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Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2020
Text Block [Abstract]  
Property, Plant and Equipment
10. Property, plant and equipment
The Group’s property, plant and equipment is comprised of owned assets (note 10A) and leased assets (note 10B). Property, plant and equipment is measured at cost including eligible borrowing costs less depreciation and accumulated impairment losses.
Property, plant and equipment is subject to review for impairment if triggering events or circumstances indicate that this is necessary. If an indication of impairment exists, the asset’s or cash generating unit’s recoverable amount is estimated and any impairment loss is charged to the income statement as it arises.
Owned assets
Owned assets are initially measured at historical cost. Depreciation is provided on a straight-line basis over the expected average useful lives of the assets. Residual values are reviewed at least annually. Estimated useful lives by major class of assets are as follows:
 
•   freehold buildings (no depreciation on freehold land)
  40 years
•   leasehold land and buildings
  40 years (or life of lease if less)
•   plant and equipment
  2–20 years
Leased assets
The cost of a leased asset is measured as the lease liability at inception of the lease contract and other direct costs less any incentives granted by the lessor. The Group has not capitalised leases which are less than 12 months or leases of low value assets. These mainly relate to IT equipment, office equipment, furniture and fitting and other peripheral items. When a lease liability is remeasured, the related lease asset is adjusted by the same amount.
Depreciation is provided on a straight-line basis from the
commencement
date of the lease to the end of the lease term.
 
       
€ million
   € million 
Property, plant and equipment
  Notes   
2020
   2019 
Owned assets
   10A   
 
8,909
 
   10,249 
Leased assets
   10B   
 
1,649
 
   1,813 
Total
       
 
10,558
 
   12,062 
10A. Owned assets
Movements during 2020
  
€ million
Land and buildings
   
€ million
Plant and equipment
   
€ million
Total
 
Cost
               
1 January 2020  
 
4,498
 
  
 
15,844
 
  
 
20,342
 
Additions through business combinations  
 
122
 
  
 
44
 
  
 
166
 
Additions  
 
107
 
  
 
756
 
  
 
863
 
Disposals and other movements  
 
(90
) 
  
 
(901
) 
  
 
(991
) 
Hyperinflationary adjustment  
 
(18
) 
  
 
(27
) 
  
 
(45
) 
Reclassification as held for sale  
 
(19
) 
  
 
(81
) 
  
 
(100
) 
Currency retranslation  
 
(397
) 
  
 
(1,330
) 
  
 
(1,727
) 
   
 
 
   
 
 
   
 
 
 
31 December 2020
  
 
4,203
 
  
 
14,305
 
  
 
18,508
 
   
 
 
   
 
 
   
 
 
 
Accumulated depreciation
               
1 January 2020  
 
(1,479
) 
  
 
(8,614
) 
  
 
(10,093
) 
Depreciation charge for the year  
 
(135
) 
  
 
(1,093
) 
  
 
(1,228
) 
Disposals and other movements  
 
54
 
  
 
814
 
  
 
868
 
Hyperinflationary adjustment  
 
6
 
  
 
20
 
  
 
26
 
Reclassification as held for sale  
 
11
 
  
 
60
 
  
 
71
 
Currency retranslation  
 
103
 
  
 
654
 
  
 
757
 
   
 
 
   
 
 
   
 
 
 
31 December 2020  
 
(1,440
) 
  
 
(8,159
) 
  
 
(9,599
) 
   
 
 
   
 
 
   
 
 
 
Net book value 31 December 2020
(a)
  
 
2,763
 
  
 
6,146
 
  
 
8,909
 
   
 
 
   
 
 
   
 
 
 
Includes capital expenditures for assets under construction  
 
75
 
  
 
660
 
  
 
735
 
   
 
 
   
 
 
   
 
 
 
The Group has commitments to purchase property, plant and equipment of €251 million (2019: €264 million).
 
