Coca-Cola Enterprises, Inc. (NYSE:CCE) Q4 2015 Earnings Conference Call - Final Transcript

Feb 11, 2016 • 10:00 am ET


Coca-Cola Enterprises, Inc. (NYSE:CCE) Q4 2015 Earnings Conference Call - Final Transcript


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Q & A

(Operator Instructions) Ali Dibadj, Bernstein.

Ali Dibadj

I want to drill down on two things. One is, clearly from a topline perspective, you're maintaining this semi-positive comparable and currency-neutral sales growth, but you haven't gotten there over the past several years, three years at least, here. And 2015 was tough and you still say the environment is going to be tough. I'm trying to get a better understanding of how you're actually going to get that inflection to happen in 2016, in that context.

Is it energy drinks? It's been pretty volatile on energy drinks. If you can give us a sense of the growth rate, perhaps, that you are expecting there? Is Germany and Iberia seeing the same type of issues from a growth perspective or are they better? So that really just trying to drill down on the topline. That's question one.

And question two is on gross margin, the expansion that we've seen and it's an interplay, I guess, with the topline, but what should we expect going forward? We understand that some of the commodity costs, obviously, have been lower, sugar cost, PET. But you're starting to lap that very soon? So what should we think about gross margin, as well? I want to, again, tie it a little bit to the first question on topline. Thanks.

John Brock

I'll comment a little bit on the first question and then ask Hubert to add a bit of perspective and then on gross margins, Nik will answer that question. First of all, let me say on -- you specifically mentioned Germany and Spain. We're not going to talk about those today beyond, of course, the results that we passed out back in December. You will hear more color about that as we go forward and we'll be prepared to give a bit more color on that in CAGNY.

In terms of CCE, though, I would say our plan for 2016 and driving our revenues to the degree we've outlined them is a whole combination of activities, many of which I described, but which Hubert can give in a little bit more detail. We have a pretty substantial innovation program and we're pleased with the programs that the Coca-Cola Company has come up with in that arena, both product and packaging. We're also excited about the Euro 2016 and we're pleased about the new Taste the Feeling campaign.

So those are a few of the highlights. Hubert, you want to say a little bit more about the reason we have some confidence here in terms of our revenue plans for 2016?

Hubert Patricot

Thank you, John. Ali, I think the algorithm for growth for us next year is a combination of different factors. First, as always a strong focus on execution daily and with some advanced tools in terms of tracking of the performance.

But more importantly probably, is the combination of innovation, as John just said, both in packaging. We're going to go for smaller size. We're going to go for alu bottles, for