12. Property, plant and equipment

Property, plant and equipment (“PP&E”) is mainly composed of filling lines that are deployed at customers’ sites under contracts that qualify to be accounted for as operating leases (see note 5.5.2) and the Group’s plant and production equipment. PP&E also includes work in progress, which relates to construction of filling machines and to filling lines and other related equipment under installation at customers’ sites as well as to construction of various types of production equipment used by the Group in its production and assembly plants. The Group is a lessor in respect of its filling lines and other related equipment deployed with its customers.

Composition of PP&E

Composition of PP&E

(In € million)

 

Land

 

Buildings

 

Plant and equipment

 

Work in progress

 

Filling
lines

 

Total

Cost

 

106.9

 

285.3

 

1,068.8

 

366.0

 

1,431.5

 

3,258.5

Accumulated depreciation and impairment losses

 

(6.6)

 

(91.8)

 

(617.7)

 

 

(747.0)

 

(1,463.1)

Carrying amount as of December 31, 2023

 

100.3

 

193.5

 

451.1

 

366.0

 

684.5

 

1,795.4

Cost

 

104.9

 

291.2

 

1,231.9

 

299.2

 

1,655.5

 

3,582.7

Accumulated depreciation and impairment losses

 

(4.3)

 

(111.9)

 

(698.8)

 

(2.0)

 

(891.7)

 

(1,708.7)

Carrying amount as of December 31, 2024

 

100.6

 

179.3

 

533.1

 

297.2

 

763.8

 

1,874.0

Carrying amount as of January 1, 2023

 

103.4

 

181.4

 

378.4

 

364.2

 

640.4

 

1,667.8

Additions

 

 

1.0

 

29.6

 

334.5

 

22.7

 

387.8

Disposals

 

 

 

(0.8)

 

 

 

(0.8)

Depreciation

 

 

(15.0)

 

(70.4)

 

 

(128.8)

 

(214.2)

Impairment losses

 

 

 

(0.5)

 

 

(4.3)

 

(4.8)

Transfers

 

 

29.8

 

127.5

 

(323.1)

 

167.8

 

2.0

Effect of movements in exchange rates

 

(3.1)

 

(3.7)

 

(12.7)

 

(9.6)

 

(13.3)

 

(42.4)

Carrying amount as of December 31, 2023

 

100.3

 

193.5

 

451.1

 

366.0

 

684.5

 

1,795.4

Carrying amount as of January 1, 2024

 

100.3

 

193.5

 

451.1

 

366.0

 

684.5

 

1,795.4

Additions

 

 

0.6

 

38.6

 

241.0

 

25.0

 

305.2

Disposals

 

(0.3)

 

(0.3)

 

 

(0.6)

 

 

(1.2)

Depreciation

 

 

(15.1)

 

(62.0)

 

 

(142.8)

 

(219.9)

Impairment losses

 

 

(4.6)

 

(7.2)

 

(2.0)

 

(3.6)

 

(17.4)

Transfer to assets held for sale

 

 

(4.8)

 

 

 

 

(4.8)

Other transfers

 

 

8.8

 

101.6

 

(309.7)

 

195.4

 

(3.9)

Effect of movements in exchange rates

 

0.6

 

1.2

 

11.0

 

2.5

 

5.3

 

20.6

Carrying amount as of December 31, 2024

 

100.6

 

179.3

 

533.1

 

297.2

 

763.8

 

1,874.0

Notes 7 and 11 include further information about the Group’s capital expenditure with regard to its production equipment and filling lines and other related equipment. See note 9 for information about the chilled carton production plant in Shanghai that is classified as held for sale as of December 31, 2024.

Depreciation and impairment of PP&E

Depreciation of PP&E is recognized in the following components in the statement of profit or loss and other comprehensive income.

Depreciation of PP&E

(In € million)

 

Year ended
Dec. 31, 2024

 

Year ended
Dec. 31, 2023

Cost of sales

 

211.1

 

202.9

Selling, marketing and distribution expenses

 

1.7

 

1.7

General and administrative expenses

 

7.1

 

9.6

Total depreciation

 

219.9

 

214.2

See note 9 for information about impairment losses of €8.1 million recognized as part of cost of sales in the year ended December 31, 2024 in connection with the transfer of the Group’s chilled carton production in China to a new location.

Capital expenditure commitments

As of December 31, 2024, the Group had entered into contracts to incur capital expenditure of €94.2 million for the acquisition of PP&E (€140.7 million as of December 31, 2023). The commitments relate to filling machine and other related equipment assembly, certain downstream equipment and various equipment for the Group’s production plants and similar facilities.

Accounting policy, significant judgments and estimates

Items of PP&E are measured at cost less accumulated depreciation and accumulated impairment losses. Gains and losses on disposals of items of PP&E are recognized in profit or loss as part of other income or expenses.

The cost of an acquired or self-constructed item of PP&E includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. The cost of the Group’s filling lines and other related equipment also includes the estimated cost of dismantling, to the extent such an amount is recognized as a provision. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group and the cost can be measured reliably. The costs of the day-to-day servicing of PP&E are recognized in profit or loss as incurred.

Items of PP&E are depreciated on a straight-line basis over their estimated useful lives, with depreciation generally recognized in profit or loss. Land is not depreciated. The estimated useful lives for the current and comparative periods are as follows:

  • Buildings 15 to 40 years
  • Plant and equipment:
    • Production-related equipment and machinery 4 to 25 years
    • Furniture and fixtures 3 to 8 years
  • Filling lines (leased assets, SIG as lessor) 10 years

The Group as lessor – filling lines

The Group mainly deploys aseptic carton filling lines under contracts that qualify to be accounted for as operating leases (see note 5.5.2 for additional details). These filling lines are measured at cost and depreciated from the deployment date over their estimated useful life of ten years and tested for impairment when there is an impairment indicator.

Impairment of PP&E

Items of PP&E are reviewed regularly and at least annually to identify whether there is an impairment indicator. See note 5.5.3 for further details.

A change in the Group’s intended use of certain assets, such as a decision to rationalize production locations, may trigger a future impairment. Value in use calculations require management to estimate the future cash flows expected to arise from an individual asset or CGU and to determine a suitable discount rate to calculate present value.

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