6. Revenue
Revenue derives from the sale of goods such as carton sleeves, closures, bag-in-box and spouted pouches with associated materials (barrier film and fitments), filling lines and other related equipment as well as the provision of after-market services. Revenue is presented net of returns, trade discounts, volume rebates and other customer incentives. In addition, the Group presents income from the deployment of filling lines and other related equipment under contracts that qualify to be accounted for as operating leases as part of revenue.
Composition of revenue
(In € million) |
|
Year ended |
|
Year ended |
|---|---|---|---|---|
Revenue from sale and service contracts |
|
2,621.0 |
|
1,932.5 |
Revenue from filling line and other related equipment contracts accounted for as operating leases |
|
158.9 |
|
129.3 |
Total revenue |
|
2,779.9 |
|
2,061.8 |
The Group’s total revenue is disaggregated by major product/service line in the table below.
(In € million) |
|
Year ended |
|
Year ended |
|---|---|---|---|---|
Revenue from the sale of carton, bag-in-box and spouted pouches |
|
2,415.1 |
|
1,758.6 |
Filling line and other related equipment revenue |
|
200.3 |
|
141.1 |
Service revenue |
|
164.0 |
|
140.1 |
Other revenue |
|
0.5 |
|
22.0 |
Total revenue |
|
2,779.9 |
|
2,061.8 |
Revenue from the sale of carton, bag-in-box and spouted pouches is mainly composed of revenue from the sale of aseptic carton sleeves and closures. Since the acquisitions of Scholle IPN on 1 June 2022 and Evergreen Asia on 2 August 2022, this line item also includes revenue from the sale of bag-in-box and spouted pouches as well as carton sleeves for the chilled market in Asia.
Filling line and other related equipment revenue is composed of revenue from the deployment of equipment under contracts that qualify to be accounted for as operating leases and from the sale of equipment.
Service revenue relates to after-market services in relation to the Group’s equipment.
Other revenue for the year ended 31 December 2021 included revenue under royalty agreements and from the sales of liquid paper board and folding box board. 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, since the acquisition, are 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 sale of the paper mill has resulted in the Group no longer making a distinction between revenue from core and non-core activities. This has been reflected in the presentation of revenue in the comparative period.
The Group’s revenue is disaggregated by type of business in the table below.
(In € million) |
|
Year ended |
|
Year ended |
|---|---|---|---|---|
Revenue from the carton business |
|
2,417.3 |
|
2,061.8 |
Revenue from the bag-in-box and spouted pouch business |
|
362.6 |
|
– |
Total revenue |
|
2,779.9 |
|
2,061.8 |
Revenue from the carton business relates to the provision of aseptic carton packaging solutions and, since the acquisition of Evergreen Asia, chilled carton packaging solutions in Asia. Revenue from the bag-in-box and spouted pouch business relates to the provision of packaging solutions by Scholle IPN.
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 carton, bag-in-box and spouted pouches with associated products, deployment of filling lines and other related equipment under contracts accounted for as sale 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 the sale of carton, bag-in-box and spouted pouches with associated products as well as deployment of filling lines and other related equipment 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 and other related equipment that are deployed under operating lease contracts are recognised on a straight-line basis over the lease period. The payment (ie. the sale price) for the use of aseptic carton 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.