- First-quarter diluted earnings per
share were 40 cents on a reported basis or 42 cents on a comparable
basis, including a negative currency translation impact of 11
cents.
- Net sales were $1.6 billion, down 13
percent on a reported basis or up 4 percent on a currency-neutral
basis; comparable volume grew 1 percent.
- Reported operating income was $158
million; comparable operating income was $165 million, down 15
percent or up 4 percent on a currency-neutral basis.
- CCE affirms its full-year guidance
for 2015, including comparable and currency-neutral diluted
earnings per share growth in a range of 6 percent to 8 percent,
with slightly positive net sales and operating income
growth.
Regulatory News:
Coca-Cola Enterprises, Inc. (NYSE: CCE) (Euronext Paris: CCE)
today reported first-quarter 2015 operating income of $158 million
or $165 million on a comparable basis. In the quarter, diluted
earnings per share were 40 cents on a reported basis or 42 cents on
a comparable basis. Currency translation had a negative impact of
11 cents on comparable diluted earnings per share.
For the first quarter, net sales totaled $1.6 billion, down 13
percent from the same quarter a year ago. On a currency-neutral
basis, net sales increased 4 percent.
“Our first-quarter results reflect volume growth in Great
Britain, a continued soft consumer environment in our territories,
our focus on managing all aspects of our business effectively, and
the benefit of four extra selling days,” said John F. Brock,
chairman and chief executive officer. “As we enter the key summer
selling season, we are working diligently to improve our growth
outlook through innovation, marketing initiatives, and by
maximizing our effectiveness.
“Each of our efforts is directed toward our ultimate goal:
continuing to build shareowner value.”
OPERATING REVIEW
During the first quarter, comparable volume grew 1 percent.
Total volume was driven by mid-single-digit growth in still brands,
with flat volume in Coca-Cola trademark products. Volume in Great
Britain grew 8½ percent, reflecting solid growth in Coca-Cola
trademark products and the impact of cycling weak results in the
same quarter a year ago. Volume declined 3½ percent on the
Continent, compared to growth of 3½ percent in the first quarter of
last year.
For the first quarter, net pricing per case declined 2 percent
and cost of sales per case declined 2 percent. Operating expenses
increased 3 percent, in part due to the four extra selling days.
These figures are comparable and currency neutral.
“We continue to work closely with our customers to strengthen
our execution, create value, and drive growth,” said Hubert
Patricot, executive vice president and president, European Group.
“Together, we are focused on building on our successful innovation,
which includes such products as Coca-Cola Life, and implementing
our new One Brand strategy, which links our four core Coca-Cola
trademark products.
“In addition, we are providing strong execution for our
marketing initiatives, which include commemorating the 100th
anniversary of the contour Coca-Cola bottle and the 2015 Rugby
World Cup.”
FULL-YEAR 2015 OUTLOOK
For 2015, CCE continues to expect diluted earnings per share to
grow in a range of 6 percent to 8 percent on a comparable and
currency-neutral basis. Based on recent rates, currency translation
would negatively impact full-year 2015 earnings per share by just
over 18 percent.
Net sales and operating income are each expected to achieve
slightly positive growth on a comparable and currency-neutral
basis.
The company expects 2015 free cash flow in a range of $600
million to $650 million including the expected negative impact of
currency translation based on recent rates. Capital expenditures
are expected to be approximately $325 million. Weighted average
cost of debt is expected to be approximately 3 percent, and the
comparable effective tax rate for 2015 is expected to be in a range
of 27 percent to 28 percent.
CCE expects to repurchase approximately $600 million of its
shares in 2015. During the first quarter, the company repurchased
approximately $300 million of its shares. These plans may be
adjusted depending on economic, operating, or other factors,
including acquisition opportunities.
CONFERENCE CALL
CCE will host a conference call with investors and analysts
today at 10 a.m. EDT. The call can be accessed through the
company’s website at www.cokecce.com.
ABOUT CCE
Coca-Cola Enterprises, Inc. is the leading Western European
marketer, producer, and distributor of non-alcoholic ready-to-drink
beverages and one of the world’s largest independent Coca-Cola
bottlers. CCE is the sole licensed bottler for products of The
Coca-Cola Company in Belgium, continental France, Great Britain,
Luxembourg, Monaco, the Netherlands, Norway, and Sweden. CCE
operates with a local focus and has 17 manufacturing sites across
Europe, where the company manufactures nearly 90 percent of its
products in the markets in which they are consumed. Corporate
responsibility and sustainability is core to CCE’s business, and
the company has been recognized by leading organizations in North
America and Europe for its progress in water use reduction, carbon
footprint reduction, and recycling initiatives. For more
information about CCE, please visit www.cokecce.com and follow the
company on Twitter at @cokecce.
