Starbucks EMEA Reports Solid Financial Performance in Fiscal Year 2016
Starbucks EMEA, today filed accounts for the year ending October 2, 2016, for the four UK-based subsidiaries, Starbucks EMEA Limited, Starbucks EMEA Holdings Ltd, Starbucks EMEA Investment Limited, and Starbucks International Holdings Limited.
Starbucks EMEA saw turnover increase by 17% to $217m, and cost of sales decreased by 21% to $74m
Starbucks EMEA reported an Operating Profit of more than $56m, an increase of 183% versus prior year
As a result of the new structure royalties are now collected and taxed in the UK for second year following transfer of IP in 2015
Starbucks Coffee Company, EMEA, today filed accounts for the year ending October 2, 2016, for the four UK-based subsidiaries, Starbucks EMEA Limited, Starbucks EMEA Holdings Ltd, Starbucks EMEA Investment Limited, and Starbucks International Holdings Limited, created in 2014 in the re-location of European Headquarters to London. These companies are collectively described below as “Starbucks EMEA”.
Together, these accounts represent the economic activity of Starbucks in the UK, key European markets, and Middle East and Africa, and is the second set of accounts filed from its UK headquarters.
In the year to October 2016, Starbucks EMEA saw turnover increase by 17% to $217m on the back of an increase in store count to 2,642, and expansion into new markets, such as South Africa and Slovenia and continued outperformance in Turkey. Furthermore, increased coffee manufacturing as a result of store and like-for-like growth has contributed materially to the increase in revenues.
Costs remained broadly stable during the period, declining from $166m in 2015 to $161m in 2016.
The combined impact of these factors saw Starbucks EMEA report an Operating Profit of more than $56m, an increase of 183%.
In 2014, Starbucks moved its European Headquarters to the UK, its largest market in the region, as part of a restructuring process to simplify and improve transparency of Starbucks in EMEA. As a result of this restructuring the intellectual property of the Starbucks brand in EMEA has resided in the UK since 2015, enabling the local collection of royalties for the region. This collection of royalty income is subject to corporation tax and has led to a tax charge of $37m over the last two years.
Taxable profit for the year increased 92% to more than $90m, resulting in a 44% increase in corporation tax paid to nearly $22m, an effective tax rate of 24%.
Martin Brok, President for EMEA, Starbucks said, “These results demonstrate the work we have undertaken to bring our company structure in line with the way we run our business today and enhance transparency. The growth we experienced during the period has been driven by expansion into new markets and focus on decreasing costs as we continue to invest in growing our presence across the region. Customers are seeing new and renovated stores, innovation in our food and drinks and a renewed commitment to the environment, and the communities we serve.”
