwill related to the acquisition of GLS Elopak in April 2022 is allocated to a separate cash generating unit as operations are mainly in India (GLS Elopak buys raw materials, produces cartons and sells goods to the customers). This goodwill item has a carrying value of EUR 2\u00a0817 thousand as of December 31, 2023 (EUR 2\u00a0940 thousand as of December 31, 2022).
The basis to consider Elopak EMEA as one cash generating unit is the inherent structure of the market. Customers are merging across borders and are increasingly treating EMEA as one market. The historical requirement from customers to source from specific plants is no longer present. Elopak is adapting to this trend by allocating produc-tion flexibly to the plants in EMEA in order to optimize logistics and production cost. According to this development, the margins along Elopak\u2019s value chain will be subject to change from one year to another, and therefore the appropriate way to assess indicators for impairment for the EMEA business is as one unit.
Impairment test and assumptions
Recoverable amount for the cash generating units Elopak EMEA and GLS Elopak are calculated based on values in use. The cash flows that are basis for the impairment tests are based on assumptions about future sales volumes, selling prices and direct costs. These are uncertain factors. These assumptions are based on historical experience from the relevant markets, adopted budgets and the Group\u2019s expectations of market changes and other financial impacts from climate risks. Upon completion of the impairment tests in 2023 and 2022 the Group does not expect significant changes in current trade in EMEA and expected future cash flows there are mainly a continuation of observed trends. GLS Elopak is continuing its expansion, relying on a huge and one of the fastest growing carton market in the world.
Calculated recoverable amounts in the impairment tests are higher than carrying amounts, and based on the tests, it is concluded that there is no impairment in 2023 or 2022.
Determined cash flows are discounted with discount rates presented in the table below.
Detailed description of the assumptions used
Discount rate after tax | Discount rate before tax | Growth rate 2-5 years | Long-term growth rate | |||||
EUR 1\u00a0000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Elopak EMEA | 6.9% | 7.7% | 7.4% | 11.0% | - | - | - | - |
GLS Elopak | 13.1% | 12.5% | 14.1% | 17.9% | - | - | - | - |
The discount rates reflect the current markets assessment of the risk specific to the cash generating unit. The rates are estimated based on the weighted average cost of capital for similar assets in the market. The economic outlook remains uncertain in terms of continued high inflation, still increasing interest rates and heightened geopolitical risk, which all increases threat of recession. This will determine the corporate loan market and debt capital market going forward, which all saw increases in credit spreads in mid-2022 and has since then been volatile. The cost of debt in our discount rates are based on our current long-term financing, and sensitivities related to changes in this is reflected in the analysis discussed below.
Average growth rate for the future 2 to 5 years period is based on Elopak Group's expectations for the market development that the business operates in. When estimating future cash flows committed operating efficiency improvement measures are taken into account. Changes in the outcomes for these initiatives may influence future estimated cash flows.
Investment costs necessary to meet expected future growth are taken into account. Based on management's assessment, the estimated investment costs do not include investments that improve the assets performance. The\u00a0related cash flows are treated correspondingly.
Management believes that there is no reasonably possible change in any of the key assumptions that would cause the carrying value of the unit to materially exceed its recoverable amount. Sensitivity analysis have been performed based on a 0.5% increase and decrease of the discount rate and perpetual growth. The value in the low end of the range is higher than the carrying amount, hence the sensitivity analysis shows no indication of impairment.
Accounting policy
Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impair-ment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38006": { "value": "Note 13 Property, plant and equipment
Accounting policy
Capitalized property, plant and equipment are reflected at cost less accumulated depreciation and accumu-lated impairment losses. Property, plant and equipment, other than land and properties under construction, are depreciated over their estimated useful lives, using the straight-line method and taking into consideration any residual values. See Note 1for impairment of non-financial assets accounting policy.
Property, plant and equipment
2023 | ||||
EUR 1\u00a0000 | Landand buildings | Machineryand plant | Officeand transport | Total |
Cost at 1.1 | 52\u00a0701 | 556\u00a0880 | 20\u00a0390 | 629\u00a0971 |
Additions | 256 | 34\u00a0198 | 381 | 34\u00a0835 |
Disposals | (434) | (1\u00a0602) | (370) | (2\u00a0406) |
Transfer to/from inventory / reclassification | 2\u00a0475 | (4\u00a0535) | 634 | (1\u00a0426) |
Currency translation | (305) | (2\u00a0694) | (124) | (3\u00a0123) |
Cost at 31.12 | 54\u00a0692 | 582\u00a0248 | 20\u00a0911 | 657\u00a0851 |
Acc. depreciation and impairment losses at 1.1 | 29\u00a0375 | 381\u00a0609 | 17\u00a0012 | 427\u00a0997 |
Current year depreciation charge | 1\u00a0610 | 27\u00a0981 | 1\u00a0453 | 31\u00a0043 |
Current year impairment charge\u200c | 164 | 979 | 25 | 1\u00a0168 |
Depreciation disposals | (301) | (1\u00a0072) | (361) | (1\u00a0734) |
Impairment disposals | (132) | (36) | (4) | (172) |
Depreciation transferred to inventory / reclassification | - | (1\u00a0625) | - | (1\u00a0625) |
Impairment transferred to inventory / reclassification | - | - | - | - |
Currency translation | (80) | (1\u00a0587) | (93) | (1\u00a0760) |
Acc. depreciation and impairment losses at 31.12 | 30\u00a0636 | 406\u00a0249 | 18\u00a0032 | 454\u00a0917 |
Carrying amount 31.12 | 24\u00a0056 | 175\u00a0999 | 2\u00a0879 | 202\u00a0934 |
Economic life | 0-40 years | 3-15 years | 3-12 years | |
Amortization method | Linear | Linear | Linear |
2022 | ||||
EUR 1\u00a0000 | Landand buildings | Machineryand plant | Officeand transport | Total |
Cost at 1.1 | 41\u00a0524 | 532\u00a0615 | 20\u00a0724 | 594\u00a0863 |
Business combinations | 10\u00a0184 | 11\u00a0305 | 135 | 21\u00a0623 |
Additions | 227 | 37\u00a0940 | 304 | 38\u00a0471 |
Disposals | (176) | (6\u00a0153) | (476) | (6\u00a0805) |
Discontinued operations (note10) | (296) | (24\u00a0273) | (2\u00a0082) | (26\u00a0651) |
Transfer to/from inventory / reclassification | 1\u00a0581 | (6\u00a0367) | 868 | (3\u00a0918) |
Currency translation | (344) | 11\u00a0813 | 918 | 12\u00a0387 |
Cost at 31.12 | 52\u00a0701 | 556\u00a0880 | 20\u00a0390 | 629\u00a0971 |
Acc. depreciation and impairment losses at 1.1 | 27\u00a0314 | 364\u00a0715 | 16\u00a0410 | 408\u00a0438 |
Current year depreciation charge | 1\u00a0530 | 25\u00a0831 | 1\u00a0697 | 29\u00a0057 |
Current year impairment charge | 868 | 5\u00a0272 | 173 | 6\u00a0312 |
Depreciation disposals | (169) | (4\u00a0514) | (427) | (5\u00a0110) |
Discontinued operations (note10) | (271) | (19\u00a0493) | (1\u00a0737) | (21\u00a0501) |
Impairment disposals | - | (319) | (3) | (322) |
Depreciation transferred to inventory / reclassification | - | (1\u00a0138) | - | (1\u00a0138) |
Impairment transferred to inventory / reclassification | - | (346) | - | (346) |
Currency translation | 104 | 11\u00a0602 | 900 | 12\u00a0606 |
Acc. depreciation and impairment losses at 31.12 | 29\u00a0375 | 381\u00a0609 | 17\u00a0012 | 427\u00a0997 |
Carrying amount 31.12 | 23\u00a0326 | 175\u00a0271 | 3\u00a0378 | 201\u00a0975 |
Economic life | 0-40 years | 3-15 years | 3-12 years | |
Amortization method | Linear | Linear | Linear |
The lease revenues and commitments for Carton filling machines rented to customers as well as the lease expenses and commitments for equipment leased and used in our production are disclosed in Note14.
The company has not pledged property, plant and equipment as security for liabilities.
Property, plant and equipment specified by geographical area\u200c1
EUR 1\u00a0000 | 2023 | 2022 |
Canada | 23\u00a0778 | 28\u00a0485 |
Denmark | 24\u00a0708 | 25\u00a0940 |
Germany | 71\u00a0065 | 69\u00a0025 |
India | 10\u00a0593 | 9\u00a0944 |
Morocco | 7\u00a0492 | 6\u00a0508 |
Netherlands | 46\u00a0349 | 44\u00a0547 |
Norway | 3\u00a0779 | 3\u00a0097 |
Saudi Arabia | 2\u00a0982 | 3\u00a0555 |
Ukraine | 3 271 | 3\u00a0281 |
United Kingdom | 8 671 | 7\u00a0325 |
Other | 245 | 267 |
Total | 202\u00a0934 | 201\u00a0975 |
1The split by geographical area is based on the jurisdiction of legal owner.
Other off-balance sheet commitments and contingencies
EUR 1\u00a0000 | 2023 | 2022 |
Commitments for the acquisition of property, plant and equipment | 7 012 | 1 269 |
Accounting policy
Capitalized property, plant and equipment are reflected at cost less accumulated depreciation and accumu-lated impairment losses. Property, plant and equipment, other than land and properties under construction, are depreciated over their estimated useful lives, using the straight-line method and taking into consideration any residual values. See Note 1for impairment of non-financial assets accounting policy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f39133": { "value": "Other off-balance sheet commitments and contingencies
EUR 1\u00a0000 | 2023 | 2022 |
Commitments for the acquisition of property, plant and equipment | 7 012 | 1 269 |
Note 14 Leases
Accounting policy
The Group as a lessee
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases and leases of low value assets. For short-term leases and leases of low value assets, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components and instead account for any lease and associated non-lease components as a single arrangement. The Group has applied this practical expedient to all classes of right-of-use assets, except for rent of buildings.
The Group as a lessor
The group enters into lease agreements as a lessor with respect to filling machines placed with customers. These leases are classified as finance or operating leases. Whenever the terms of the lease transfer substan-tially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
See Note 1for impairment of non-financial assets accounting policy.
1. The Group as lessor - operating leases
The Group leases out filling machines under operating leases. Rental income was EUR 10\u00a0019 thousand in 2023, compared to EUR 9\u00a0326 thousand in 2022. Lease terms are between 1 year to 10 years. Options to extend the lease term or purchase the leased asset reflects market conditions at the time of exercising the option.
At the reporting date the Group has future minimum lease receivables as follows (undiscounted)
EUR 1\u00a0000 | 2023 | 2022 |
Due within year 1 | 9\u00a0578 | 11\u00a0242 |
Due within year 2 | 8\u00a0083 | 9\u00a0159 |
Due within year 3 | 6\u00a0329 | 7\u00a0863 |
Due within year 4 | 5\u00a0128 | 6\u00a0519 |
Due within year 5 | 4\u00a0195 | 4\u00a0509 |
Due after year 5 | 7\u00a0652 | 8\u00a0330 |
Total | 40\u00a0965 | 47\u00a0621 |
2. The Group as lessor - finance lease\t
The group leases out filling machines under finance leases. Generally, lease terms are between 5 years to 10 years. Options to extend or purchase the leased asset will normally reflect market pricing.
Amounts receivable under finance leases (undiscounted)
EUR 1\u00a0000 | 2023 | 2022 |
Due within year 1 | 2\u00a0150 | 2\u00a0648 |
Due within year 2 | 1\u00a0581 | 1\u00a0870 |
Due within year 3 | 1\u00a0493 | 1\u00a0302 |
Due within year 4 | 1\u00a0083 | 1\u00a0213 |
Due within year 5 | 769 | 804 |
Due after year 5 | 1\u00a0684 | 2\u00a0345 |
Total receivables under finance leases, undiscounted | 8\u00a0760 | 10\u00a0181 |
Unearned finance income | 1\u00a0676 | 2\u00a0162 |
Total receivables under finance leases, discounted | 7\u00a0084 | 8\u00a0020 |
There is no impairment loss allowance related to the finance lease receivables in 2023 and 2022. Credit risk related to the filling machine lease agreements is considered very low. Credit risk is considered insignificant due to right to require return of the machine in case of default. The average effective interest rate contracted is approximately 6.67% per annum.
The Group as lessee
The Group leases several assets including buildings, plants, cars and filling machines.
Right-of-use assets
December 31, 2023 | ||||
EUR 1\u00a0000 | Property and buildings | Machinery | Office and transport | Total |
Carrying amount 1.1 | 52\u00a0148 | 13\u00a0968 | 10\u00a0668 | 76\u00a0784 |
Additions and adjustments | 3\u00a0896 | 16\u00a0043 | 3\u00a0261 | 23\u00a0200 |
Disposals | (6) | (33) | (111) | (151) |
Current year depreciation charge | (4\u00a0442) | (5\u00a0177) | (3\u00a0844) | (13\u00a0463) |
Carrying amount at 31.12 | 51\u00a0596 | 24\u00a0800 | 9\u00a0974 | 86\u00a0370 |
December 31, 2022 | ||||
EUR 1\u00a0000 | Property and buildings | Machinery | Office and transport | Total |
Carrying amount 1.1 | 38\u00a0652 | 12\u00a0986 | 11\u00a0314 | 62\u00a0952 |
Additions and adjustments | 22\u00a0258 | 6\u00a0307 | 3\u00a0278 | 31\u00a0842 |
Disposals | (3\u00a0956) | (28) | (100) | (4\u00a0084) |
Current year depreciation charge | (4\u00a0806) | (5\u00a0288) | (3\u00a0823) | (13\u00a0918) |
Impairment losses | - | (8) | - | (8) |
Carrying amount at 31.12 | 52\u00a0148 | 13\u00a0968 | 10\u00a0668 | 76\u00a0784 |
The Group has no significant purchase options except from one purchase option related to the High Bay ware-house lease agreement commenced in November, 2022. This purchase option can be exercised in 2042 and purchase price is market value at exercise date. An exercise of the purchase option is not considered to be reason-ably certain, hence it is not recognised.
In 2023, expenses related to short-term leases were EUR 20 thousand, expenses related to low value assets were EUR 610 thousand and expenses related to variable payments not included in the measurement of lease liabilities were EUR 222 thousand.
The Group has signed contracts for Tethered Cap and other closure lines with a lease term of 5 years and a nominal value of EUR 20\u00a0839 thousand, which will commence at different stages during 2024.
Lease liabilities
EUR 1\u00a0000 | Note | 2023 | 2022 |
Current lease liabilities | 23\u00a0096 | 17\u00a0139 | |
Non-current lease liabilities | 78\u00a0424 | 73\u00a0536 | |
Total | 101\u00a0520 | 90\u00a0674 |
At the reporting date the Group has lease liabilities as follows (undiscounted)
EUR 1\u00a0000 | 2023 | 2022 |
Due within year 1 | 25\u00a0505 | 20\u00a0751 |
Due within year 2 | 18\u00a0597 | 20\u00a0449 |
Due within year 3 | 17\u00a0262 | 14\u00a0208 |
Due within year 4 | 14\u00a0637 | 12\u00a0282 |
Due within year 5 | 11\u00a0258 | 10\u00a0381 |
Due after year 5 | 70\u00a0132 | 75\u00a0623 |
Total | 157\u00a0390 | 153\u00a0694 |
Accounting policy
The Group as a lessee
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases and leases of low value assets. For short-term leases and leases of low value assets, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components and instead account for any lease and associated non-lease components as a single arrangement. The Group has applied this practical expedient to all classes of right-of-use assets, except for rent of buildings.
The Group as a lessor
The group enters into lease agreements as a lessor with respect to filling machines placed with customers. These leases are classified as finance or operating leases. Whenever the terms of the lease transfer substan-tially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
See Note 1for impairment of non-financial assets accounting policy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40597": { "value": "Note 15 Investment in joint ventures
Accounting policy
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control; that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.