FORWARD-LOOKING STATEMENTS
Included in this news release are forward-looking management
comments and other statements that reflect management’s current
outlook for future periods. As always, these expectations are based
on currently available competitive, financial, and economic data
along with our current operating plans and are subject to risks and
uncertainties that could cause actual results to differ materially
from the results contemplated by the forward-looking statements.
The forward-looking statements in this news release should be read
in conjunction with the risks and uncertainties discussed in our
filings with the Securities and Exchange Commission (“SEC”),
including our most recent Form 10-K and other SEC filings.
___________________________
A reconciliation of reported (GAAP) to comparable (non-GAAP)
information and other non-GAAP measures used by management in
managing the business are detailed on the following pages of this
release.
COCA-COLA ENTERPRISES, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited; in millions,
except per share data) First Quarter
2015 2014 Net sales $ 1,631 $ 1,870
Cost of sales 1,063 1,220 Gross profit 568 650
Selling, delivery, and administrative expenses 410 466
Operating income 158 184 Interest expense, net 30 28 Other
nonoperating income (expense) 2 (1 ) Income before income
taxes 130 155 Income tax expense 34 40 Net income $
96 $ 115 Basic earnings per share $ 0.41 $
0.45 Diluted earnings per share $ 0.40 $ 0.44
Dividends declared per share $ 0.28 $ 0.25 Basic
weighted average shares outstanding 235 255 Diluted
weighted average shares outstanding 240 260
COCA-COLA ENTERPRISES, INC. CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (Unaudited; in
millions) First Quarter 2015
2014 Net income $ 96 $ 115
Components of other
comprehensive (loss) income: Currency translations Pretax
activity, net (279 ) 11 Tax effect — — Currency
translations, net of tax (279 ) 11 Net investment hedges Pretax
activity, net 152 (2 ) Tax effect (53 ) 1 Net investment
hedges, net of tax 99 (1 ) Cash flow hedges Pretax activity, net (2
) (3 ) Tax effect — 1 Cash flow hedges, net of tax (2
) (2 ) Pension plan adjustments Pretax activity, net 7 6 Tax effect
(2 ) (1 ) Pension plan adjustments, net of tax 5 5
Other comprehensive (loss) income, net of tax (177 ) 13
Comprehensive (loss) income $ (81 ) $ 128
COCA-COLA ENTERPRISES, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited; in millions)
April 3, December 31, 2015
2014 ASSETS Current: Cash and cash equivalents
$ 301 $ 223 Trade accounts receivable 1,475 1,514 Amounts
receivable from The Coca-Cola Company 63 67 Inventories 358 388
Other current assets 320 268 Total current assets
2,517 2,460 Property, plant, and equipment, net 1,957 2,101
Franchise license intangible assets, net 3,423 3,641 Goodwill 94
101 Other noncurrent assets 199 240 Total assets $
8,190 $ 8,543
LIABILITIES Current:
Accounts payable and accrued expenses $ 1,770 $ 1,872 Amounts
payable to The Coca-Cola Company 97 104 Current portion of debt 523
632 Total current liabilities 2,390 2,608 Debt, less
current portion 3,678 3,320 Other noncurrent liabilities 189 207
Noncurrent deferred income tax liabilities 917 977
Total liabilities 7,174 7,112
SHAREOWNERS’ EQUITY Common
stock 3 3 Additional paid-in capital 3,990 3,958 Reinvested
earnings 2,021 1,991 Accumulated other comprehensive loss (891 )
(714 ) Common stock in treasury, at cost (4,107 ) (3,807 ) Total
shareowners’ equity 1,016 1,431 Total liabilities and
shareowners’ equity $ 8,190 $ 8,543
COCA-COLA ENTERPRISES, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited; in millions)
First Quarter 2015 2014
Cash Flows from Operating Activities: Net income $ 96 $ 115
Adjustments to reconcile net income to net cash derived from
operating activities: Depreciation and amortization 71 75
Share-based compensation expense 8 8 Deferred income tax benefit (9
) (4 ) Pension expense less than contributions (5 ) (2 ) Net
changes in assets and liabilities (3 ) (125 ) Net cash derived from
operating activities 158 67
Cash Flows from
Investing Activities: Capital asset investments (98 ) (88 )
Capital asset disposals — 12 Other investing activities, net (9 ) —
Net cash used in investing activities (107 ) (76 )
Cash
Flows from Financing Activities: Net change in commercial paper
(109 ) 402 Issuances of debt 527 — Payments on debt (3 ) (104 )
Shares repurchased under share repurchase programs (313 ) (289 )
Dividend payments on common stock (65 ) (63 ) Other financing
activities, net 10 6 Net cash derived from (used in)
financing activities 47 (48 ) Net effect of currency
exchange rate changes on cash and cash equivalents (20 ) —
Net Change in Cash and Cash Equivalents 78 (57 )
Cash and
Cash Equivalents at Beginning of Period 223 343
Cash and Cash Equivalents at End of Period $ 301 $
286
COCA-COLA ENTERPRISES, INC.