Movements during 2019
  € million
Land and buildings		   € million
Plant and equipment		   € million
Total		 
Cost
               
1 January 2019
   4,386    15,216    19,602 
Additions through business combinations
   7    28    35 
Additions
   175    1,141    1,316 
Disposals and other movements
   (72)    (649)    (721) 
Hyperinflationary adjustment
   (3)    (28)    (31) 
Reclassification as held for sale
   (63)    (116)    (179) 
Currency retranslation
   68    252    320 
   
 
 
   
 
 
   
 
 
 
31 December 2019
   4,498    15,844    20,342 
   
 
 
   
 
 
   
 
 
 
Accumulated depreciation
               
1 January 2019
   (1,390)    (7,998)    (9,388) 
Depreciation charge for the year
   (134)    (1,022)    (1,156) 
Disposals and other movements
   28    456    484 
Hyperinflationary adjustment
   5    30    35 
Reclassification as held for sale
   38    81    119 
Currency retranslation
   (26)    (161)    (187) 
   
 
 
   
 
 
   
 
 
 
31 December 2019
   (1,479)    (8,614)    (10,093) 
   
 
 
   
 
 
   
 
 
 
Net book value 31 December 2019
(a)
   3,019    7,230    10,249 
   
 
 
   
 
 
   
 
 
 
Includes capital expenditures for assets under construction
   78    872    950 
   
 
 
   
 
 
   
 
 
 
 
(a)
Includes €347 million (2019: €319 million) of
freehold
land.
10B. Leased assets
 
Movements during 2020
  
€ million
Land and buildings
 
  
€ million
Plant and equipment
 
  
€ million
Total
 
Cost
  
   
  
   
  
   
1 January 2020
  
 
2,874
 
  
 
827
 
  
 
3,701
 
Additions through business combinations
  
 
30
 
  
 
3
 
  
 
33
 
Additions
  
 
390
 
  
 
189
 
  
 
579
 
Disposals and other movements
  
 
(436
) 
  
 
(188
) 
  
 
(624
) 
Hyperinflationary adjustment
  
 
(3
) 
  
 
—  
 
  
 
(3
) 
Currency retranslation
  
 
(216
) 
  
 
(63
) 
  
 
(279
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
31 December 2020
  
 
2,639
 
  
 
768
 
  
 
3,407
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accumulated depreciation
  
   
  
   
  
   
1 January 2020
  
 
(1,397
) 
  
 
(491
) 
  
 
(1,888
) 
Depreciation charge for the year
  
 
(315
) 
  
 
(142
) 
  
 
(457
) 
Disposals and other movements
  
 
300
 
  
 
150
 
  
 
450
 
Currency retranslation
  
 
101
 
  
 
36
 
  
 
137
 
 
  
 
 
 
  
 
 
 
  
 
 
 
31 December 2020
  
 
(1,311
) 
  
 
(447
) 
  
 
(1,758
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Net book value 31 December 2020
  
 
1,328
 
  
 
321
 
  
 
1,649
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
Movements during 2019
  
€ million
Land and buildings
 
  
€ million
Plant and equipment
 
  
€ million
Total
 
Cost
  
   
  
   
  
   
1 January 2019
  
 
2,770
 
  
 
816
 
  
 
3,586
 
Additions
  
 
278
 
  
 
174
 
  
 
452
 
Disposals and other movements
  
 
(240
) 
  
 
(180
) 
  
 
(420
) 
Hyperinflationary adjustment
  
 
23
 
  
 
—  
 
  
 
23
 
Currency retranslation
  
 
43
 
  
 
17
 
  
 
60
 
 
  
 
 
 
  
 
 
 
  
 
 
 
31 December 2019
  
 
2,874
 
  
 
827
 
  
 
3,701
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accumulated depreciation
  
   
  
   
  
   
1 January 2019
  
 
(1,241
) 
  
 
(471
) 
  
 
(1,712
) 
Depreciation charge for the year
  
 
(297
) 
  
 
(159
) 
  
 
(456
) 
Disposals and other movements
  
 
154
 
  
 
150
 
  
 
304
 
Hyperinflationary adjustment
  
 
9
 
  
 
—  
 
  
 
9
 
Currency retranslation
  
 
(22
) 
  
 
(11
) 
  
 
(33
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
31 December 2019
  
 
(1,397
) 
  
 
(491
) 
  
 
(1,888
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Net book value 31 December 2019
  
 
1,477
 
  
 
336
 
  
 
1,813
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Our leases mainly comprise of land and buildings and plant and equipment. The Group leases land and buildings for manufacturing, warehouse facilities and office space and also sublets some property. Plant and equipment includes leases for vehicles.
The Group has recognised in the income statement, a charge of €96 million (2019: €97 million) for short-term leases and €77 million (2019: €79 million) on leases for
low-value
assets.
During the year, the Group recognised an income of €19 million (2019: €25 million) from sublet properties.
Cash flows:
The total cash outflows for leases was €525 million (2019: €534 million).
Lease liabilities:
Lease liabilities are shown in note 15 on pages 143 and 147.