The results and assets and liabilities of a joint venture company are incorporated in these financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the equity investee. The statement of comprehensive income reflects the share of the results of operations of the associate (net after tax). Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the joint venture company recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. After application of the equity method the Group determines whether it is necessary to recognise an additional impairment on the individual investments. The Group determines if there are indications of impairment, and if this is the case, the Group calculates the impairment loss as the difference between the recoverable amount of the joint venture and its carrying value.
The investment in the joint ventures specified below have been accounted for in accordance with the equity method of accounting. Lala Elopak S.A. de C.V. is a carton production plant in Mexico selling cartons to Americas. Impresora Del Yaque is a carton production facility in the Dominican Republic also selling cartons to Americas. Elopak Nampak Africa Limited is a sales centre in Kenya, established in 2020, selling cartons to Africa. The investments are joint ventures because the investment partners have the same rights and control in the companies.
Investments in joint ventures
2023 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak NampakAfrica Ltd | Total |
Ownership - and voting share | 49% | 51% | 50% | |
Carrying amount 1.1 | 24\u00a0210 | 10\u00a0707 | (244) | 34\u00a0673 |
Income from joint venture companies | 4\u00a0730 | 2\u00a0139 | (14) | 6\u00a0855 |
Dividend received | (4\u00a0004) | (1\u00a0907) | - | (5\u00a0911) |
Recognized to equity | (6) | - | - | (6) |
Currency translation | 2\u00a0874 | (777) | - | 2\u00a0097 |
Carrying amount 31.12 | 27\u00a0805 | 10\u00a0163 | (258) | 37\u00a0709 |
2022 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak NampakAfrica Ltd | Total |
Ownership - and voting share | 49% | 51% | 50% | |
Carrying amount 1.1 | 19\u00a0390 | 8\u00a0270 | (133) | 27\u00a0527 |
Income from joint venture companies | 2\u00a0665 | 1\u00a0824 | (112) | 4\u00a0378 |
Recognized to equity | (14) | - | - | (14) |
Currency translation | 2\u00a0169 | 613 | - | 2\u00a0783 |
Carrying amount 31.12 | 24\u00a0210 | 10\u00a0707 | (244) | 34\u00a0673 |
Summarized financial information
2023 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak Nampak Africa Ltd | Total |
Revenue | 95\u00a0362 | 24\u00a0703 | 21 | 120\u00a0086 |
Operating profit | 13\u00a0281 | 4\u00a0267 | (29) | 17\u00a0519 |
Profit after tax (loss) | 9\u00a0653 | 4\u00a0195 | (28) | 13\u00a0820 |
Other comprehensive income that may be reclassified to net income | 5\u00a0866 | (1\u00a0523) | - | 4\u00a0342 |
Total comprehensive income | 15\u00a0518 | 2\u00a0672 | (28) | 18\u00a0163 |
Current assets | 52\u00a0932 | 18\u00a0786 | 125 | 71\u00a0842 |
Non-current assets | 16\u00a0255 | 3\u00a0053 | 1 | 19\u00a0309 |
Current liabilities | 16\u00a0234 | 1\u00a0911 | 75 | 18\u00a0221 |
Non-current liabilities | 2\u00a0969 | - | 567 | 3\u00a0536 |
Equity | 49\u00a0984 | 19\u00a0928 | (517) | 69\u00a0395 |
Group's share of profit after tax (loss) | 4\u00a0730 | 2\u00a0139 | (14) | 6\u00a0855 |
2022 | ||||
EUR 1\u00a0000 | Lala ElopakS.A. de C.V. | ImpresoraDel Yaque | Elopak Nampak Africa Ltd | Total |
Revenue | 78\u00a0865 | 25\u00a0471 | 63 | 104\u00a0400 |
Operating profit | 7\u00a0431 | 4\u00a0361 | (208) | 11\u00a0584 |
Profit after tax (loss) | 5\u00a0440 | 3\u00a0577 | (224) | 8\u00a0794 |
Other comprehensive income that may be reclassified to net income | 4\u00a0427 | 1\u00a0202 | - | 5\u00a0630 |
Total comprehensive income | 9\u00a0867 | 4\u00a0780 | (224) | 14\u00a0423 |
Current assets | 40\u00a0181 | 21\u00a0572 | 188 | 61\u00a0940 |
Non-current assets | 15\u00a0476 | 3\u00a0459 | 1 | 18\u00a0936 |
Current liabilities | 10\u00a0495 | 3\u00a0208 | 171 | 13\u00a0874 |
Non-current liabilities | 2\u00a0499 | - | 507 | 3\u00a0006 |
Equity | 42\u00a0663 | 21\u00a0823 | (489) | 63\u00a0997 |
Group's share of profit after tax (loss) | 2\u00a0665 | 1\u00a0824 | (112) | 4\u00a0378 |
Voting share
Ownership/voting share | 2023 | 2022 |
Lala Elopak S.A. de C.V. | 49% | 49% |
Impresora Del Yaque | 51% | 51% |
Elopak Nampak Africa Limited | 50% | 50% |
Accounting policy
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control; that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.
The results and assets and liabilities of a joint venture company are incorporated in these financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the equity investee. The statement of comprehensive income reflects the share of the results of operations of the associate (net after tax). Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the joint venture company recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. After application of the equity method the Group determines whether it is necessary to recognise an additional impairment on the individual investments. The Group determines if there are indications of impairment, and if this is the case, the Group calculates the impairment loss as the difference between the recoverable amount of the joint venture and its carrying value.
The investment in the joint ventures specified below have been accounted for in accordance with the equity method of accounting. Lala Elopak S.A. de C.V. is a carton production plant in Mexico selling cartons to Americas. Impresora Del Yaque is a carton production facility in the Dominican Republic also selling cartons to Americas. Elopak Nampak Africa Limited is a sales centre in Kenya, established in 2020, selling cartons to Africa. The investments are joint ventures because the investment partners have the same rights and control in the companies.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f41874": { "value": "Note 16 Other non-current assets
EUR 1\u00a0000 | 2023 | 2022 |
Contract assets | 3\u00a0311 | 3\u00a0775 |
Non-current finance lease receivables (Note14) | 5\u00a0113 | 5\u00a0865 |
Financial instruments (Note25) | 3\u00a0521 | 6\u00a0811 |
Other non-current assets | 2\u00a0948 | 3\u00a0390 |
Carrying amount 31.12 | 14\u00a0892 | 19\u00a0841 |
Note 17 Impairment Ukraine
Due to the war in Ukraine, Elopak suspended all activities in Russia, and restarted operations in Ukraine after a temporary close-down, in March 2022. Consequently, the Group has tested assets in Ukraine for impairment and recognized an impairment loss through the statement of comprehensive income. Ukraine is included in the oper-ating segment EMEA.
The impairment loss is calculated using a weighted average of possible scenarios including continuing operations and closing operations.
The Russian operation is classified as discontinued operations and all assets and liabilities related to the Russian operation were deconsolidated from the Elopak consolidated financial statements due to loss of control on July 15, 2022. See note 10Discontinued operations.
Due to the circumstances in Ukraine the impairment assessment has been updated at the end of each quarter. No\u00a0deferred tax asset is recognized related to the operations in Ukraine. After impairment, the recoverable amount of property, plant and equipment is EUR 2\u00a0984 thousand, while all other non-current assets are written down to recoverable amount of zero.
Balance sheet effect of impairment
EUR 1\u00a0000 | December 31 2023 | December 31 2022 |
ASSETS | ||
Non-current assets | ||
Development cost and other intangible assets | (17) | (26) |
Deferred tax assets | - | (1\u00a0555) |
Property, plant and equipment | (266) | (4\u00a0155) |
Right-of-use assets | - | (8) |
Other non-current assets | - | - |
Total non-current assets | (284) | (5\u00a0744) |
Current assets | ||
Inventory | 451 | (1\u00a0883) |
Trade receivables | 8 | (32) |
Other current assets | 4 | (230) |
Total current assets | 464 | (2\u00a0145) |
Total assets | 180 | (7\u00a0889) |
EUR 1\u00a0000 | 2023 | 2022 |
COMPREHENSIVE INCOME | ||
Cost of materials | 451 | (2\u00a0079) |
Depreciation, amortization and impairment | (284) | (4\u00a0189) |
Other operating expenses | 12 | (67) |
Operating profit | 180 | (6\u00a0335) |
Financial items | - | - |
Income tax | - | (1\u00a0554) |
Profit/loss | 180 | (7\u00a0889) |
Note 18 Inventory
Accounting policy
Cost is calculated using the FIFO cost formula for cartons, filling machines and spare parts.
Inventory
2023 | ||||
EUR 1\u00a0000 | Raw materials | Work in progress | Finished goods | Total |
Cost 31.12 | 27\u00a0621 | 93\u00a0456 | 82\u00a0424 | 203\u00a0502 |
Write down 01.01 | 3\u00a0755 | 19 | 7\u00a0100 | 10\u00a0874 |
Realised | (291) | - | (424) | (715) |
Write down | 93 | - | 1\u00a0060 | 1\u00a0153 |
Write down per 31.12. | 3\u00a0558 | 19 | 7\u00a0736 | 11\u00a0313 |
Carrying amount 31.12 | 24\u00a0063 | 93\u00a0437 | 74\u00a0688 | 192\u00a0188 |
2022 | ||||
EUR 1\u00a0000 | Raw materials | Work in progress | Finished goods | Total |
Cost 31.12 | 34\u00a0579 | 84\u00a0954 | 78\u00a0549 | 198\u00a0082 |
Write down 01.01 | (307) | - | 5\u00a0142 | 4\u00a0835 |
Realised | 308 | - | (615) | (308) |
Write down | 3\u00a0754 | 19 | 2\u00a0573 | 6\u00a0347 |
Write down per 31.12. | 3\u00a0755 | 19 | 7\u00a0100 | 10\u00a0874 |
Carrying amount 31.12 | 30\u00a0824 | 84\u00a0934 | 71\u00a0449 | 187\u00a0208 |
Accounting policy
Cost is calculated using the FIFO cost formula for cartons, filling machines and spare parts.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f42802": { "value": "Note 19 Trade receivables and other current assets
Accounting policy
Trade and other receivables that are held to collect contractual cash flows only and the contractual cash flows are solely principal and interest are measured at amortised cost using the effective interest method, less any impairment. Short-term receivables are measured at nominal values reduced by appropriate allow-ances for expected credit losses.
Accounts receivables which are subject to non-recourse factoring are classified as instruments held to collect contractual cash flows and for sale and are measured at fair value through other comprehensive income until they are derecognised.
See Note 1for non-derivative financial instruments accounting policy.
Impairment of financial assets
The loss allowance for expected credit losses is mostly related to individual assessments and is recognised for financial asset measured at amortised cost or fair value through OCI, contract assets under IFRS 15, lease receivables under IFRS 16 and certain written loan commitments and financial guarantee contracts. Loss allowance is assessed at each reporting day. Loss allowances for trade receivables, contract assets and lease receivables that do not contain a significant financing component are measured at an amount equal to lifetime expected credit losses. Loss allowances for trade receivables, contract assets and lease receivables that do contain a significant financing component are measured at an amount equal to the lifetime expected credit losses including interest revenues. When there is no objective evidence of impairment, interest reve-nues are calculated based on gross carrying amount, otherwise interests are calculated based on the net carrying amount. The amount of the loss is recognised in profit or loss. In case of changes to expected credit losses in a subsequent period, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date. Any subsequent reversal of an impairment loss is recognised in profit or loss.
Trade receivables
EUR 1\u00a0000 | 2023 | 2022 |
Accounts receivable, gross | 115\u00a0000 | 106\u00a0243 |
Allowances | (4\u00a0758) | (4\u00a0045) |
Carrying amount 31.12 | 110\u00a0243 | 102\u00a0197 |
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
2023 | |||
EUR 1\u00a0000 | Gross carrying amount | Loss rate | Expectedcredit loss |
Current | 96\u00a0131 | 3.3% | 3\u00a0218 |
Up to 7 days | 7\u00a0863 | - | - |
Up to 30 days | 4\u00a0292 | 0.3% | 13 |
30-60 days | 2\u00a0228 | 0.3% | 6 |
60-90 days | 1\u00a0102 | 0.1% | 1 |
Over 90 days | 3\u00a0383 | 44.9% | 1\u00a0519 |
Total | 115\u00a0000 | 4.1% | 4\u00a0758 |
2022 | |||
EUR 1\u00a0000 | Gross carrying amount | Loss rate | Expectedcredit loss |
Current | 84\u00a0354 | 2.9% | 2\u00a0443 |
Up to 7 days | 8\u00a0422 | - | - |
Up to 30 days | 3\u00a0677 | 0.3% | 11 |
30-60 days | 2\u00a0558 | 6.6% | 169 |
60-90 days | 1\u00a0416 | 2.0% | 29 |
Over 90 days | 5\u00a0815 | 24.0% | 1\u00a0395 |
Total | 106\u00a0243 | 3.8% | 4\u00a0045 |
Movement in the allowance for expected credit losses of trade receivables
EUR 1\u00a0000 | 2023 | 2022 |
As at 1.1 | 4\u00a0045 | 4\u00a0231 |
Business combinations (note27) | - | 802 |
Change in provision for expected credit losses | 473 | (721) |
Change in write-off | (98) | (16) |
Foreign exchange movement | 337 | (251) |
Carrying amount 31.12 | 4\u00a0757 | 4\u00a0045 |
Other current assets
EUR 1\u00a0000 | 2023 | 2022 |
Project income earned, not invoiced | 44\u00a0643 | 39\u00a0195 |
Prepaid support | 1\u00a0832 | 2\u00a0129 |
Contract assets | 46\u00a0475 | 41\u00a0324 |
Prepayments and accrued expenses | 20\u00a0519 | 14\u00a0476 |
V.A.T. receivable | 20\u00a0820 | 24\u00a0639 |
Accrued income tax receivables | 6\u00a0238 | 5\u00a0382 |
Financial instruments | 1\u00a0064 | 999 |
Finance leasing receivable short term | 1\u00a0971 | 2\u00a0362 |
Current investments of shares | - | 4\u00a0829 |
Other current receivables | 16\u00a0632 | 15\u00a0202 |
Carrying amount 31.12\u200c1 | 113\u00a0720 | 109\u00a0214 |
1Contract assets consist of prepaid rebates to customers which will be offset against contracted future sales of cartons and closures. Total of prepaid support was EUR 5\u00a0143 thousand in 2023 and EUR 5\u00a0904 thousand in 2022. Based on customer knowledge and experience of very few losses, the credit risk related to prepaid support is considered insignificant.
Accounting policy
Trade and other receivables that are held to collect contractual cash flows only and the contractual cash flows are solely principal and interest are measured at amortised cost using the effective interest method, less any impairment. Short-term receivables are measured at nominal values reduced by appropriate allow-ances for expected credit losses.
Accounts receivables which are subject to non-recourse factoring are classified as instruments held to collect contractual cash flows and for sale and are measured at fair value through other comprehensive income until they are derecognised.
See Note 1for non-derivative financial instruments accounting policy.