RECONCILIATION OF GAAP TO NON-GAAP (a) (Unaudited; in
millions, except per share data which is calculated prior to
rounding) First-Quarter 2015
Selling, delivery, and
Diluted administrative Operating Income tax earnings per Cost of
sales expenses income expense Net income share
Reported (GAAP)
(b) $1,063 410 158 34 $96
$0.40 Items Impacting Comparability: Mark-to-market effects
(c) — 2 (2 ) — (2 ) (0.01 ) Restructuring charges (d) — (9 )
9 2 7 0.03
Comparable (non-GAAP)
$1,063 403 165 36
$101 $0.42 Diluted Weighted
Average Shares Outstanding 240
First-Quarter 2014 Selling, delivery, and Diluted
administrative Operating Income tax earnings per Cost of sales
expenses income expense Net income share
Reported (GAAP) (b)
$1,220 466 184 40 $115
$0.44 Items Impacting Comparability: Mark-to-market effects
(c) (1 ) (1 ) 2 1 1 — Restructuring charges (d) — (8 ) 8
3 5 0.02
Comparable (non-GAAP)
$1,219 457 194 44
$121 $0.46 Diluted Weighted
Average Shares Outstanding 260
___________________________
(a) These non-GAAP measures are provided to allow investors
to more clearly evaluate our operating performance and business
trends. Management uses this information to review results
excluding items that are not necessarily indicative of ongoing
results. The adjusting items are based on established defined terms
and thresholds and represent all material items management
considered for year-over-year comparability. (b) As reflected in
CCE's U.S. GAAP Condensed Consolidated Financial Statements. (c)
Amounts represent the net out of period mark-to-market impact of
non-designated commodity hedges. (d) Amounts represent nonrecurring
restructuring charges.
COCA-COLA ENTERPRISES, INC.
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT INCOME (a)
(Unaudited; in millions)
First-Quarter 2015 Europe
Corporate Operating income Reported
(GAAP) (b) $190 $(32 ) $158 Items
Impacting Comparability: Mark-to-market effects (c) — (2 ) (2)
Restructuring charges (d) 9 — 9
Comparable (non-GAAP)
$199 $(34 ) $165
First-Quarter 2014 Europe Corporate
Operating income Reported (GAAP) (b) $224
$(40 ) $184 Items Impacting Comparability:
Mark-to-market effects (c) — 2 2 Restructuring charges (d) 8 —
8
Comparable (non-GAAP) $232 $(38
) $194
___________________________
(a) These non-GAAP measures are provided to allow investors
to more clearly evaluate our operating performance and business
trends. Management uses this information to review results
excluding items that are not necessarily indicative of ongoing
results. The adjusting items are based on established defined terms
and thresholds and represent all material items management
considered for year-over-year comparability. (b) As reflected in
CCE's U.S. GAAP Condensed Consolidated Financial Statements. (c)
Amounts represent the net out of period mark-to-market impact of
non-designated commodity hedges. (d) Amounts represent nonrecurring
restructuring charges.
COCA-COLA ENTERPRISES, INC.
