| 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 and useful lives are reviewed at least annually. The review of residual values and useful lives has taken into consideration the impacts of climate change and the actions we undertake to mitigate and adapt against these climate-related risks. There is no material impact on the income statement for this year. Estimated useful lives by major class of assets are as follows: | ■freehold buildings (no depreciation on freehold land) | | ■leasehold land and buildings | 40 years (or life of lease if less) | | | 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. |
| | | | Property, plant and equipment | | | | | | | | | | | | | | | |
| | | | | € million Land and buildings | € million Plant and equipment | | | | | | | | | | Additions through business combinations | | | | | | | | Disposals and other movements | | | | Hyperinflationary adjustment | | | | Distributed through demerger | | | | Reclassification as held for sale | | | | | | | | | | | | | | | | | | | | Depreciation charge for the year | | | | Disposals and other movements | | | | Hyperinflationary adjustment | | | | Distributed through demerger | | | | Reclassification as held for sale | | | | | | | | | | | | Net book value 31 December 2025(a) | | | | Includes capital expenditures for assets under construction | | | |
(a)Includes €496 million of freehold land. The Group has commitments to purchase property, plant and equipment of €511 million (2024: €694 million). 10A. OWNED ASSETS continued | | | | | € million Land and buildings | € million Plant and equipment | | | | | | | | | | Additions through business combinations | | | | | | | | Disposals and other movements | | | | Hyperinflationary adjustment | | | | Reclassification as held for sale | | | | | | | | | | | | | | | | | | | | Depreciation charge for the year | | | | Disposals and other movements | | | | Hyperinflationary adjustment | | | | Reclassification as held for sale | | | | | | | | | | | | Net book value 31 December 2024(a) | | | | Includes capital expenditures for assets under construction | | | |
(a)Includes €556 million of freehold land. 10B. LEASED ASSETS | | | | | € million Land and buildings | € million Plant and equipment | | | | | | | | | | Additions through business combinations | | | | | | | | Disposals and other movements | | | | Hyperinflationary adjustment | | | | Distributed through demerger | | | | Reclassification as held for sale | | | | | | | | | | | | | | | | | | | | Depreciation/Impairment charge for the year | | | | Disposals and other movements | | | | Distributed through demerger | | | | Reclassification as held for sale | | | | | | | | | | | | Net book value 31 December 2025 | | | |
| | | | | € million Land and buildings | € million Plant and equipment | | | | | | | | | | | | | | Disposals and other movements | | | | Hyperinflationary adjustment | | | | Reclassification as held for sale | | | | | | | | | | | | | | | | | | | | Depreciation/Impairment charge for the year | | | | Disposals and other movements | | | | Reclassification as held for sale | | | | | | | | | | | | Net book value 31 December 2024 | | | |
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 €114 million (2024: €121 million) for short-term leases and €47 million (2024: €57 million) on leases for low-value assets. During the year, the Group recognised income of €11 million (2024: €10 million) from sublet properties. The total cash outflow relating to leases was €380 million (2024: €411 million). Lease liabilities are shown in note 15 on pages 161 and 165.
|