Impairment of financial assets
The loss allowance for expected credit losses is mostly related to individual assessments and is recognised for financial asset measured at amortised cost or fair value through OCI, contract assets under IFRS 15, lease receivables under IFRS 16 and certain written loan commitments and financial guarantee contracts. Loss allowance is assessed at each reporting day. Loss allowances for trade receivables, contract assets and lease receivables that do not contain a significant financing component are measured at an amount equal to lifetime expected credit losses. Loss allowances for trade receivables, contract assets and lease receivables that do contain a significant financing component are measured at an amount equal to the lifetime expected credit losses including interest revenues. When there is no objective evidence of impairment, interest reve-nues are calculated based on gross carrying amount, otherwise interests are calculated based on the net carrying amount. The amount of the loss is recognised in profit or loss. In case of changes to expected credit losses in a subsequent period, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date. Any subsequent reversal of an impairment loss is recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f42919": { "value": "Impairment of financial assets
The loss allowance for expected credit losses is mostly related to individual assessments and is recognised for financial asset measured at amortised cost or fair value through OCI, contract assets under IFRS 15, lease receivables under IFRS 16 and certain written loan commitments and financial guarantee contracts. Loss allowance is assessed at each reporting day. Loss allowances for trade receivables, contract assets and lease receivables that do not contain a significant financing component are measured at an amount equal to lifetime expected credit losses. Loss allowances for trade receivables, contract assets and lease receivables that do contain a significant financing component are measured at an amount equal to the lifetime expected credit losses including interest revenues. When there is no objective evidence of impairment, interest reve-nues are calculated based on gross carrying amount, otherwise interests are calculated based on the net carrying amount. The amount of the loss is recognised in profit or loss. In case of changes to expected credit losses in a subsequent period, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date. Any subsequent reversal of an impairment loss is recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f43862": { "value": "Note 20 Equity and shareholders information
Elopak ASA was established with share capital of NOK 376\u00a0906\u00a0620 (EUR 50\u00a0155\u00a0321) and the total number of shares outstanding for Elopak ASA is 269\u00a0219\u00a0014, each with a face value of NOK 1.4 (EUR 0.19). At December 31, 2023, the company has a share capital of NOK 376\u00a0532\u00a0338 (EUR 50\u00a0104\u00a0463) and the total number of shares outstanding for Elopak ASA is 268\u00a0951\u00a0670, each with a face value of NOK 1.4 (EUR 0.19).
Treasury shares / Share-based bonus
Elopak ASA\u2019s ordinary general meeting on May 11, 2023 approved a share buy-back program for the repurchase of up to NOK 37\u00a0690\u00a0662, meaning up to 26.9 million shares at nominal value of NOK 1.40/share. The shares acquired under the share buy-back program will be used to meet the Company\u2019s obligations towards employees who participate in the Company\u2019s long-term incentive plan. As of December 31, 2023, the balance of treasury shares is 267\u00a0344. The treasury share capital is EUR 51 thousand and the treasury share premium is EUR 545 thousand.
Dividend
The Board approved a dividend of NOK 0.86 per share for the financial year 2022 on May 12, 2023. The dividend payment was EUR 19\u00a0634 thousand based on 269\u00a0219\u00a0014 outstanding shares, of which EUR 11\u00a0747 thousand was paid to Ferd AS. The Board of Directors will propose to the Annual General Meeting a dividend of NOK 1.46 per share for 2023.
Share capital
2023 | |||
Number of shares | Ordinaryshares issued | Treasuryshares | Ordinary shares outstanding |
Shares at 1.1 | 269\u00a0219\u00a0014 | (5\u00a0519) | 269\u00a0213\u00a0495 |
Treasury shares purchased | - | (410\u00a0540) | (410\u00a0540) |
Treasury shares re-issued | - | 148\u00a0715 | 148\u00a0715 |
Shares at 31.12 | 269\u00a0219\u00a0014 | (267\u00a0344) | 268\u00a0951\u00a0670 |
2022 | |||
Number of shares | Ordinaryshares issued | Treasuryshares | Ordinary shares outstanding |
Shares at 1.1 | 269\u00a0219\u00a0014 | - | 269\u00a0219\u00a0014 |
Treasury shares purchased | - | (170\u00a0000) | (170\u00a0000) |
Treasury shares re-issued | - | 164\u00a0481 | 164\u00a0481 |
Shares at 31.12 | 269\u00a0219\u00a0014 | (5\u00a0519) | 269\u00a0213\u00a0495 |
Basic and diluted earnings per share
(EUR 1\u00a0000, except number of shares) | 2023 | 2022 |
Profit attributable to Elopak shareholders | 67\u00a0061 | 10\u00a0856 |
Issued ordinary shares at beginning of period, adjusted for share split in the period | 269\u00a0213\u00a0495 | 269\u00a0219\u00a0014 |
Effect of shares issued | (62\u00a0416) | (3\u00a0024) |
Weighted-average number of ordinary shares in the period | 269\u00a0151\u00a0079 | 269\u00a0215\u00a0990 |
Basic and diluted earnings per share attributable to Elopak shareholders (in EUR) | 0.25 | 0.04 |
The Group's top 20 shareholders
Shareholder's name | Total shareholding |
Ferd AS\u200c1 | 60.04% |
Nippon Paper Industries Co., Ltd. | 5.00% |
Pareto Asset Management AS | 4.24% |
Boldhaven | 3.46% |
Folketrygdfondet | 3.29% |
Fidelity International | 2.82% |
Artemis Investment Management LLP | 2.19% |
Pictet Asset Management Ltd. | 1.14% |
Oddo BHF Asset Management S.A.S. | 1.08% |
Arctic Fund Management AS | 0.93% |
DNB Asset Management AS | 0.91% |
Allspring Global Investments LLC | 0.82% |
Skagen AS | 0.79% |
Ind\u00e9pendance et Expansion AM S.A | 0.66% |
GW&K Investment Management, LLC | 0.63% |
UBS Asset Management (Switzerland) | 0.58% |
T D Veen AS | 0.43% |
Clearstream Banking SA | 0.41% |
MFS Investment Management | 0.40% |
Wenaasgruppen AS | 0.38% |
1Elopak ASA is a subsidiary of Ferd AS and is consolidated within their consolidated financial statements which can be found on their website.
The Executive team own directly, or indirectly the following number of shares in the Group
Executive team | Total number of shares |
Thomas K\u00f6rmendi, CEO | 396 105 |
Bent Axelsen, CFO | 203 833 |
Patrick Verhelst, Chief Marketing Officer | 61 562 |
Wolfgang Buckhremer, Chief Technology Officer | 78 638 |
Ivar Jevne, EVP Packaging and Procurement | 239 432 |
Stephen Naumann, EVP Region Europe North, India and CIS | 190 055 |
Finn T\u00f8rjesen, EVP Region Europe South and MENA | 79 816 |
Lionel Ettedgui, EVP Region Americas | 95 553 |
Nete Bechmann, Chief Human Resource Officer | 35\u00a0447 |
Dag Gr\u00f6nevik, EVP Equipment and Service | 9\u00a0660 |
Total | 1 390 101 |
Dividend
The Board approved a dividend of NOK 0.86 per share for the financial year 2022 on May 12, 2023. The dividend payment was EUR 19\u00a0634 thousand based on 269\u00a0219\u00a0014 outstanding shares, of which EUR 11\u00a0747 thousand was paid to Ferd AS. The Board of Directors will propose to the Annual General Meeting a dividend of NOK 1.46 per share for 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f44052": { "value": "0.86", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f44102": { "value": "1.46", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f44285": { "value": "Basic and diluted earnings per share
(EUR 1\u00a0000, except number of shares) | 2023 | 2022 |
Profit attributable to Elopak shareholders | 67\u00a0061 | 10\u00a0856 |
Issued ordinary shares at beginning of period, adjusted for share split in the period | 269\u00a0213\u00a0495 | 269\u00a0219\u00a0014 |
Effect of shares issued | (62\u00a0416) | (3\u00a0024) |
Weighted-average number of ordinary shares in the period | 269\u00a0151\u00a0079 | 269\u00a0215\u00a0990 |
Basic and diluted earnings per share attributable to Elopak shareholders (in EUR) | 0.25 | 0.04 |
Note 22 Interest-bearing loans and borrowings
Accounting policy
See Note 1for non-derivative financial instruments accounting policy.
Interest-bearing loans and borrowings
2023 | 2022 | |||
EUR 1\u00a0000 | Available | Utilised | Available | Utilised |
Current liabilities to financial institutions | 56\u00a0857 | 19\u00a0333 | 57\u00a0073 | 21\u00a0682 |
Non-current liabilities to financial institutions | 400\u00a0000 | 224\u00a0433 | 400\u00a0000 | 304\u00a0033 |
Total | 243\u00a0767 | 325\u00a0715 |
Repayment profile
EUR 1\u00a0000 | 2023 | 2022 |
2023 | - | 21 682 |
2024 | 19 333 | - |
2025 | 225 000 | 305 000 |
2026 | - | - |
Total | 244 333 | 326 682 |
Weighted average interest rates on long-term loans
2023 | 2022 | ||||
EUR 1\u00a0000 | Rate | In Ccy | In EUR | In Ccy | In EUR |
EUR | 4.11% | 225\u00a0000 | 225\u00a0000 | 305\u00a0000 | 305\u00a0000 |
Total | 225\u00a0000 | 305\u00a0000 |
The values above are gross amounts excluding amortised borrowing costs.
The long-term loans are drawn under a EUR 400 000 thousand multi currency revolving credit facility. The facility is available until May 2025. Elopak has started a process to refinancing the long-term loan financing and will aim to have concluded the refinancing in the first half of 2024. Amounts are shown net of prepaid transaction costs. Changes to the Groups debt profile reflect changes in the functional currency of entities within the Group.
Elopak has a Supply Chain Financing programme towards the largest suppliers to take advantage of supplier cash discounts and optimize working capital.
Accounts receivables factoring facilities
EUR 1\u00a0000 | Available | 2023 | Available | 2022 |
Non-recourse | 180\u00a0141 | 45\u00a0010 | 179\u00a0275 | 41\u00a0823 |
Total | 45\u00a0010 | 41\u00a0823 |
Elopak factors its receivables in the ordinary course of business.
Contractual maturities of financial liabilities, including estimated interest payments
Non-derivatives financial liabilities
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 243\u00a0767 | 19\u00a0333 | 224\u00a0433 | - | - | 243\u00a0767 |
Accounts payable | 127\u00a0847 | 127\u00a0847 | - | - | - | 127\u00a0847 |
Other liabilities | 162\u00a0765 | 113\u00a0111 | 16\u00a0851 | 12\u00a0969 | 19\u00a0834 | 162\u00a0765 |
Total | 534\u00a0379 | 260\u00a0291 | 241\u00a0285 | 12\u00a0969 | 19\u00a0834 | 534\u00a0379 |
Derivatives financial instruments
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 7\u00a0398 | 5\u00a0823 | 1\u00a0575 | - | - | 7\u00a0398 |
Interest rate swaps | 2\u00a0105 | - | - | 1\u00a0318 | 787 | 2\u00a0105 |
Commodities | 2\u00a0408 | 2\u00a0408 | - | - | - | 2\u00a0408 |
Total | 11\u00a0911 | 8\u00a0231 | 1\u00a0575 | 1\u00a0318 | 787 | 11\u00a0911 |
Non-derivatives financial liabilities
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 325\u00a0715 | 32 760 | 319 451 | - | - | 325\u00a0715 |
Accounts payable | 124\u00a0038 | 124\u00a0038 | - | - | - | 124\u00a0038 |
Other liabilities | 165\u00a0105 | 78\u00a0108 | 28\u00a0708 | 18\u00a0847 | 39\u00a0442 | 165\u00a0105 |
Total | 614\u00a0859 | 234 906 | 348 159 | 18\u00a0847 | 39\u00a0442 | 614\u00a0859 |
Derivatives financial instruments
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 1\u00a0280 | 951 | 330 | - | - | 1\u00a0280 |
Commodities | 3\u00a0318 | 3\u00a0318 | - | - | - | 3\u00a0318 |
Total | 4\u00a0598 | 4\u00a0269 | 330 | - | - | 4\u00a0598 |
The fair value of all financial assets and liabilities approximates their carrying value. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unadjusted quoted prices for identical assets and liabilities
Carrying amount of financial asset and liabilities
December 31, 2023 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 3 660 | 925 | - | 4\u00a0585 | - | 4\u00a0585 | - | 4\u00a0585 | |
Finance lease receivable | - | - | 7\u00a0084 | 7\u00a0084 | - | - | - | - | |
Trade receivables | - | - | 110\u00a0243 | 110\u00a0243 | - | - | - | - | |
Other current assets | - | - | 116\u00a0944 | 116\u00a0944 | - | - | - | - | |
Cash and cash equivalents | - | - | 13\u00a0308 | 13\u00a0308 | - | - | - | - | |
Total | 3 660 | 925 | 247\u00a0579 | 252\u00a0164 | - | 4\u00a0585 | - | 4\u00a0585 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 243\u00a0767 | 243\u00a0767 | - | - | - | - | |
Derivatives | 5 451 | ||||||||
6 460 | |||||||||
- | 11\u00a0911 | - | 11\u00a0911 | - | 11\u00a0911 | ||||
Trade payables, and other payables | - | - | 266\u00a0576 | 266\u00a0576 | - | - | - | - | |
Total | 5 451 | 6 460 | 510\u00a0343 | 522\u00a0253 | - | 11\u00a0911 | - | 11\u00a0911 |
Carrying amount of financial asset and liabilities
December 31, 2022 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 7 121 | 689 | - | 7\u00a0810 | - | 7\u00a0810 | - | 7\u00a0810 | |
Finance lease receivable | - | - | 8\u00a0227 | 8\u00a0227 | - | - | - | - | |
Trade receivables | - | - | 102\u00a0197 | 102\u00a0197 | - | - | - | - | |
Other current assets | - | - | 113\u00a0018 | 113\u00a0018 | - | - | - | - | |
Cash and cash equivalents | - | - | 25\u00a0883 | 25\u00a0883 | - | - | - | - | |
Total | 7 121 | 689 | 249\u00a0325 | 257\u00a0135 | - | 7\u00a0810 | - | 7\u00a0810 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 325\u00a0715 | 325\u00a0715 | - | - | - | - | |
Derivatives | 550 | 4 048 | - | 4\u00a0598 | - | 4\u00a0598 | - | 4\u00a0598 | |
Trade payables, and other payables | - | - | 245\u00a0417 | 245\u00a0417 | - | - | - | - | |
Total | 550 | 4 048 | 571\u00a0132 | 575\u00a0731 | - | 4\u00a0598 | - | 4\u00a0598 |
Fair value of financial assets and financial liabilities are measured using different levels of input.
\u2022Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
\u2022Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
\u2022Level 3 inputs are unobservable inputs for the asset or liability.
Accounting policy
See Note 1for non-derivative financial instruments accounting policy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f45643": { "value": "Note 23 Other current liabilities
EUR 1\u00a0000 | 2023 | 2022 |
Provisions | 3\u00a0343 | 681 |
Accrued expenses | 70\u00a0330 | 70\u00a0547 |
Derivatives (Note25) | 8\u00a0231 | 4\u00a0268 |
Prepaid from customers | 38\u00a0636 | 25\u00a0932 |
Total | 120\u00a0540 | 101\u00a0429 |
Note 24 Capital management
Elopak\u2019s level of capital and how this is managed relates closely to the company\u2019s risk profile and the company\u2019s ability to withstand turbulent times. The main objectives when Elopak assess their capital management is to mini-mize financing costs, while maintaining adequate liquidity and flexibility for short-term liquidity needs and M&A activities. The policy is to maintain unutilised and available liquidity of 40% of utilised debt. Elopak\u2019s financial guiding is to pay out dividends equal to 50% - 60% of adjusted net profits.
All financing activities are managed by the central Treasury at the parent company level. The capital needs of Elopak subsidiaries are mainly covered by granting internal loans or by equity injection where applicable. The short-term liquidity needs of Elopak group companies are managed at group level through the Elopak internal bank and cash-pooling. The financial guiding also targets constantly that the company reduces its gearing ratio and to be ~2.0x EBITDA on a mid-term basis.
The financial covenants under Elopak\u2019s Revolving Credit Facility are limited to a maximum gearing ratio (Net Interest Bearing Debit/EBITDA) of 4.75 and to hold a minimum equity of EUR 100 million at all times.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f45967": { "value": "Note 25 Financial risk management
Accounting policy
The Group enters into derivative financial instruments to manage its exposure to interest rate, foreign exchange rate and raw material risk arising from operational, financing and investment activities. In accord-ance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship. The Group designates certain derivatives as either hedge of the fair value of recognised assets or liabilities or firm commitments (fair value hedges), or hedge of highly probable forecast transactions or hedge of foreign currency risk of firm commitments (cash flow hedges).
At inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.
Balance sheet management
The Group manages the balance sheet to ensure a healthy financial position and liquidity. This is done through an annual budgeting process followed by performance management and forecasting updates to ensure adequate financial flexibility and liquidity for the company. The Group\u2019s main bank covenants, especially the net interest bearing debt/ EBITDA, are monitored closely on a continuous basis to ensure compliance at all times.
Financial risk policy
The Group is exposed to market risk, credit risk and liquidity risk. Risk management activities are governed by appropriate policies and procedures. Risks are identified, measured and managed in accordance with the Group's policies and risk objectives. It is the Group's policy that no trading in derivatives for speculative purposes shall be undertaken. There have been no significant changes in the management of risks related to financials during the period.
Categories of financial risk to operational business
1. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency risk, commodity price risk and interest rate risk. Elopak buys derivatives to manage market risks and seeks to apply hedge accounting to manage volatility in profit or loss. Hedge accounting is applied to all currency and commodity derivatives, while interest rate derivatives are not subject to hedge accounting.
Derivatives
December 31, 2023 | December 31, 2022 | |||||
EUR 1\u00a0000 | Assets | Liabilities | Total | Assets | Liabilities | Total |
Currency derivatives | 904 | 7\u00a0398 | (6\u00a0494) | 747 | 1\u00a0280 | (534) |
Commodity derivatives | 31 | 2\u00a0408 | (2\u00a0377) | - | 3\u00a0318 | (3\u00a0318) |
Interest derivatives | 3\u00a0650 | 2\u00a0105 | 1\u00a0545 | 7\u00a0063 | - | 7\u00a0063 |
Total | 4\u00a0585 | 11\u00a0911 | (7\u00a0326) | 7\u00a0810 | 4\u00a0598 | 3\u00a0212 |
The full fair value of a derivative is classified as \"Other non-current assets or \"Other non-current liabilities\" if the remaining maturity of the derivative is more than 12 months and as \"Other current assets\" or \"Other current liabilities\", if the maturity of the derivative is less than 12 months. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unad-justed quoted prices for identical assets and liabilities, with changes in fair value are therefore recognized in the income statement. No other material financial assets or liabilities are measured at fair value through profit or loss.
Where eligible, derivatives used for hedging are designated in cash flow hedge accounting relationships.
Currency risk
Elopak's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activi-ties, financing of foreign operations and the Group's net investments in foreign subsidiaries.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
Assets | Liabilities | |||
Currency | 2023 | 2022 | 2023 | 2022 |
BGN | 241 | 222 | 246 | 238 |
CAD | 96\u00a0376 | 22\u00a0928 | 64\u00a0044 | 95\u00a0182 |
CHF | 4\u00a0800 | 4\u00a0337 | 4\u00a0771 | 4\u00a0252 |
CZK | 62\u00a0929 | 57\u00a0588 | 62\u00a0821 | 68\u00a0479 |
DKK | 2\u00a0809\u00a0965 | 2\u00a0494\u00a0348 | 2\u00a0889\u00a0442 | 2\u00a0403\u00a0598 |
DZD | - | - | - | 4\u00a0577 |
EUR | 86\u00a0393 | 4\u00a0910 | 750\u00a0783 | 3\u00a0910 |
GBP | 32\u00a0760 | 26\u00a0313 | 32\u00a0821 | 27\u00a0076 |
HUF | 863\u00a0797 | 638\u00a0998 | 449\u00a0243 | 603\u00a0176 |
NIS | - | 8 | 9 | - |
JPY | 2\u00a0814\u00a0818 | 4\u00a0091\u00a0538 | 6\u00a0493\u00a0463 | 2\u00a0077\u00a0533 |
MXN | 66\u00a0521 | 65\u00a0240 | 62\u00a0304 | 65\u00a0645 |
NOK | 2\u00a0537\u00a0714 | 2\u00a0093\u00a0232 | 2\u00a0548\u00a0400 | 2\u00a0089\u00a0246 |
PLN | 79\u00a0545 | 47\u00a0729 | 78\u00a0552 | 51\u00a0036 |
RUR | 1\u00a0889\u00a0323 | 1\u00a0344\u00a0703 | 1\u00a0888\u00a0924 | 1\u00a0344\u00a0978 |
SAR | - | - | - | 3\u00a0274 |
SEK | 260\u00a0590 | 193\u00a0612 | 274\u00a0466 | 194\u00a0541 |
TND | - | - | - | 57 |
UAH | - | - | - | - |
USD | 63\u00a0043 | 86\u00a0368 | 83\u00a0515 | 51\u00a0649 |
Foreign exchange risk from operating activities such as salaries and personnel tax are managed by hedging trans-actions that are highly probable to occur within periods out 18 months by entering foreign currency contracts.
The Group employs a layering policy in which the nearest calendar quarter is hedged up to 90% with coverage decreasing in steps to 15% at 18 months out.
Currency exposures related to purchase of filling machines are hedged at a one-to-one basis (100% coverage at the specified date of payment).
Hedge accounting is applied to all currency derivatives, except for cross-currency interest rate swaps which are recognised as financial income or financial expense in profit or loss. Hedge accounting is designated at the date of recognition of the hedged item, however the derivatives are due at the date of expected payment. At designation, the fair value of the hedging derivatives is recycled from Hedge reserve in equity to the hedged item (i.e. filling machine recognised in inventory) and to profit or loss to the same accounting line and at the same time as the hedged item is recognised to profit or loss.
Outstanding derivatives
Nominal amount
EUR 1\u00a0000 | December 31, 2023 | December 31, 2022 | ||
Currency | Ccy | EUR | Ccy | EUR |
CAD | 7\u00a0749 | 5\u00a0292 | - | - |
EUR | (89\u00a0952) | (89\u00a0952) | (72\u00a0633) | (72\u00a0633) |
JPY | 10\u00a0358\u00a0989 | 66\u00a0264 | 9\u00a0461\u00a0714 | 67\u00a0267 |
NOK | 388\u00a0197 | 34\u00a0536 | 255\u00a0426 | 24\u00a0294 |
USD | (27\u00a0740) | (25\u00a0104) | (24\u00a0231) | (22\u00a0718) |
Total nominal value | (8\u00a0965) | (3\u00a0790) | ||
Total fair value | (6\u00a0494) | (534) |
Positive numbers represent purchases.
Interest risk
Elopak's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates. To manage this risk, the Group maintains a portion of its borrowings at fixed rates of interest by entering interest rate swaps. These swaps are designated to hedge underlying debt obligations; however, they are not subject to hedge accounting.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Currency | Notional EUR | Fair value | Notional EUR | Fair value |
Interest | EUR | 150\u00a0000 | 1\u00a0545 | 120\u00a0000 | 7\u00a0063 |
Total | 1\u00a0545 | 7\u00a0063 |
Positive numbers represent purchases.
Commodity price risk
Elopak's operating activities require a continuous supply of aluminium and polyethylene. Based on a 12-month forecast of requirements the Group manages the commodity price risk by hedging the purchase price of the commodity with the use of commodity price swaps. Hedge accounting is applied for all commodity derivatives. As per December 31, 2023 the hedged amount of Polyethylene derivatives is 42% of expected purchase for the next 12 months.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | |||
EUR 1\u00a0000 | Metric Tonnes | Fair value | Metric Tonnes | Fair value |
Polyethylene | 15\u00a0000 | (2\u00a0408) | 13\u00a0000 | (2\u00a0576) |
Aluminum | 3\u00a0960 | 31 | 8\u00a0400 | (743) |
Total | (2\u00a0377) | (3\u00a0318) |
Positive numbers represent derivative assets.
Sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rates (for foreign exchange contracts), commodity prices (for commodity swaps) and interest rates (for interest rate swaps) with all other variables being held constant. The impact on the Group's equity is due to changes in the fair value of deriva-tives designated as cash flow hedges.
Numbers are before tax
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Movement | Effect on profit | Effect on equity | Effect on profit | Effect on equity |
Foreign exchange derivatives | +5% | (5\u00a0022) | (10\u00a0872) | (1\u00a0414) | (8\u00a0222) |
(5%) | (2\u00a0597) | (427) | 213 | 1\u00a0638 | |
Commodity swaps | +5% | - | 1\u00a0604 | - | 1\u00a0461 |
(5%) | - | (1\u00a0604) | - | (1\u00a0461) | |
Interest rate swaps | +1% | 4\u00a0417 | - | 2\u00a0010 | - |
(1%) | (4\u00a0642) | - | (2\u00a0093) | - |
Positive numbers represent derivative assets
2. Liquidity risk
Elopak's objective is to maintain a balance between continuity of funding, and flexibility through the use of bank loans and overdraft facilities.
The maturity profile of the Group's financial assets and liabilities based on contractual undiscounted payments is summarised below. The tables only show balance sheet items classified as financial instruments and do not include other balance sheet items affecting liquidity, such as inventories. Also, off-balance sheet items such as unused credit facilities are not included. The derivative instruments may be settled gross or net with the relevant protocol being reflected in the tables.
Contractual maturities of financial liabilities, including estimated interest payments
Non-derivatives financial liabilities
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 243\u00a0767 | 19\u00a0333 | 224\u00a0433 | - | - | 243\u00a0767 |
Accounts payable | 127\u00a0847 | 127\u00a0847 | - | - | - | 127\u00a0847 |
Other liabilities | 162\u00a0765 | 113\u00a0111 | 16\u00a0851 | 12\u00a0969 | 19\u00a0834 | 162\u00a0765 |
Total | 534\u00a0379 | 260\u00a0291 | 241\u00a0285 | 12\u00a0969 | 19\u00a0834 | 534\u00a0379 |
Derivatives financial instruments
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 7\u00a0398 | 5\u00a0823 | 1\u00a0575 | - | - | 7\u00a0398 |
Interest rate swaps | 2\u00a0105 | - | - | 1\u00a0318 | 787 | 2\u00a0105 |
Commodities | 2\u00a0408 | 2\u00a0408 | - | - | - | 2\u00a0408 |
Total | 11\u00a0911 | 8\u00a0231 | 1\u00a0575 | 1\u00a0318 | 787 | 11\u00a0911 |
Non-derivatives financial liabilities
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 325\u00a0715 | 32 760 | 319 451 | - | - | 325\u00a0715 |
Accounts payable | 124\u00a0038 | 124\u00a0038 | - | - | - | 124\u00a0038 |
Other liabilities | 165\u00a0105 | 78\u00a0108 | 28\u00a0708 | 18\u00a0847 | 39\u00a0442 | 165\u00a0105 |
Total | 614\u00a0859 | 234 906 | 348 159 | 18\u00a0847 | 39\u00a0442 | 614\u00a0859 |
Derivatives financial instruments
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 1\u00a0280 | 951 | 330 | - | - | 1\u00a0280 |
Commodities | 3\u00a0318 | 3\u00a0318 | - | - | - | 3\u00a0318 |
Total | 4\u00a0598 | 4\u00a0269 | 330 | - | - | 4\u00a0598 |
The fair value of all financial assets and liabilities approximates their carrying value. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unadjusted quoted prices for identical assets and liabilities
3. Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Elopak has adopted a policy of only being exposed to credit-worthy counterparties, based upon inde-pendent credit analysis for all counterparties, where available. In the cases where this is not available, Elopak uses other publicly available financial information and its own trading records to assess creditworthiness. Outstanding receivables are monitored regularly.
4. Hedge accounting
Cash flow hedge accounting is applied to hedges of foreign currency risk and commodity price risk. The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair values of cash flow hedging instruments related to hedged transactions that have not yet occurred. Movements in the cash flow hedge reserve are detailed in the table below:
Contracts
2023 | 2022 | |||||
EUR 1\u00a0000 | Opening position | Movement | Closing position | Opening position | Movement | Closing position |
Commodity price hedges | (3\u00a0318) | 942 | (2\u00a0377) | 5\u00a0303 | (8\u00a0621) | (3\u00a0318) |
Currency hedges | (176) | (2\u00a0872) | (3\u00a0048) | 142 | (318) | (176) |
Tax effect | 737 | 413 | 1\u00a0150 | (1\u00a0230) | 1\u00a0967 | 737 |
Total | (2\u00a0758) | (1\u00a0517) | (4\u00a0275) | 4\u00a0215 | (6\u00a0972) | (2\u00a0758) |
The movement in the hedge reserve includes gains/(losses) transferred from the cash flow hedge reserve into the income statement during the period. Foreign exchange forwards and commodities hedge maturities are disclosed in note 25.2. Liquidity Risk, which is representative of when the hedge reserve in equity will be recycled to the state-ment of comprehensive income. These are included in the following line items in the income statement.
Movement in hedge reserve
EUR 1\u00a0000 | 2023 | 2022 |
Cost of goods sold | (1\u00a0673) | (7\u00a0790) |
Other operating expenses | (1\u00a0829) | (569) |
Net financial items | (5\u00a0518) | - |
Total | (9\u00a0020) | (8\u00a0359) |
Movement in hedge reserve due to changes in fair values | (10\u00a0537) | 1\u00a0387 |
Total | (1\u00a0517) | (6\u00a0972) |
Due to Elopak hedging policy, hedges are entered into based on highly probable future transactions, either per transaction or by applying base layers. All hedges have a hedge ratio 1:1 and hedge in-effectiveness related to differences in timing of settlement in 2023 and 2022 was insignificant and is not recognised directly to profit and loss.
Carrying amount of financial asset and liabilities
December 31, 2023 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 3 660 | 925 | - | 4\u00a0585 | - | 4\u00a0585 | - | 4\u00a0585 | |
Finance lease receivable | - | - | 7\u00a0084 | 7\u00a0084 | - | - | - | - | |
Trade receivables | - | - | 110\u00a0243 | 110\u00a0243 | - | - | - | - | |
Other current assets | - | - | 116\u00a0944 | 116\u00a0944 | - | - | - | - | |
Cash and cash equivalents | - | - | 13\u00a0308 | 13\u00a0308 | - | - | - | - | |
Total | 3 660 | 925 | 247\u00a0579 | 252\u00a0164 | - | 4\u00a0585 | - | 4\u00a0585 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 243\u00a0767 | 243\u00a0767 | - | - | - | - | |
Derivatives | 5 451 | ||||||||
6 460 | |||||||||
- | 11\u00a0911 | - | 11\u00a0911 | - | 11\u00a0911 | ||||
Trade payables, and other payables | - | - | 266\u00a0576 | 266\u00a0576 | - | - | - | - | |
Total | 5 451 | 6 460 | 510\u00a0343 | 522\u00a0253 | - | 11\u00a0911 | - | 11\u00a0911 |
Carrying amount of financial asset and liabilities
December 31, 2022 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 7 121 | 689 | - | 7\u00a0810 | - | 7\u00a0810 | - | 7\u00a0810 | |
Finance lease receivable | - | - | 8\u00a0227 | 8\u00a0227 | - | - | - | - | |
Trade receivables | - | - | 102\u00a0197 | 102\u00a0197 | - | - | - | - | |
Other current assets | - | - | 113\u00a0018 | 113\u00a0018 | - | - | - | - | |
Cash and cash equivalents | - | - | 25\u00a0883 | 25\u00a0883 | - | - | - | - | |
Total | 7 121 | 689 | 249\u00a0325 | 257\u00a0135 | - | 7\u00a0810 | - | 7\u00a0810 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 325\u00a0715 | 325\u00a0715 | - | - | - | - | |
Derivatives | 550 | 4 048 | - | 4\u00a0598 | - | 4\u00a0598 | - | 4\u00a0598 | |
Trade payables, and other payables | - | - | 245\u00a0417 | 245\u00a0417 | - | - | - | - | |
Total | 550 | 4 048 | 571\u00a0132 | 575\u00a0731 | - | 4\u00a0598 | - | 4\u00a0598 |
Fair value of financial assets and financial liabilities are measured using different levels of input.