CURRENCY IMPACT ON OPERATING MEASURES (a) (Unaudited;
percentages rounded to the nearest 0.5 percent)
% Change vs. Prior Year GAAP (b)
NON-GAAP (c)
Currencyimpact on
Reportedcurrency-
Currencyimpact on
Comparablecurrency-
First-Quarter
2015
Reported
reported
neutral
Comparable
comparable
neutral
Net sales (13.0 )% (17.0 )% 4.0 % (13.0 )% (17.0 )% 4.0 % Selling,
delivery, and administrative expenses (12.0 ) (14.5 ) 2.5 (12.0 )
(15.0 ) 3.0 Operating income (14.0 ) (19.5 ) 5.5 (15.0 ) (19.0 )
4.0 Diluted earnings per share (9.0 ) (20.5 )
11.5 (8.5 ) (23.5 )
15.0
First-Quarter
2014
Net sales 1.0 %
3.5 % (2.5 )% 1.0 % 3.5 % (2.5 )% Selling, delivery, and
administrative expenses (11.0 ) 2.5 (13.5 ) (0.5 ) 3.0 (3.5 )
Operating income 66.0 10.5 55.5 8.0 6.0 2.0 Diluted earnings per
share 109.5 14.5 95.0
18.0 7.5
10.5
___________________________
(a) Currency impact is calculated by converting current year
results at prior year exchange rates. (b) Calculated based on CCE's
U.S. GAAP Condensed Consolidated Financial Statements. (c)
These non-GAAP measures are provided to
allow investors to more clearly evaluate our operating performance
and business trends. Management uses this information to review
results excluding items that are not necessarily indicative of
ongoing results. The adjusting items are based on established
defined terms and thresholds and represent all material items
management considered for year-over-year comparability. See the
Reconciliation of GAAP to non-GAAP tables in this release for a
list of all items impacting comparability.
COCA-COLA ENTERPRISES, INC. RECONCILIATION OF
NON-GAAP MEASURES (Unaudited; in millions, except
percentages which are rounded to the nearest 0.5 percent)
First-Quarter % Change vs. Prior
Year 2015 2014
Net Sales Per
Case
Change in net sales per case (18.0 )% 4.5 % Impact of
excluding post mix, non-trade, and other — 0.5 Impact of currency
exchange rate changes 16.0 (4.0 )
Currency-Neutral Bottle and Can Net Pricing Per Case (a)
(2.0 )% 1.0 %
Cost of Sales Per
Case
Change in cost of sales per case (18.0
)% 3.5 % Impact of excluding post mix, non-trade, and other — 0.5
Impact of currency exchange rate changes 16.0
(4.0 )
Currency-Neutral Bottle and Can Cost of Sales Per Case
(a) (2.0 )% — %
Physical Case
Bottle and Can Volume
Change in volume 6.5 % (3.0 )% Impact
of selling day shift (5.5 ) 1.5
Comparable
Bottle and Can Volume (b) 1.0 %
(1.5 )% First Quarter
Reconciliation of
Free Cash Flow (c)
2015 2014 Net cash derived from
operating activities $ 158 $ 67 Less: capital asset investments (98
) (88 ) Add: capital asset disposals — 12
Free Cash Flow $ 60
$ (9 ) April 3,
December 31,
Reconciliation of
Net Debt (d)
2015 2014 Current portion of debt $ 523
$ 632 Debt, less current portion 3,678 3,320 Less: cash and cash
equivalents (301 ) (223 )
Net Debt $
3,900 $ 3,729
___________________________
(a) The non-GAAP financial measures "Currency-Neutral Bottle
and Can Net Pricing Per Case" and "Currency-Neutral Bottle and Can
Cost of Sales Per Case" are used to more clearly evaluate bottle
and can pricing and cost trends in the marketplace. These measures
exclude items not directly related to bottle and can pricing or
cost and currency exchange rate changes. (b) The non-GAAP measure
"Comparable Bottle and Can Volume" is used to analyze the
performance of our business on a constant period basis. There were
four additional selling days in the first quarter of 2015 versus
the first quarter of 2014, and one less selling day in the first
quarter of 2014 versus the first quarter of 2013. (c) The non-GAAP
measure "Free Cash Flow" is provided to focus management and
investors on the cash available for debt reduction, dividend
distributions, share repurchase, and acquisition opportunities. (d)
The non-GAAP measure "Net Debt" is used to more clearly evaluate
our capital structure and leverage.
Coca-Cola Enterprises, Inc.Investor RelationsThor Erickson, +1
(678) 260-3110orMedia RelationsFred Roselli, +1 (678) 260-3421
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