Revenue derives from the sale of goods (i.e. sleeves, closures, board and filling lines) and the provision of after-market services and is presented net of returns, trade discounts, volume rebates and other customer incentives. The Group also presents income from the deployment of filling lines under contracts that qualify to be accounted for as operating leases and revenue under royalty agreements as part of revenue.

Approximately 87% of the Group’s revenue from its offering of aseptic carton packaging solutions relates to the sale of sleeves and closures. The remaining 13% consists of revenue relating to filling lines and to servicing of the Group’s deployed filling lines.

Composition of revenue

The Group has recognised the following amounts of revenue.

(In € million)

 

Year ended
31 Dec. 2019

 

Year ended
31 Dec. 2018

Revenue from sale and service contracts (including royalty agreements)

 

1,691.8

 

1,597.9

Revenue from filling line contracts accounted for as operating leases

 

92.1

 

78.2

Total revenue

 

1,783.9

 

1,676.1

of which

 

 

 

 

Core revenue

 

1,766.9

 

1,644.3

Core revenue represents revenue generated from the Group’s core activities and excludes revenue from sales of folding box board, which amounted to €17.0 million for the year ended 31 December 2019 and €31.8 million for the year ended 31 December 2018. Core revenue is not a defined performance measure in IFRS (see further note 9).

The Group’s total revenue is further disaggregated by major product/service lines in the following table. Filling line revenue is composed of revenue from the deployment of filling lines under contracts that qualify to be accounted for as operating leases and from the sale of filling lines (see note 5.5.2). Service revenue relates to after-market services in relation to the Group’s filling lines. Revenue under royalty agreements and from the sale of folding box board and liquid paper board is included in other revenue.

(In € million)

 

Year ended
31 Dec. 2019

 

Year ended
31 Dec. 2018

Revenue from sale of sleeves and closures

 

1,472.7

 

1,378.2

Filling line revenue

 

111.9

 

99.2

Service revenue

 

113.4

 

99.3

Other revenue

 

85.9

 

99.4

Total revenue

 

1,783.9

 

1,676.1

The Group’s three segments (EMEA, APAC and Americas) are providing the same aseptic carton packaging solutions, comprising filling machines, sleeves and closures as well as after-market services. The split of revenue between revenue from sale of sleeves and closures, filling line revenue and service revenue is broadly the same at Group level, between the Group’s three segments and over recent years. Other revenue is mainly divided between EMEA and APAC. See note 7 for further information about the Group’s segments.

Notes 18 and 20 include information about the Group’s liabilities relating to various incentive programmes, advance payments from customers and deferred revenue, which had or will have an impact on the amount of revenue recognised.

Accounting policy, significant judgements and estimates

Revenue from sale of sleeves and other related products, deployment of filling lines under contracts accounted for as sales contracts and provision of service is measured at the fair value of the consideration received or receivable net of returns, trade discounts, volume rebates and other customer sales incentives.

Revenue is recognised when the Group transfers control over a product or service to a customer. Transfer of control varies depending on the individual contract terms. Revenue from sale of sleeves and other related products and deployment of filling lines under contracts accounted for as sales contracts is recognised at a point in time while revenue from service contracts is recognised over time.

Lease payments for filling lines that are deployed under operating lease contracts are recognised on a straight-line basis over the lease period. The payment (i.e. the sales price) for the use of filling lines that are deployed under sales contracts that qualify to be accounted for as operating leases is recognised as a deferred revenue liability in the statement of financial position, and recognised as revenue on a straight-line basis over the shorter of the period over which the customer relation is expected to last and the ten years useful life of a filling line. The control and significant risks and rewards of ownership are retained by the Group in respect of such sales contracts (see further note 5.5.2).

When sales incentives are offered to customers, only the amount of revenue that is highly probable of not being reversed is recognised. The amount of sales incentives expected to be earned or taken by customers in conjunction with incentive programmes is therefore estimated and deducted from revenue. Estimates in respect of the incentives are based on historical and current market trends, which are affected by the business seasonality and competitiveness of promotional programmes being offered. Estimates are reviewed quarterly for possible revisions.