\u2022Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
\u2022Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
\u2022Level 3 inputs are unobservable inputs for the asset or liability.
Note 25 Financial risk management
Accounting policy
The Group enters into derivative financial instruments to manage its exposure to interest rate, foreign exchange rate and raw material risk arising from operational, financing and investment activities. In accord-ance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship. The Group designates certain derivatives as either hedge of the fair value of recognised assets or liabilities or firm commitments (fair value hedges), or hedge of highly probable forecast transactions or hedge of foreign currency risk of firm commitments (cash flow hedges).
At inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.
Balance sheet management
The Group manages the balance sheet to ensure a healthy financial position and liquidity. This is done through an annual budgeting process followed by performance management and forecasting updates to ensure adequate financial flexibility and liquidity for the company. The Group\u2019s main bank covenants, especially the net interest bearing debt/ EBITDA, are monitored closely on a continuous basis to ensure compliance at all times.
Financial risk policy
The Group is exposed to market risk, credit risk and liquidity risk. Risk management activities are governed by appropriate policies and procedures. Risks are identified, measured and managed in accordance with the Group's policies and risk objectives. It is the Group's policy that no trading in derivatives for speculative purposes shall be undertaken. There have been no significant changes in the management of risks related to financials during the period.
Categories of financial risk to operational business
1. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency risk, commodity price risk and interest rate risk. Elopak buys derivatives to manage market risks and seeks to apply hedge accounting to manage volatility in profit or loss. Hedge accounting is applied to all currency and commodity derivatives, while interest rate derivatives are not subject to hedge accounting.
Derivatives
December 31, 2023 | December 31, 2022 | |||||
EUR 1\u00a0000 | Assets | Liabilities | Total | Assets | Liabilities | Total |
Currency derivatives | 904 | 7\u00a0398 | (6\u00a0494) | 747 | 1\u00a0280 | (534) |
Commodity derivatives | 31 | 2\u00a0408 | (2\u00a0377) | - | 3\u00a0318 | (3\u00a0318) |
Interest derivatives | 3\u00a0650 | 2\u00a0105 | 1\u00a0545 | 7\u00a0063 | - | 7\u00a0063 |
Total | 4\u00a0585 | 11\u00a0911 | (7\u00a0326) | 7\u00a0810 | 4\u00a0598 | 3\u00a0212 |
The full fair value of a derivative is classified as \"Other non-current assets or \"Other non-current liabilities\" if the remaining maturity of the derivative is more than 12 months and as \"Other current assets\" or \"Other current liabilities\", if the maturity of the derivative is less than 12 months. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unad-justed quoted prices for identical assets and liabilities, with changes in fair value are therefore recognized in the income statement. No other material financial assets or liabilities are measured at fair value through profit or loss.
Where eligible, derivatives used for hedging are designated in cash flow hedge accounting relationships.
Currency risk
Elopak's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activi-ties, financing of foreign operations and the Group's net investments in foreign subsidiaries.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
Assets | Liabilities | |||
Currency | 2023 | 2022 | 2023 | 2022 |
BGN | 241 | 222 | 246 | 238 |
CAD | 96\u00a0376 | 22\u00a0928 | 64\u00a0044 | 95\u00a0182 |
CHF | 4\u00a0800 | 4\u00a0337 | 4\u00a0771 | 4\u00a0252 |
CZK | 62\u00a0929 | 57\u00a0588 | 62\u00a0821 | 68\u00a0479 |
DKK | 2\u00a0809\u00a0965 | 2\u00a0494\u00a0348 | 2\u00a0889\u00a0442 | 2\u00a0403\u00a0598 |
DZD | - | - | - | 4\u00a0577 |
EUR | 86\u00a0393 | 4\u00a0910 | 750\u00a0783 | 3\u00a0910 |
GBP | 32\u00a0760 | 26\u00a0313 | 32\u00a0821 | 27\u00a0076 |
HUF | 863\u00a0797 | 638\u00a0998 | 449\u00a0243 | 603\u00a0176 |
NIS | - | 8 | 9 | - |
JPY | 2\u00a0814\u00a0818 | 4\u00a0091\u00a0538 | 6\u00a0493\u00a0463 | 2\u00a0077\u00a0533 |
MXN | 66\u00a0521 | 65\u00a0240 | 62\u00a0304 | 65\u00a0645 |
NOK | 2\u00a0537\u00a0714 | 2\u00a0093\u00a0232 | 2\u00a0548\u00a0400 | 2\u00a0089\u00a0246 |
PLN | 79\u00a0545 | 47\u00a0729 | 78\u00a0552 | 51\u00a0036 |
RUR | 1\u00a0889\u00a0323 | 1\u00a0344\u00a0703 | 1\u00a0888\u00a0924 | 1\u00a0344\u00a0978 |
SAR | - | - | - | 3\u00a0274 |
SEK | 260\u00a0590 | 193\u00a0612 | 274\u00a0466 | 194\u00a0541 |
TND | - | - | - | 57 |
UAH | - | - | - | - |
USD | 63\u00a0043 | 86\u00a0368 | 83\u00a0515 | 51\u00a0649 |
Foreign exchange risk from operating activities such as salaries and personnel tax are managed by hedging trans-actions that are highly probable to occur within periods out 18 months by entering foreign currency contracts.
The Group employs a layering policy in which the nearest calendar quarter is hedged up to 90% with coverage decreasing in steps to 15% at 18 months out.
Currency exposures related to purchase of filling machines are hedged at a one-to-one basis (100% coverage at the specified date of payment).
Hedge accounting is applied to all currency derivatives, except for cross-currency interest rate swaps which are recognised as financial income or financial expense in profit or loss. Hedge accounting is designated at the date of recognition of the hedged item, however the derivatives are due at the date of expected payment. At designation, the fair value of the hedging derivatives is recycled from Hedge reserve in equity to the hedged item (i.e. filling machine recognised in inventory) and to profit or loss to the same accounting line and at the same time as the hedged item is recognised to profit or loss.
Outstanding derivatives
Nominal amount
EUR 1\u00a0000 | December 31, 2023 | December 31, 2022 | ||
Currency | Ccy | EUR | Ccy | EUR |
CAD | 7\u00a0749 | 5\u00a0292 | - | - |
EUR | (89\u00a0952) | (89\u00a0952) | (72\u00a0633) | (72\u00a0633) |
JPY | 10\u00a0358\u00a0989 | 66\u00a0264 | 9\u00a0461\u00a0714 | 67\u00a0267 |
NOK | 388\u00a0197 | 34\u00a0536 | 255\u00a0426 | 24\u00a0294 |
USD | (27\u00a0740) | (25\u00a0104) | (24\u00a0231) | (22\u00a0718) |
Total nominal value | (8\u00a0965) | (3\u00a0790) | ||
Total fair value | (6\u00a0494) | (534) |
Positive numbers represent purchases.
Interest risk
Elopak's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates. To manage this risk, the Group maintains a portion of its borrowings at fixed rates of interest by entering interest rate swaps. These swaps are designated to hedge underlying debt obligations; however, they are not subject to hedge accounting.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Currency | Notional EUR | Fair value | Notional EUR | Fair value |
Interest | EUR | 150\u00a0000 | 1\u00a0545 | 120\u00a0000 | 7\u00a0063 |
Total | 1\u00a0545 | 7\u00a0063 |
Positive numbers represent purchases.
Commodity price risk
Elopak's operating activities require a continuous supply of aluminium and polyethylene. Based on a 12-month forecast of requirements the Group manages the commodity price risk by hedging the purchase price of the commodity with the use of commodity price swaps. Hedge accounting is applied for all commodity derivatives. As per December 31, 2023 the hedged amount of Polyethylene derivatives is 42% of expected purchase for the next 12 months.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | |||
EUR 1\u00a0000 | Metric Tonnes | Fair value | Metric Tonnes | Fair value |
Polyethylene | 15\u00a0000 | (2\u00a0408) | 13\u00a0000 | (2\u00a0576) |
Aluminum | 3\u00a0960 | 31 | 8\u00a0400 | (743) |
Total | (2\u00a0377) | (3\u00a0318) |
Positive numbers represent derivative assets.
Sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rates (for foreign exchange contracts), commodity prices (for commodity swaps) and interest rates (for interest rate swaps) with all other variables being held constant. The impact on the Group's equity is due to changes in the fair value of deriva-tives designated as cash flow hedges.
Numbers are before tax
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Movement | Effect on profit | Effect on equity | Effect on profit | Effect on equity |
Foreign exchange derivatives | +5% | (5\u00a0022) | (10\u00a0872) | (1\u00a0414) | (8\u00a0222) |
(5%) | (2\u00a0597) | (427) | 213 | 1\u00a0638 | |
Commodity swaps | +5% | - | 1\u00a0604 | - | 1\u00a0461 |
(5%) | - | (1\u00a0604) | - | (1\u00a0461) | |
Interest rate swaps | +1% | 4\u00a0417 | - | 2\u00a0010 | - |
(1%) | (4\u00a0642) | - | (2\u00a0093) | - |
Positive numbers represent derivative assets
2. Liquidity risk
Elopak's objective is to maintain a balance between continuity of funding, and flexibility through the use of bank loans and overdraft facilities.
The maturity profile of the Group's financial assets and liabilities based on contractual undiscounted payments is summarised below. The tables only show balance sheet items classified as financial instruments and do not include other balance sheet items affecting liquidity, such as inventories. Also, off-balance sheet items such as unused credit facilities are not included. The derivative instruments may be settled gross or net with the relevant protocol being reflected in the tables.
Contractual maturities of financial liabilities, including estimated interest payments
Non-derivatives financial liabilities
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 243\u00a0767 | 19\u00a0333 | 224\u00a0433 | - | - | 243\u00a0767 |
Accounts payable | 127\u00a0847 | 127\u00a0847 | - | - | - | 127\u00a0847 |
Other liabilities | 162\u00a0765 | 113\u00a0111 | 16\u00a0851 | 12\u00a0969 | 19\u00a0834 | 162\u00a0765 |
Total | 534\u00a0379 | 260\u00a0291 | 241\u00a0285 | 12\u00a0969 | 19\u00a0834 | 534\u00a0379 |
Derivatives financial instruments
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 7\u00a0398 | 5\u00a0823 | 1\u00a0575 | - | - | 7\u00a0398 |
Interest rate swaps | 2\u00a0105 | - | - | 1\u00a0318 | 787 | 2\u00a0105 |
Commodities | 2\u00a0408 | 2\u00a0408 | - | - | - | 2\u00a0408 |
Total | 11\u00a0911 | 8\u00a0231 | 1\u00a0575 | 1\u00a0318 | 787 | 11\u00a0911 |
Non-derivatives financial liabilities
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 325\u00a0715 | 32 760 | 319 451 | - | - | 325\u00a0715 |
Accounts payable | 124\u00a0038 | 124\u00a0038 | - | - | - | 124\u00a0038 |
Other liabilities | 165\u00a0105 | 78\u00a0108 | 28\u00a0708 | 18\u00a0847 | 39\u00a0442 | 165\u00a0105 |
Total | 614\u00a0859 | 234 906 | 348 159 | 18\u00a0847 | 39\u00a0442 | 614\u00a0859 |
Derivatives financial instruments
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 1\u00a0280 | 951 | 330 | - | - | 1\u00a0280 |
Commodities | 3\u00a0318 | 3\u00a0318 | - | - | - | 3\u00a0318 |
Total | 4\u00a0598 | 4\u00a0269 | 330 | - | - | 4\u00a0598 |
The fair value of all financial assets and liabilities approximates their carrying value. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unadjusted quoted prices for identical assets and liabilities
3. Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Elopak has adopted a policy of only being exposed to credit-worthy counterparties, based upon inde-pendent credit analysis for all counterparties, where available. In the cases where this is not available, Elopak uses other publicly available financial information and its own trading records to assess creditworthiness. Outstanding receivables are monitored regularly.
4. Hedge accounting
Cash flow hedge accounting is applied to hedges of foreign currency risk and commodity price risk. The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair values of cash flow hedging instruments related to hedged transactions that have not yet occurred. Movements in the cash flow hedge reserve are detailed in the table below:
Contracts
2023 | 2022 | |||||
EUR 1\u00a0000 | Opening position | Movement | Closing position | Opening position | Movement | Closing position |
Commodity price hedges | (3\u00a0318) | 942 | (2\u00a0377) | 5\u00a0303 | (8\u00a0621) | (3\u00a0318) |
Currency hedges | (176) | (2\u00a0872) | (3\u00a0048) | 142 | (318) | (176) |
Tax effect | 737 | 413 | 1\u00a0150 | (1\u00a0230) | 1\u00a0967 | 737 |
Total | (2\u00a0758) | (1\u00a0517) | (4\u00a0275) | 4\u00a0215 | (6\u00a0972) | (2\u00a0758) |
The movement in the hedge reserve includes gains/(losses) transferred from the cash flow hedge reserve into the income statement during the period. Foreign exchange forwards and commodities hedge maturities are disclosed in note 25.2. Liquidity Risk, which is representative of when the hedge reserve in equity will be recycled to the state-ment of comprehensive income. These are included in the following line items in the income statement.
Movement in hedge reserve
EUR 1\u00a0000 | 2023 | 2022 |
Cost of goods sold | (1\u00a0673) | (7\u00a0790) |
Other operating expenses | (1\u00a0829) | (569) |
Net financial items | (5\u00a0518) | - |
Total | (9\u00a0020) | (8\u00a0359) |
Movement in hedge reserve due to changes in fair values | (10\u00a0537) | 1\u00a0387 |
Total | (1\u00a0517) | (6\u00a0972) |
Due to Elopak hedging policy, hedges are entered into based on highly probable future transactions, either per transaction or by applying base layers. All hedges have a hedge ratio 1:1 and hedge in-effectiveness related to differences in timing of settlement in 2023 and 2022 was insignificant and is not recognised directly to profit and loss.
Carrying amount of financial asset and liabilities
December 31, 2023 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 3 660 | 925 | - | 4\u00a0585 | - | 4\u00a0585 | - | 4\u00a0585 | |
Finance lease receivable | - | - | 7\u00a0084 | 7\u00a0084 | - | - | - | - | |
Trade receivables | - | - | 110\u00a0243 | 110\u00a0243 | - | - | - | - | |
Other current assets | - | - | 116\u00a0944 | 116\u00a0944 | - | - | - | - | |
Cash and cash equivalents | - | - | 13\u00a0308 | 13\u00a0308 | - | - | - | - | |
Total | 3 660 | 925 | 247\u00a0579 | 252\u00a0164 | - | 4\u00a0585 | - | 4\u00a0585 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 243\u00a0767 | 243\u00a0767 | - | - | - | - | |
Derivatives | 5 451 | ||||||||
6 460 | |||||||||
- | 11\u00a0911 | - | 11\u00a0911 | - | 11\u00a0911 | ||||
Trade payables, and other payables | - | - | 266\u00a0576 | 266\u00a0576 | - | - | - | - | |
Total | 5 451 | 6 460 | 510\u00a0343 | 522\u00a0253 | - | 11\u00a0911 | - | 11\u00a0911 |
Carrying amount of financial asset and liabilities
December 31, 2022 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 7 121 | 689 | - | 7\u00a0810 | - | 7\u00a0810 | - | 7\u00a0810 | |
Finance lease receivable | - | - | 8\u00a0227 | 8\u00a0227 | - | - | - | - | |
Trade receivables | - | - | 102\u00a0197 | 102\u00a0197 | - | - | - | - | |
Other current assets | - | - | 113\u00a0018 | 113\u00a0018 | - | - | - | - | |
Cash and cash equivalents | - | - | 25\u00a0883 | 25\u00a0883 | - | - | - | - | |
Total | 7 121 | 689 | 249\u00a0325 | 257\u00a0135 | - | 7\u00a0810 | - | 7\u00a0810 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 325\u00a0715 | 325\u00a0715 | - | - | - | - | |
Derivatives | 550 | 4 048 | - | 4\u00a0598 | - | 4\u00a0598 | - | 4\u00a0598 | |
Trade payables, and other payables | - | - | 245\u00a0417 | 245\u00a0417 | - | - | - | - | |
Total | 550 | 4 048 | 571\u00a0132 | 575\u00a0731 | - | 4\u00a0598 | - | 4\u00a0598 |
Fair value of financial assets and financial liabilities are measured using different levels of input.
