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6 Revenue

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 86% of the Group’s revenue from its offering of aseptic carton packaging solutions relates to the sale of sleeves and closures in the year ended 31 December 2021 (86% in the year ended 31 December 2020). The remaining 14% consists of revenue relating to filling lines and to servicing of the Group’s deployed filling lines (14% in the year ended 31 December 2020).

Composition of revenue

(In € million)

 

Year ended
31 Dec. 2021

 

Year ended
31 Dec. 2020

Revenue from sale and service contracts (including royalty agreements)

 

1,932.5

 

1,716.2

Revenue from filling line contracts accounted for as operating leases

 

129.3

 

99.9

Total revenue

 

2,061.8

 

1,816.1

of which

 

 

 

 

Core revenue

 

2,046.8

 

1,796.4

Core revenue represents revenue generated from the Group’s core activities and excludes revenue from sales of folding box board, which amounted to €15.0 million for the twelve months ended 31 December 2021 and €19.7 million for the twelve months ended 31 December 2020. Core revenue is not a defined performance measure in IFRS (see note 9). Since the Group’s acquisition of the remaining shares of its joint ventures in the Middle East on 25 February 2021, the revenue of the former joint ventures is fully consolidated and included in core revenue (see notes 7 and 27).

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. Service revenue relates to after-market services in relation to the Group’s filling lines. Revenue under royalty agreements and from sale of folding box board and liquid paper board is included in other revenue.

(In € million)

 

Year ended
31 Dec. 2021

 

Year ended
31 Dec. 2020

Revenue from sale of sleeves and closures

 

1,758.6

 

1,498.8

Filling line revenue

 

141.1

 

121.0

Service revenue

 

140.1

 

119.0

Other revenue

 

22.0

 

77.3

Total revenue

 

2,061.8

 

1,816.1

Other revenue has decreased compared to the comparative period. As a consequence of the acquisition of the remaining shares of the joint ventures in the Middle East on 25 February 2021, the royalty agreement with the former joint ventures was terminated. The Group’s sales of liquid paper board are mainly to the former joint ventures and are since the acquisition intra-group sales rather than third-party sales. Sales of folding box board have ceased as the Group sold its paper mill in June 2021 (see note 26).

The Group’s four segments provide the same aseptic carton packaging solutions, comprising filling machines, sleeves and closures as well as after-market services. Note 7 includes information about the split of the different types of revenue between the 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 sale 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 sale price) for the use of filling lines that are deployed under sale 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 relationship is expected to last and the ten-year estimated useful life of a filling line. The control and significant risks and rewards of ownership are retained by the Group in respect of such sale contracts (see further note 5.5.2).

When sales incentives are offered to customers, only the amount of revenue that is highly probable not to be 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 sales trends, which are affected by the business seasonality and competitiveness of promotional programmes being offered. Estimates are reviewed quarterly for possible revisions.