16. Trade and other receivables
Trade and other receivables mainly comprise trade receivables. The Group has a securitization program under which it sells a portion of its packaging material-related trade receivables without recourse. It also has a small number of minor factoring programs.
Composition of trade and other receivables
The table below provides an overview of the Group’s current and non-current trade and other receivables. Trade receivables that will be sold under the securitization and factoring programs are presented as trade receivables at fair value. Trade receivables that will not be sold are presented as trade receivables at amortized cost.
(In € million) |
|
As of |
|
As of |
|---|---|---|---|---|
Trade receivables at amortized cost |
|
333.7 |
|
301.8 |
Trade receivables at fair value |
|
49.7 |
|
17.8 |
Related party trade receivables |
|
0.6 |
|
0.8 |
Note receivables |
|
– |
|
0.7 |
VAT receivables |
|
57.3 |
|
38.7 |
Other receivables |
|
58.9 |
|
62.9 |
Total current trade and other receivables |
|
500.2 |
|
422.7 |
Non-current receivables |
|
9.1 |
|
13.2 |
Total current and non-current receivables |
|
509.3 |
|
435.9 |
The payment terms for the Group’s trade receivables for packaging material is in general an average of 35 to 60 days (30 to 45 days in the comparative period). The bag-in-box, spouted pouch and chilled carton businesses are not yet fully incorporated in the securitization program.
Trade receivables at amortized cost – loss allowance and ageing
(In € million) |
|
As of |
|
As of |
|---|---|---|---|---|
Current |
|
253.6 |
|
224.5 |
Past due up to 29 days |
|
38.4 |
|
33.8 |
Past due 30 days to 89 days |
|
17.0 |
|
22.0 |
Past due 90 days or more |
|
24.7 |
|
21.5 |
Trade receivables at amortized cost, net of loss allowance |
|
333.7 |
|
301.8 |
Loss allowance |
|
(22.9) |
|
(20.8) |
Trade receivables at amortized cost, gross |
|
356.6 |
|
322.6 |
The loss allowance represents the Group’s estimate of individually impaired trade receivables as well as expected credit losses on trade receivables that are not individually impaired. It primarily relates to trade receivables past due more than 90 days. The expected credit losses are calculated using a provision matrix based on historical credit loss experience and assessments of current and future conditions. The expected loss rate for trade receivables past due more than 90 days that are not individually impaired is between 25% and 100% (with an expected loss rate of 100% when past due more than 270 days). For trade receivables past due 30 to 89 days that are not individually impaired, the expected loss rate is around 5%.
Management believes that the recognized loss allowance sufficiently covers the risk of default based on historical payment behavior and assessments of future expectations of credit losses, including regular analysis of customer credit risk. See also the section “Credit risk” in note 26.
The table below shows the movements in the loss allowance for trade receivables at amortized cost.
(In € million) |
|
2024 |
|
2023 |
|---|---|---|---|---|
Loss allowance as of January 1 |
|
20.8 |
|
9.7 |
Change in loss allowance recognized in profit or loss during the year |
|
2.8 |
|
11.4 |
Foreign currency exchange differences |
|
(0.7) |
|
(0.3) |
Loss allowance as of December 31 |
|
22.9 |
|
20.8 |
The increase in the loss allowance in the year ended December 31, 2023 was mainly due to additional loss allowances in the Middle East and South America.
Securitization program
The Group has an asset-backed securitization program under which it sells without recourse a portion of its aseptic carton sleeves-related trade receivables. The securitization program was expanded in 2023 to also cover a portion of the packaging material-related trade receivables from the bag-in-box and spouted pouch businesses.
The trade receivables are sold to a special purpose entity. This entity is not controlled by the Group and therefore not consolidated. The trade receivables sold qualify for derecognition by the Group. The Group transfers the contractual rights to the cash flows of the trade receivables at their nominal value less a retained reserve in exchange for cash. The net amount is presented as part of other current receivables and represents the Group’s right to receive this amount once the sold trade receivables have been settled by the customers.
Trade receivables sold under the securitization program amounted to €224.3 million as of December 31, 2024 (€227.7 million as of December 31, 2023), of which €201.0 million (€194.8 million as of December 31, 2023) has been derecognized and €23.3 million (€32.9 million as of December 31, 2023), representing the retained reserve, is presented as part of other current receivables. The retained reserve represents the Group’s maximum exposure to any losses in respect of trade receivables previously sold under the program. The securitization expense under the asset-backed securitization program amounted to €12.0 million in the year ended December 31, 2024 (€9.2 million as of December 31, 2023) and is presented as part of other finance expenses (see note 24).
Factoring programs
The Group has a small number of minor factoring programs under which trade receivables sold by the Group qualify for derecognition. The factored amounts totaled €37.7 million as of December 31, 2024 (€24.6 million as of December 31, 2023).
Accounting policy
Trade and other receivables at amortized cost
Trade and other receivables that will not be sold under the Group’s securitization and factoring programs are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these receivables are measured at amortized cost using the effective interest method less a loss allowance. Any subsequent recoveries of amounts previously written off relating to individually impaired trade receivables are credited to the same line item in profit or loss where the original write-off was recognized. The Group holds these trade receivables to collect the contractual cash flows, and these cash flows are solely payments of principal and interest on the principal outstanding.
Trade receivables at fair value through profit or loss
Trade receivables that will be sold under the Group’s securitization and factoring programs are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are recognized at fair value. These trade receivables are sold and derecognized shortly after their initial recognition in the statement of financial position. Any change in fair value is recognized through profit or loss. The objective of these trade receivables is to realize the cash flows primarily through selling them.
Derecognition of trade receivables
A financial asset is derecognized when the contractual rights to the cash flows from the asset have expired, when the contractual rights to receive the cash flows have been transferred and the Group has transferred substantially all of the risks and rewards of ownership, or when the Group transfers a financial asset but retains the contractual rights to receive the cash flows but at the same time assumes a contractual obligation to pay the cash flows to another recipient (and remits the cash flows to the other recipient without material delay once it has collected an amount from the original asset, and is also prohibited to sell or pledge the original asset). Any interest in such a derecognized financial asset that is retained by the Group is recognized as a separate asset or liability.