\u2022Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
\u2022Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
\u2022Level 3 inputs are unobservable inputs for the asset or liability.
Accounting policy
The Group enters into derivative financial instruments to manage its exposure to interest rate, foreign exchange rate and raw material risk arising from operational, financing and investment activities. In accord-ance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship. The Group designates certain derivatives as either hedge of the fair value of recognised assets or liabilities or firm commitments (fair value hedges), or hedge of highly probable forecast transactions or hedge of foreign currency risk of firm commitments (cash flow hedges).
At inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f45978": { "value": "Accounting policy
The Group enters into derivative financial instruments to manage its exposure to interest rate, foreign exchange rate and raw material risk arising from operational, financing and investment activities. In accord-ance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship. The Group designates certain derivatives as either hedge of the fair value of recognised assets or liabilities or firm commitments (fair value hedges), or hedge of highly probable forecast transactions or hedge of foreign currency risk of firm commitments (cash flow hedges).
At inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f46324": { "value": "1. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency risk, commodity price risk and interest rate risk. Elopak buys derivatives to manage market risks and seeks to apply hedge accounting to manage volatility in profit or loss. Hedge accounting is applied to all currency and commodity derivatives, while interest rate derivatives are not subject to hedge accounting.
Derivatives
December 31, 2023 | December 31, 2022 | |||||
EUR 1\u00a0000 | Assets | Liabilities | Total | Assets | Liabilities | Total |
Currency derivatives | 904 | 7\u00a0398 | (6\u00a0494) | 747 | 1\u00a0280 | (534) |
Commodity derivatives | 31 | 2\u00a0408 | (2\u00a0377) | - | 3\u00a0318 | (3\u00a0318) |
Interest derivatives | 3\u00a0650 | 2\u00a0105 | 1\u00a0545 | 7\u00a0063 | - | 7\u00a0063 |
Total | 4\u00a0585 | 11\u00a0911 | (7\u00a0326) | 7\u00a0810 | 4\u00a0598 | 3\u00a0212 |
The full fair value of a derivative is classified as \"Other non-current assets or \"Other non-current liabilities\" if the remaining maturity of the derivative is more than 12 months and as \"Other current assets\" or \"Other current liabilities\", if the maturity of the derivative is less than 12 months. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unad-justed quoted prices for identical assets and liabilities, with changes in fair value are therefore recognized in the income statement. No other material financial assets or liabilities are measured at fair value through profit or loss.
Where eligible, derivatives used for hedging are designated in cash flow hedge accounting relationships.
Currency risk
Elopak's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activi-ties, financing of foreign operations and the Group's net investments in foreign subsidiaries.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
Assets | Liabilities | |||
Currency | 2023 | 2022 | 2023 | 2022 |
BGN | 241 | 222 | 246 | 238 |
CAD | 96\u00a0376 | 22\u00a0928 | 64\u00a0044 | 95\u00a0182 |
CHF | 4\u00a0800 | 4\u00a0337 | 4\u00a0771 | 4\u00a0252 |
CZK | 62\u00a0929 | 57\u00a0588 | 62\u00a0821 | 68\u00a0479 |
DKK | 2\u00a0809\u00a0965 | 2\u00a0494\u00a0348 | 2\u00a0889\u00a0442 | 2\u00a0403\u00a0598 |
DZD | - | - | - | 4\u00a0577 |
EUR | 86\u00a0393 | 4\u00a0910 | 750\u00a0783 | 3\u00a0910 |
GBP | 32\u00a0760 | 26\u00a0313 | 32\u00a0821 | 27\u00a0076 |
HUF | 863\u00a0797 | 638\u00a0998 | 449\u00a0243 | 603\u00a0176 |
NIS | - | 8 | 9 | - |
JPY | 2\u00a0814\u00a0818 | 4\u00a0091\u00a0538 | 6\u00a0493\u00a0463 | 2\u00a0077\u00a0533 |
MXN | 66\u00a0521 | 65\u00a0240 | 62\u00a0304 | 65\u00a0645 |
NOK | 2\u00a0537\u00a0714 | 2\u00a0093\u00a0232 | 2\u00a0548\u00a0400 | 2\u00a0089\u00a0246 |
PLN | 79\u00a0545 | 47\u00a0729 | 78\u00a0552 | 51\u00a0036 |
RUR | 1\u00a0889\u00a0323 | 1\u00a0344\u00a0703 | 1\u00a0888\u00a0924 | 1\u00a0344\u00a0978 |
SAR | - | - | - | 3\u00a0274 |
SEK | 260\u00a0590 | 193\u00a0612 | 274\u00a0466 | 194\u00a0541 |
TND | - | - | - | 57 |
UAH | - | - | - | - |
USD | 63\u00a0043 | 86\u00a0368 | 83\u00a0515 | 51\u00a0649 |
Foreign exchange risk from operating activities such as salaries and personnel tax are managed by hedging trans-actions that are highly probable to occur within periods out 18 months by entering foreign currency contracts.
The Group employs a layering policy in which the nearest calendar quarter is hedged up to 90% with coverage decreasing in steps to 15% at 18 months out.
Currency exposures related to purchase of filling machines are hedged at a one-to-one basis (100% coverage at the specified date of payment).
Hedge accounting is applied to all currency derivatives, except for cross-currency interest rate swaps which are recognised as financial income or financial expense in profit or loss. Hedge accounting is designated at the date of recognition of the hedged item, however the derivatives are due at the date of expected payment. At designation, the fair value of the hedging derivatives is recycled from Hedge reserve in equity to the hedged item (i.e. filling machine recognised in inventory) and to profit or loss to the same accounting line and at the same time as the hedged item is recognised to profit or loss.
Outstanding derivatives
Nominal amount
EUR 1\u00a0000 | December 31, 2023 | December 31, 2022 | ||
Currency | Ccy | EUR | Ccy | EUR |
CAD | 7\u00a0749 | 5\u00a0292 | - | - |
EUR | (89\u00a0952) | (89\u00a0952) | (72\u00a0633) | (72\u00a0633) |
JPY | 10\u00a0358\u00a0989 | 66\u00a0264 | 9\u00a0461\u00a0714 | 67\u00a0267 |
NOK | 388\u00a0197 | 34\u00a0536 | 255\u00a0426 | 24\u00a0294 |
USD | (27\u00a0740) | (25\u00a0104) | (24\u00a0231) | (22\u00a0718) |
Total nominal value | (8\u00a0965) | (3\u00a0790) | ||
Total fair value | (6\u00a0494) | (534) |
Positive numbers represent purchases.
Interest risk
Elopak's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates. To manage this risk, the Group maintains a portion of its borrowings at fixed rates of interest by entering interest rate swaps. These swaps are designated to hedge underlying debt obligations; however, they are not subject to hedge accounting.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Currency | Notional EUR | Fair value | Notional EUR | Fair value |
Interest | EUR | 150\u00a0000 | 1\u00a0545 | 120\u00a0000 | 7\u00a0063 |
Total | 1\u00a0545 | 7\u00a0063 |
Positive numbers represent purchases.
Commodity price risk
Elopak's operating activities require a continuous supply of aluminium and polyethylene. Based on a 12-month forecast of requirements the Group manages the commodity price risk by hedging the purchase price of the commodity with the use of commodity price swaps. Hedge accounting is applied for all commodity derivatives. As per December 31, 2023 the hedged amount of Polyethylene derivatives is 42% of expected purchase for the next 12 months.
Outstanding derivatives
Notional amounts and fair values
December 31, 2023 | December 31, 2022 | |||
EUR 1\u00a0000 | Metric Tonnes | Fair value | Metric Tonnes | Fair value |
Polyethylene | 15\u00a0000 | (2\u00a0408) | 13\u00a0000 | (2\u00a0576) |
Aluminum | 3\u00a0960 | 31 | 8\u00a0400 | (743) |
Total | (2\u00a0377) | (3\u00a0318) |
Positive numbers represent derivative assets.
Sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rates (for foreign exchange contracts), commodity prices (for commodity swaps) and interest rates (for interest rate swaps) with all other variables being held constant. The impact on the Group's equity is due to changes in the fair value of deriva-tives designated as cash flow hedges.
Numbers are before tax
December 31, 2023 | December 31, 2022 | ||||
EUR 1\u00a0000 | Movement | Effect on profit | Effect on equity | Effect on profit | Effect on equity |
Foreign exchange derivatives | +5% | (5\u00a0022) | (10\u00a0872) | (1\u00a0414) | (8\u00a0222) |
(5%) | (2\u00a0597) | (427) | 213 | 1\u00a0638 | |
Commodity swaps | +5% | - | 1\u00a0604 | - | 1\u00a0461 |
(5%) | - | (1\u00a0604) | - | (1\u00a0461) | |
Interest rate swaps | +1% | 4\u00a0417 | - | 2\u00a0010 | - |
(1%) | (4\u00a0642) | - | (2\u00a0093) | - |
Positive numbers represent derivative assets
2. Liquidity risk
Elopak's objective is to maintain a balance between continuity of funding, and flexibility through the use of bank loans and overdraft facilities.
The maturity profile of the Group's financial assets and liabilities based on contractual undiscounted payments is summarised below. The tables only show balance sheet items classified as financial instruments and do not include other balance sheet items affecting liquidity, such as inventories. Also, off-balance sheet items such as unused credit facilities are not included. The derivative instruments may be settled gross or net with the relevant protocol being reflected in the tables.
Contractual maturities of financial liabilities, including estimated interest payments
Non-derivatives financial liabilities
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 243\u00a0767 | 19\u00a0333 | 224\u00a0433 | - | - | 243\u00a0767 |
Accounts payable | 127\u00a0847 | 127\u00a0847 | - | - | - | 127\u00a0847 |
Other liabilities | 162\u00a0765 | 113\u00a0111 | 16\u00a0851 | 12\u00a0969 | 19\u00a0834 | 162\u00a0765 |
Total | 534\u00a0379 | 260\u00a0291 | 241\u00a0285 | 12\u00a0969 | 19\u00a0834 | 534\u00a0379 |
Derivatives financial instruments
2023 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 7\u00a0398 | 5\u00a0823 | 1\u00a0575 | - | - | 7\u00a0398 |
Interest rate swaps | 2\u00a0105 | - | - | 1\u00a0318 | 787 | 2\u00a0105 |
Commodities | 2\u00a0408 | 2\u00a0408 | - | - | - | 2\u00a0408 |
Total | 11\u00a0911 | 8\u00a0231 | 1\u00a0575 | 1\u00a0318 | 787 | 11\u00a0911 |
Non-derivatives financial liabilities
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Loans and borrowings(Note22) | 325\u00a0715 | 32 760 | 319 451 | - | - | 325\u00a0715 |
Accounts payable | 124\u00a0038 | 124\u00a0038 | - | - | - | 124\u00a0038 |
Other liabilities | 165\u00a0105 | 78\u00a0108 | 28\u00a0708 | 18\u00a0847 | 39\u00a0442 | 165\u00a0105 |
Total | 614\u00a0859 | 234 906 | 348 159 | 18\u00a0847 | 39\u00a0442 | 614\u00a0859 |
Derivatives financial instruments
2022 | ||||||
EUR 1\u00a0000 | Carrying value | < 1 year | 1-3 years | 3-5 years | > 5 years | Total contractual maturities |
Foreign exchange | 1\u00a0280 | 951 | 330 | - | - | 1\u00a0280 |
Commodities | 3\u00a0318 | 3\u00a0318 | - | - | - | 3\u00a0318 |
Total | 4\u00a0598 | 4\u00a0269 | 330 | - | - | 4\u00a0598 |
The fair value of all financial assets and liabilities approximates their carrying value. The fair value estimation of derivative financial instruments has been arrived at by applying a level 2 valuation methodology which uses inputs other than unadjusted quoted prices for identical assets and liabilities
3. Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Elopak has adopted a policy of only being exposed to credit-worthy counterparties, based upon inde-pendent credit analysis for all counterparties, where available. In the cases where this is not available, Elopak uses other publicly available financial information and its own trading records to assess creditworthiness. Outstanding receivables are monitored regularly.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f49412": { "value": "Carrying amount of financial asset and liabilities
December 31, 2023 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 3 660 | 925 | - | 4\u00a0585 | - | 4\u00a0585 | - | 4\u00a0585 | |
Finance lease receivable | - | - | 7\u00a0084 | 7\u00a0084 | - | - | - | - | |
Trade receivables | - | - | 110\u00a0243 | 110\u00a0243 | - | - | - | - | |
Other current assets | - | - | 116\u00a0944 | 116\u00a0944 | - | - | - | - | |
Cash and cash equivalents | - | - | 13\u00a0308 | 13\u00a0308 | - | - | - | - | |
Total | 3 660 | 925 | 247\u00a0579 | 252\u00a0164 | - | 4\u00a0585 | - | 4\u00a0585 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 243\u00a0767 | 243\u00a0767 | - | - | - | - | |
Derivatives | 5 451 | ||||||||
6 460 | |||||||||
- | 11\u00a0911 | - | 11\u00a0911 | - | 11\u00a0911 | ||||
Trade payables, and other payables | - | - | 266\u00a0576 | 266\u00a0576 | - | - | - | - | |
Total | 5 451 | 6 460 | 510\u00a0343 | 522\u00a0253 | - | 11\u00a0911 | - | 11\u00a0911 |
Carrying amount of financial asset and liabilities
December 31, 2022 | Categories | Fair value measurement using | |||||||
EUR 1\u00a0000 | Notes | Fair value through profit and loss (FVPL) | Fair value through other comprehensive income (FVOCI) | Financial instruments at amortized cost | Total | Quoted prices in active markets (Level 1) | Significant observable inputs (Level2) | Significant unobservable inputs(Level 3) | Total instruments measured at fair value |
Assets | |||||||||
Derivatives | 7 121 | 689 | - | 7\u00a0810 | - | 7\u00a0810 | - | 7\u00a0810 | |
Finance lease receivable | - | - | 8\u00a0227 | 8\u00a0227 | - | - | - | - | |
Trade receivables | - | - | 102\u00a0197 | 102\u00a0197 | - | - | - | - | |
Other current assets | - | - | 113\u00a0018 | 113\u00a0018 | - | - | - | - | |
Cash and cash equivalents | - | - | 25\u00a0883 | 25\u00a0883 | - | - | - | - | |
Total | 7 121 | 689 | 249\u00a0325 | 257\u00a0135 | - | 7\u00a0810 | - | 7\u00a0810 | |
Liabilities | |||||||||
Liablities to financial institutions | - | - | 325\u00a0715 | 325\u00a0715 | - | - | - | - | |
Derivatives | 550 | 4 048 | - | 4\u00a0598 | - | 4\u00a0598 | - | 4\u00a0598 | |
Trade payables, and other payables | - | - | 245\u00a0417 | 245\u00a0417 | - | - | - | - | |
Total | 550 | 4 048 | 571\u00a0132 | 575\u00a0731 | - | 4\u00a0598 | - | 4\u00a0598 |
Fair value of financial assets and financial liabilities are measured using different levels of input.
\u2022Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
\u2022Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
\u2022Level 3 inputs are unobservable inputs for the asset or liability.
Note 26 Change in obligations from financial activities
2023 | |||
EUR 1\u00a0000 | Interest-bearing loans and borrowings (Note22) | Lease liabilities (Note14) | Total |
1.1 | 325\u00a0715 | 90\u00a0674 | 416\u00a0390 |
Cash Flows | |||
Proceeds of loans from financial institutions | 1\u00a0087\u00a0304 | - | 1\u00a0087\u00a0304 |
Repayment of loans from financial institutions | (1\u00a0174\u00a0598) | - | (1\u00a0174\u00a0598) |
Interest expense to financial institutions | (11\u00a0303) | - | (11\u00a0303) |
Lease payments | - | (18\u00a0359) | (18\u00a0359) |
Non-cash effects | |||
Interest expense | 11 605 | 6\u00a0566 | 18 171 |
Net additions lease liabilities | - | 22\u00a0639 | 22\u00a0639 |
Other non-cash items | 5\u00a0033 | - | 5 033 |
31.12 | 243 756 | 101\u00a0520 | 345 276 |
Current | 19\u00a0333 | 23 096 | |
Non-current | 224\u00a0433 | 78 424 | |
2022 | |||
EUR 1\u00a0000 | Interest-bearing loans and borrowings (Note22) | Lease liabilities (Note14) | Total |
1.1 | 183\u00a0853 | 80\u00a0604 | 264\u00a0457 |
Cash Flows | |||
Proceeds of loans from financial institutions | 1\u00a0178\u00a0067 | - | 1\u00a0178\u00a0067 |
Repayment of loans from financial institutions | (1\u00a0030\u00a0217) | - | (1\u00a0030\u00a0217) |
Interest expense to financial institutions | (5\u00a0658) | - | (5\u00a0658) |
Lease payments | - | (19\u00a0770) | (19\u00a0770) |
Non-cash effects | |||
Interest expense | 5\u00a0258 | 4\u00a0575 | 9\u00a0833 |
Net additions lease liabilities | - | 25\u00a0266 | 25\u00a0266 |
Other non-cash items | (5\u00a0588) | - | (5\u00a0588) |
31.12 | 325\u00a0715 | 90\u00a0674 | 416\u00a0390 |
Current | 21\u00a0682 | 17 139 | |
Non-current | 304\u00a0033 | 73 536 |
Note 27 Business combination
Accounting policies
A business combination is a transaction or other event in which an acquirer obtains control of one or more busi-nesses. A business consists of inputs and processes applied to those inputs that have the ability to create outputs. Determining whether a particular set of assets and activities is a business should be based on whether the inte-grated set is capable of being conducted and managed as a business by a market participant.
Business combinations are accounted for according to IFRS 3 using the acquisition method, also called purchase price allocation (PPA). The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at fair value at acquisition date according to IFRS 13, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-con-trolling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in other operating expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit or loss.
Goodwill arises in a business combination when the fair value of consideration transferred exceeds the fair value of identifiable assets acquired less the fair value of identifiable liabilities assumed. Goodwill acquired in a business combination is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units and tested subsequently for impairment.
Acquisitions of GLS Elopak
Company | Principal activity | Date of business combination | Percentage owned | Acquiring entity |
GLS Elopak | Trading and manufacturing | May 13, 2022 | 50% | Elopak BV (49.5%)Elopak UK Limited (0.5%) |
Elopak and GLS signed on April 28, 2022 an agreement in which the two companies will have 50% ownership of a newly formed company, GLS Elopak. The completion date (closing) took place May 13, 2022. The agreement provides Elopak with exposure to variable returns and power to affect the returns from GLS Elopak, which means that Elopak will have control of GLS Elopak in accordance with IFRS 10 and will consolidate the company as a subsidiary in Elopak\u2019s financial statements. GLS Elopak will leverage the respective expertise, assets and networks of Elopak and GLS to capitalize on the significant consumer demand in India. The company is being established to manufacture and process high-quality fresh and aseptic packaging solutions, which are designed to ensure that liquid food is safe and accessible to consumers across the globe. The company will cater to both fresh and aseptic segments with applications such as dairy, plant-based drinks, juice, water and liquor.
The transaction is recognized as a business combination in accordance with IFRS 3 and the acquisition date is May 13, 2022.
The acquisition-date fair value of the total consideration transferred was EUR 12\u00a0793 thousand in cash. Transaction costs of EUR 340 thousand were expensed and are included in other operating costs. If the transactions had occurred January 1, 2022, GLS Elopak would have contributed EUR 73 thousand revenue and a loss of EUR 292 thousand before tax. From acquisition date to reporting date GLS Elopak has contributed EUR 5\u00a0217 thousand revenue and a loss of EUR 713 thousand before tax.
Fair values of the identifiable assets in GLS Elopak at acquisition date
EUR 1\u00a0000 | 2022 |
ASSETS | |
Non-current assets | |
Development cost and other intangible assets | 29 |
Deferred tax assets | 1 |
Property, plant and equipment | 10\u00a0462 |
Total non-current assets | 10\u00a0492 |
Current assets | |
Inventory | 550 |
Other current assets | 797 |
Cash and cash equivalents | 8\u00a0419 |
Total current assets | 9\u00a0766 |
Total assets | 20\u00a0258 |
Non-current liabilities | |
Deferred tax liability | 624 |
Total non-current liabilities | 624 |
Current liabilities | |
Current liabilities to financial institutions | |
Trade and other payables | 1\u00a0106 |
Other current liablities | 124 |
Total current liabilities | 1\u00a0230 |
Total liabilities | 1\u00a0854 |
Total identifiable net assets at fair value | 18\u00a0404 |
Non-controlling interest (at share of identifiable net assets) | 9\u00a0202 |
Purchase consideration | 12\u00a0793 |
Goodwill arising from acquisition | 3\u00a0591 |
Purchase consideration | |
Cash consideration paid | 12\u00a0793 |
Total consideration | 12\u00a0793 |
Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of expected synergies arising from the acquisition and assembled workforce, which is not separately recognized.
None of the goodwill recognized is deductible for income tax purposes.
Analysis of cash flows on acquisition
EUR 1\u00a0000 | 2022 |
Net cash acquired with the subsidiary | 8\u00a0419 |
Cash paid | 12\u00a0793 |
Net cash flow from acquisition (included in investing activites) | (4\u00a0374) |
Acquisitions of Naturepak
Company | Principal activity | Date of business combination | Percentage owned | Acquiring entity |
Naturepak Beverage Packaging Co Ltd | Trading and manufacturing | March 29, 2022 | 100% | Elopak BV (99%)Elopak UK Limited (1%) |
Elopak Arabia Holding Company acquired 100% of the voting shares of Naturepak Beverage Packaging Co Ltd on March 29, 2022. Naturepak Beverage is the leading provider of fresh liquid carton and packaging systems in the MENA region with local production facilities in Morocco and Saudi Arabia, which will be integrated into Elopak\u2019s global production network. Present in 16 countries, Naturepak Beverage has an annual production capacity of 2.7 billion cartons across various product sizes and its customers are global blue chip FMCG players and strong regional champions. The acquisition will reinforce Elopak\u2019s position in the region and is an important milestone in management\u2019s ambitions to target 2-3% organic revenue growth, deliver inorganic opportunities and grow its global footprint by entering new geographies.
The transaction is recognized as a business combination in accordance with IFRS 3 and the acquisition date is March 29, 2022.
The acquisition-date fair value of the total consideration transferred was EUR 85\u00a0383 thousand in cash. Transaction costs of EUR 2\u00a0110 thousand were expensed and are included in other operating costs. If the transactions had occurred January 1, 2022, Naturepak would have contributed EUR 7\u00a0765 revenue and EUR 917 profit before tax. From acquisition date to reporting date Naturepak has contributed EUR 33\u00a0422 thousand revenue and a loss of EUR 2 527 thousand before tax.
Fair values of the identifiable assets in Naturepak Beverage Packaging Co Ltd at acquisition date
EUR 1\u00a0000 | 2022 |
ASSETS | |
Non-current assets | |
Development cost and other intangible assets | 26\u00a0794 |
Property, plant and equipment | 11\u00a0162 |
Right-of-use assets | 50 |
Deferred tax asset | 1\u00a0459 |
Other non-current assets | 446 |
Total non-current assets | 39\u00a0910 |
Current assets | |
Inventory | 1\u00a0480 |
Trade receivables | 4\u00a0881 |
Other current assets | 2\u00a0644 |
Cash and cash equivalents | 1\u00a0495 |
Total current assets | 10\u00a0500 |
Total assets | 50\u00a0410 |
Non-current liabilities | |
Deferred tax liability | 7\u00a0789 |
Non-current lease liabilities | 32 |
Other non-current liabilities | 2\u00a0371 |
Total non-current liabilities | 10\u00a0192 |
Current liabilities | |
Current liabilities to financial institutions | 713 |
Trade and other payables | 3\u00a0921 |
Current lease liabilities | 47 |
Other current liablities | 3\u00a0652 |
EUR 1\u00a0000 | 2022 |
Total current liabilities | 8\u00a0333 |
Total liabilities | 18\u00a0525 |
Total identifiable net assets at fair value | 31\u00a0885 |
Purchase consideration | 85\u00a0383 |
Goodwill arising from acquisition | 53\u00a0498 |
Purchase consideration | |
Cash consideration paid | 85\u00a0383 |
Total consideration | 85\u00a0383 |
Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of expected synergies arising from the acquisition and assembled workforce, which is not separately recognized.
None of the goodwill recognized is deductible for income tax purposes.
Analysis of cash flows on acquisition
EUR 1\u00a0000 | 2022 |
Net cash acquired with the subsidiary | 1\u00a0495 |
Cash paid | 85\u00a0383 |
Net cash flow from acquisition (included in investing activites) | (83\u00a0888) |
Fair values of the identifiable assets in GLS Elopak at acquisition date
EUR 1\u00a0000 | 2022 |
ASSETS | |
Non-current assets | |
Development cost and other intangible assets | 29 |
Deferred tax assets | 1 |
Property, plant and equipment | 10\u00a0462 |
Total non-current assets | 10\u00a0492 |
Current assets | |
Inventory | 550 |
Other current assets | 797 |
Cash and cash equivalents | 8\u00a0419 |
Total current assets | 9\u00a0766 |
Total assets | 20\u00a0258 |
Non-current liabilities | |
Deferred tax liability | 624 |
Total non-current liabilities | 624 |
Current liabilities | |
Current liabilities to financial institutions | |
Trade and other payables | 1\u00a0106 |
Other current liablities | 124 |
Total current liabilities | 1\u00a0230 |
Total liabilities | 1\u00a0854 |
Total identifiable net assets at fair value | 18\u00a0404 |
Non-controlling interest (at share of identifiable net assets) | 9\u00a0202 |
Purchase consideration | 12\u00a0793 |
Goodwill arising from acquisition | 3\u00a0591 |
Purchase consideration | |
Cash consideration paid | 12\u00a0793 |
Total consideration | 12\u00a0793 |
Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of expected synergies arising from the acquisition and assembled workforce, which is not separately recognized.
None of the goodwill recognized is deductible for income tax purposes.
Analysis of cash flows on acquisition
EUR 1\u00a0000 | 2022 |
Net cash acquired with the subsidiary | 8\u00a0419 |
Cash paid | 12\u00a0793 |
Net cash flow from acquisition (included in investing activites) | (4\u00a0374) |
Acquisitions of Naturepak
Company | Principal activity | Date of business combination | Percentage owned | Acquiring entity |
Naturepak Beverage Packaging Co Ltd | Trading and manufacturing | March 29, 2022 | 100% | Elopak BV (99%)Elopak UK Limited (1%) |
Elopak Arabia Holding Company acquired 100% of the voting shares of Naturepak Beverage Packaging Co Ltd on March 29, 2022. Naturepak Beverage is the leading provider of fresh liquid carton and packaging systems in the MENA region with local production facilities in Morocco and Saudi Arabia, which will be integrated into Elopak\u2019s global production network. Present in 16 countries, Naturepak Beverage has an annual production capacity of 2.7 billion cartons across various product sizes and its customers are global blue chip FMCG players and strong regional champions. The acquisition will reinforce Elopak\u2019s position in the region and is an important milestone in management\u2019s ambitions to target 2-3% organic revenue growth, deliver inorganic opportunities and grow its global footprint by entering new geographies.
The transaction is recognized as a business combination in accordance with IFRS 3 and the acquisition date is March 29, 2022.
The acquisition-date fair value of the total consideration transferred was EUR 85\u00a0383 thousand in cash. Transaction costs of EUR 2\u00a0110 thousand were expensed and are included in other operating costs. If the transactions had occurred January 1, 2022, Naturepak would have contributed EUR 7\u00a0765 revenue and EUR 917 profit before tax. From acquisition date to reporting date Naturepak has contributed EUR 33\u00a0422 thousand revenue and a loss of EUR 2 527 thousand before tax.
Fair values of the identifiable assets in Naturepak Beverage Packaging Co Ltd at acquisition date
EUR 1\u00a0000 | 2022 |
ASSETS | |
Non-current assets | |
Development cost and other intangible assets | 26\u00a0794 |
Property, plant and equipment | 11\u00a0162 |
Right-of-use assets | 50 |
Deferred tax asset | 1\u00a0459 |
Other non-current assets | 446 |
Total non-current assets | 39\u00a0910 |
Current assets | |
Inventory | 1\u00a0480 |
Trade receivables | 4\u00a0881 |
Other current assets | 2\u00a0644 |
Cash and cash equivalents | 1\u00a0495 |
Total current assets | 10\u00a0500 |
Total assets | 50\u00a0410 |
Non-current liabilities | |
Deferred tax liability | 7\u00a0789 |
Non-current lease liabilities | 32 |
Other non-current liabilities | 2\u00a0371 |
Total non-current liabilities | 10\u00a0192 |
Current liabilities | |
Current liabilities to financial institutions | 713 |
Trade and other payables | 3\u00a0921 |
Current lease liabilities | 47 |
Other current liablities | 3\u00a0652 |
EUR 1\u00a0000 | 2022 |
Total current liabilities | 8\u00a0333 |
Total liabilities | 18\u00a0525 |
Total identifiable net assets at fair value | 31\u00a0885 |
Purchase consideration | 85\u00a0383 |
Goodwill arising from acquisition | 53\u00a0498 |
Purchase consideration | |
Cash consideration paid | 85\u00a0383 |
Total consideration | 85\u00a0383 |
Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of expected synergies arising from the acquisition and assembled workforce, which is not separately recognized.
None of the goodwill recognized is deductible for income tax purposes.
Analysis of cash flows on acquisition
EUR 1\u00a0000 | 2022 |
Net cash acquired with the subsidiary | 1\u00a0495 |
Cash paid | 85\u00a0383 |
Net cash flow from acquisition (included in investing activites) | (83\u00a0888) |
Note 28 Shares in subsidiaries and joint ventures
The following companies are consolidated as subsidiaries in Elopak Group
Company | Percentage owned | Year of acquisition | Country | Principal activity |
Elopak AB | 100% | 1961 | Sweden | Trading |
Elopak B.V. | 100% | 1968 | Netherlands | Manufacturing |
Elopak GmbH | 100% | 1968 | Germany | Trading and manufacturing |
Elopak SpA | 100% | 1981 | Italy | Trading |
Elopak Oy | 100% | 1982 | Finland | Trading |
Elopak Systems AG | 100% | 1984 | Switzerland | Trading |
Elopak Denmark A/S | 100% | 1988 | Denmark | Trading and manufacturing |
Elopak GesmbH | 100% | 1989 | Austria | Trading |
PrJSC Elopak Fastiv | 100% | 1994 | Ukraine | Trading and manufacturing |
Elopak S.A. | 100% | 1994 | Poland | Trading and service |
Elopak Israel AS | 100% | 1998 | Norway | Holding |
Elopak Canada Inc. | 100% | 2000 | Canada | Trading and manufacturing |
Elofill GmbH | 100% | 2000 | Germany | Holding |
Elopak s.r.o. | 100% | 2001 | Czech Republic | Trading |
Elopak UK Ltd | 100% | 2004 | United Kingdom | Trading |
Elopak BS d.o.o | 100% | 2017 | Serbia | Service |
Elopak Kft. | 100% | 2006 | Hungary | Trading |
Elopak EOOD | 100% | 2009 | Bulgaria | Trading |
Elopak Tunisie SARL | 100% | 2017 | Tunisia | Trading |
Elopak Egypt LLC | 100% | 2017 | Egypt | Trading |
Elopak Algerie SARL | 49% | 2018 | Algeria | Trading |
Elopak Arabia Holding Company LLC | 100% | 2022 | Saudi Arabia | Holding |
Elopak Packaging Company LLC | 100% | 2022 | Saudi Arabia | Trading and manufacturing |
Elopak Morocco SAS | 100% | 2022 | Morocco | Trading and manufacturing |
GLS Elopak | 50% | 2022 | India | Trading and manufacturing |
The percentage owned represents the voting stake.
The following joint ventures are accounted for in accordance with the equity method
Company | Percentage owned | Year of acquisition | Country | Principal activity |
Lala Elopak S.A. de C.V. | 49% | 1998 | Mexico | Trading and manufacturing |
Impresora Del Yaque | 51% | 2007 | Dominican Republic | Trading and manufacturing |
Elopak Nampak Africa Ltd | 50% | 2020 | Kenya | Trading |
The percentage owned represents the voting stake.
Note 28 Shares in subsidiaries and joint ventures
The following companies are consolidated as subsidiaries in Elopak Group
Company | Percentage owned | Year of acquisition | Country | Principal activity |
Elopak AB | 100% | 1961 | Sweden | Trading |
Elopak B.V. | 100% | 1968 | Netherlands | Manufacturing |
Elopak GmbH | 100% | 1968 | Germany | Trading and manufacturing |
Elopak SpA | 100% | 1981 | Italy | Trading |
Elopak Oy | 100% | 1982 | Finland | Trading |
Elopak Systems AG | 100% | 1984 | Switzerland | Trading |
Elopak Denmark A/S | 100% | 1988 | Denmark | Trading and manufacturing |
Elopak GesmbH | 100% | 1989 | Austria | Trading |
PrJSC Elopak Fastiv | 100% | 1994 | Ukraine | Trading and manufacturing |
Elopak S.A. | 100% | 1994 | Poland | Trading and service |
Elopak Israel AS | 100% | 1998 | Norway | Holding |
Elopak Canada Inc. | 100% | 2000 | Canada | Trading and manufacturing |
Elofill GmbH | 100% | 2000 | Germany | Holding |
Elopak s.r.o. | 100% | 2001 | Czech Republic | Trading |
Elopak UK Ltd | 100% | 2004 | United Kingdom | Trading |
Elopak BS d.o.o | 100% | 2017 | Serbia | Service |
Elopak Kft. | 100% | 2006 | Hungary | Trading |
Elopak EOOD | 100% | 2009 | Bulgaria | Trading |
Elopak Tunisie SARL | 100% | 2017 | Tunisia | Trading |
Elopak Egypt LLC | 100% | 2017 | Egypt | Trading |
Elopak Algerie SARL | 49% | 2018 | Algeria | Trading |
Elopak Arabia Holding Company LLC | 100% | 2022 | Saudi Arabia | Holding |
Elopak Packaging Company LLC | 100% | 2022 | Saudi Arabia | Trading and manufacturing |
Elopak Morocco SAS | 100% | 2022 | Morocco | Trading and manufacturing |
GLS Elopak | 50% | 2022 | India | Trading and manufacturing |
The percentage owned represents the voting stake.
The following joint ventures are accounted for in accordance with the equity method
Company | Percentage owned | Year of acquisition | Country | Principal activity |
Lala Elopak S.A. de C.V. | 49% | 1998 | Mexico | Trading and manufacturing |
Impresora Del Yaque | 51% | 2007 | Dominican Republic | Trading and manufacturing |
Elopak Nampak Africa Ltd | 50% | 2020 | Kenya | Trading |
The percentage owned represents the voting stake.
Note 29 Related parties
Transactions with key management
Related party transactions and balances
Transaction values for the year ended | Balance outstanding as of | |||
EUR 1\u00a0000 | December 31 2023 | December 31 2022 | December 31 2023 | December 31 2022 |
Joint Ventures | ||||
Sales of goods and services | 7 606 | 4 877 | 5 033 | 1 200 |
Purchase of goods and services | 36 865 | 35 781 | 3 075 | 2 394 |
Dividends received | 2 018 | - | - | - |
Associates | ||||
Sales of goods and services | 82 | 69 | - | - |
Purchase of goods and services | 1 777 | 1 198 | 23 | 26 |
Loan and related interest | - | - | 818 | 836 |
All amounts are excl. VAT
Board of Directors: annual compensation and number of shares owned
Related party transactions and balances
Compensation earned | Number of shares | |||
EUR 1\u00a0000, except number of shares | December 31 2023 | December 31 2022 | December 31 2023 | December 31 2022 |
Dag Mejdell, Chairperson | 45 | - | 56 000 | - |
Trond Solberg | 50 | - | - | - |
Sanna Suvanto-Harsaae | 43 | 43 | 14 285 | 14 285 |
Sid Johari | 40 | 40 | 17 857 | 17 857 |
Anna Belfrage | 48 | 48 | - | - |
Anette Bauer Ellingsen | 13 | 15 | 1 071 | 1 071 |
H\u00e5vard Grande Urhamar | 5 | - | - | - |
Marianne Groven | - | 1 | - | - |
Cornelia Ann O Neill Kormeseth | - | - | - | - |
Erland Fretheim | - | - | 370 | 370 |
Magne Johan Hamarstr\u00f8m | - | - | - | - |
Jo Olav Lunder\u200c1 | 21 | 65 | - | 107 142 |
Erlend Sveva\u200c2 | 8 | 15 | 1 071 | 1 071 |
1Left his position as Chairperson May 11, 2023\t
2Left his position as Board member August 30, 2023
Other related party transactions
Loans to employees were EUR 19 thousand in 2023 and EUR 24 thousand in 2022. No guarantees have been provided. None of the Board Members or the CEO have executive loans or guarantees in the company.
Note 30 Fees to external auditors
PWC was elected as the principal auditor since 2019, while some Group companies are audited by other audit firms.
Expensed fees
Year to date ended December 31, 2023 | |||||
EUR 1\u00a0000 | Audit fee | Other assurance services | Tax services | Other non-audit services | Total |
PWC | (878) | (34) | (2) | (96) | (1\u00a0010) |
Others | (230) | (3) | (113) | (89) | (435) |
Total | (1\u00a0108) | (37) | (115) | (185) | (1\u00a0445) |
Year to date ended December 31, 2022 | |||||
EUR 1\u00a0000 | Audit fee | Other assurance services | Tax services | Other non-audit services | Total |
PWC | (840) | (33) | (7) | (42) | (922) |
Others | (117) | (3) | (118) | - | (238) |
Total | (957) | (36) | (125) | (42) | (1\u00a0159) |
All amounts are excl. VAT
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54515": { "value": "Note 31 Subsequent events
The Board will propose to the Annual General Meeting a dividend of NOK 1.46 per share for 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54584": { "value": "Note 32 Financial climate impactSustainability FrameworkElopak manages the risks related to sustainability. Climate risks, such as the rapidly changing regulatory environ-ment and physical risks are integrated parts of the sustainability framework.We focus our efforts on monitoring global developments concerning sustainability and/or packaging, such as the EU Taxonomy framework, the Corporate Sustainability due diligence directive, and the EU Packaging & Packaging Waste Directive. See Recycling and recyclability, Appendix: EU Taxonomy, and Appendix: Double materiality assess-ment for more details. The EU Directive 2019/904, also known as Single Use Plastic Directive requires that all single use plastic closures that encompass the carton closures must remain attached during its use, which will come into effect as of July 3, 2024.At present, Elopak is subject to Plastic Product Tax in the UK from 2022 and Spain from 2023. The implementation in Italy is delayed and will not take effect until mid-2024. We will assess developments of Plastic Product Tax in other countries as relevant. As EU Member States have competence on tax, they may change scope, define payer, or decide if the levy will be paid from national budget, meaning no imposition of plastic tax. It has been assessed that the Plastic Product Tax will have no impact on the outcome of impairment testing.On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force in the EU. Elopak has a reporting requirement for the year commencing on January 1, 2024 and is developing internal polices and proce-dures to meet the CSRD requirements. There is no current impact on the financial statements. Since the first draft of the EU Packaging and Packaging Waste Regulation (PPWR) was issued by the EU Commission in November 2022, Elopak has been closely following its developments. Though both the EU Parliament and EU Council issued negotiating positions in 2023, the contents of the regulation remain under discussion until its text is published. While Elopak is continuing to follow the PPWR and its impacts to packaging value chains, there is no impact for the financial statements.Elopak sustainability programElopak\u2019s Group strategy is managed through an annual business planning process where the company defines some key priorities. Each business unit defines its Must-Win-Battles, which are granulated down to individual targets for employees. This structure entails the entire organization and strategic approach, including the sustainability program. Read more about Elopak\u2019s Group strategy in our annual report.The sustainability program is an embedded part of the overall group strategy, and responsibilities for various sections are placed throughout all business units. The Group Leadership Team (GLT) is the overall steering committee of the program and reviews the performance on a quarterly basis. The Board of Directors is overall responsible for strategy approval and implementation.Our sustainability program consists of targets divided into our material topics. The targets are linked to specific strategic initiatives owned by relevant business areas. Specific KPIs are defined to measure and report progress and continuously adapted to reflect our ambitions, some of which refer to the GRI framework or CSRD; others are more specific to our industry and hence self-defined. See Our performance for more details.Climate RiskA full climate risk assessment of material adverse physical impacts to the business from climate change was completed in 2022 in accordance with TCFD (Task Force on Climate-related Financial Disclosures), a framework organization to publicly disclose climate-related risks and opportunities.The climate risk is categorized into Physical impacts such as extreme weather, floods or droughts and sea level rise and Transition impacts from potential changes in climate policy and market outlooks. In order to comprehensively map and analyze risks and opportunities associated with climate change, information and insights are obtained on the following three parameters: Impact, likelihood and time horizon. A combination of these parameters provides an overall assessment of which risk and opportunities are especially relevant for Elopak.Financial climate impactsBased on the sustainability framework, the defined sustainability program targets and the result of the climate risk assessment, Elopak has considered the impacts of climate change in preparing the 2023 consolidated annual financial statements. The table below summarizes the climate risk financial impact assessments.Climate riskAnnual Impact(EUR million)Time horizonCategoryRegulatory risk: Competition from other low-carbon packaging alternativesMore than 80shortrevenueRegulatory risk: Changing landscape for packaging regulationsMore than 80shortrevenueOpportunity: Offering low-carbon and circular alternativesMore than 80shortrevenueOpportunity: Rising costs related to CO2Less than 20shortrevenueRegulatory risk: Constrained access and price fluctuations for low-emission materialsBetween 5 and 20shortcostPhysical risk: Extreme storm events disrupting direct operations for up to one weekLess than 5mediumcostRegulatory risk: Technological developments for carton recycling require investment and/or product developmentMore than 20mediumcostPhysical risk: Chronic droughts or water shortages in areas of direct operations or upstream value chainBetween 5 and 20longcostPhysical risk: Wildfires impacting raw material volumes in the upstream value chainBetween 5 and 20longcostFour risks/opportunities are considered to have a potential of increased revenues at a short time horizon while five risks are considered to have a risk of costs at short, medium or long time horizons. Long time horizon varies from up to 2030 for regulatory risks and until 2100 for physical risks.Impact on capital expenditure commitments:\u2022Targets related to reduced emissions are mainly met by replacing old production line components with new, more energy-effective components. Most of the replaced parts are already fully depreciated.\u2022Due to the Single Use Plastic Directive the existing Caps lease contracts were reassessed in 2022 with a reduced useful life in preparation for the changing legislation. Elopak has signed a contract for Tethered Cap lines and is expecting to expand the offering of tethered cap solutions to customers during 2023 and 2024. Additionally, Elopak has assessed that the existing lease contracts for separable cap lines should be fully depreciated before the tethering requirement will be in place and has therefore reassessed the respective leases, see Note 14for further information.Recognition and measurement of impairments:Impairments are mainly identified and recognized by determining the recoverable amount based on value in use, which means that the item is measured as a present value of discounted future cash-flows. These cash flows are based on expected revenues, result and capital expenditures in the CGU of which the item is operating within. The climate risk financial impact assessment concludes that the potential of revenues is by far higher than the risk of costs and that the revenues is likely to occur earlier than the costs. In the case that Elopak is faced with increased cost related to the climate risks, this will over time be passed on to the customers, similar to what other packaging companies are expected to do when faced with the same climate challenges. Based on this, we consider the risk of impairment related to climate risk to be low.Recognition and measurement of provisions and disclosures surrounding contingent liabilities:Elopak has not identified future costs or losses that meets the definition of provision or contingent liabilities under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.Inventory is measured at cost and written down to the extent that expected sales price less cost of sales is lower than cost. Inventory items related to sale of cartons and closures have a high turnover, hence it is not expected to be negatively impacted by future climate risk costs. Filling machines and spare parts for filling machines have a lower turnover in inventory, however climate risk assessments have not concluded a specific risk related to these machines.Besides the specific assessments mentioned above, no financial climate impacts have been identified as material to the 2023 consolidated Annual Financial Statements or the alternative performance measures (APMs).", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54593": { "value": "Sustainability Framework
Elopak manages the risks related to sustainability. Climate risks, such as the rapidly changing regulatory environ-ment and physical risks are integrated parts of the sustainability framework.
We focus our efforts on monitoring global developments concerning sustainability and/or packaging, such as the EU Taxonomy framework, the Corporate Sustainability due diligence directive, and the EU Packaging & Packaging Waste Directive. See Recycling and recyclability, Appendix: EU Taxonomy, and Appendix: Double materiality assess-ment for more details. The EU Directive 2019/904, also known as Single Use Plastic Directive requires that all single use plastic closures that encompass the carton closures must remain attached during its use, which will come into effect as of July 3, 2024.
At present, Elopak is subject to Plastic Product Tax in the UK from 2022 and Spain from 2023. The implementation in Italy is delayed and will not take effect until mid-2024. We will assess developments of Plastic Product Tax in other countries as relevant. As EU Member States have competence on tax, they may change scope, define payer, or decide if the levy will be paid from national budget, meaning no imposition of plastic tax. It has been assessed that the Plastic Product Tax will have no impact on the outcome of impairment testing.
On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force in the EU. Elopak has a reporting requirement for the year commencing on January 1, 2024 and is developing internal polices and proce-dures to meet the CSRD requirements. There is no current impact on the financial statements.
Since the first draft of the EU Packaging and Packaging Waste Regulation (PPWR) was issued by the EU Commission in November 2022, Elopak has been closely following its developments. Though both the EU Parliament and EU Council issued negotiating positions in 2023, the contents of the regulation remain under discussion until its text is published. While Elopak is continuing to follow the PPWR and its impacts to packaging value chains, there is no impact for the financial statements.
Elopak sustainability program
Elopak\u2019s Group strategy is managed through an annual business planning process where the company defines some key priorities. Each business unit defines its Must-Win-Battles, which are granulated down to individual targets
for employees. This structure entails the entire organization and strategic approach, including the sustainability program. Read more about Elopak\u2019s Group strategy in our annual report.
The sustainability program is an embedded part of the overall group strategy, and responsibilities for various sections are placed throughout all business units. The Group Leadership Team (GLT) is the overall steering committee of the program and reviews the performance on a quarterly basis. The Board of Directors is overall responsible for strategy approval and implementation.
Our sustainability program consists of targets divided into our material topics. The targets are linked to specific strategic initiatives owned by relevant business areas. Specific KPIs are defined to measure and report progress and continuously adapted to reflect our ambitions, some of which refer to the GRI framework or CSRD; others are more specific to our industry and hence self-defined. See Our performance for more details.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:529900BIDQN2AOKV6N08", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } } } }