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


Loading Event

Loading Transcript

Q & A
Hubert Patricot

example, which will be a new news in the market. New multi-pack for our water business. And in addition, new range, new product launches.

You mentioned the energy category. It is clearly a growth driver for us. We are continuing to target a double-digit growth on energy, driven by Monster and very encouraged, more recently by the launch of Monster Ultra, which is a zero-calorie launch, which has been a tremendous success in the US. We have also quite a few innovations on Capri-Sun, which has been growing double-digit last year. And we are going to push Coke Cherry, for example, in the GB and Swedish market.

But in addition, and John mentioned it also, it's fair to say that cycling last year, both Share a Coke and the World Cup in Brazil was a bit challenging. This year, the good news is that we have the Euro 2016, which is going to be a major event. We have five countries qualified for the event and we will have all array of activation around the event.

Being impact, being -- maybe something which is not familiar in the US but (inaudible) which are very strong, will be unpacked in France and Belgian, and a lot of, again as I say, new pack like alu bottles. So pretty encouraged by that and that's the main reason behind our slightly positive view on topline growth in 2016.

John Brock

Thanks, Hubert. Nik?

Nik Jhangiani

Yes Ali, on your question around margins, a couple of things that I would say. One, as you're aware, we've moved to the new incidents model starting January 1, 2016, with the Coca-Cola Company.

It's important from a perspective of both topline as well as what this means for our margins, because it is a program that allows us to be much better aligned and helps us position winning in the marketplace to create value because we are really focused on the right packs where we both make money as opposed to divergence that we currently have, or had in the past, when we had the model that wasn't really looking at it at a more granular level. So, I think that's one thing to keep in mind as we look at our business going forward.

From a perspective of our hubs outlook, I think your right in terms of the fact that we are lapping, obviously, some favorable benign COGS environment in the last couple of years. But fortunately, I would say for the most part, we continued to see that benign commodity cost environment in 2016 as well, particularly with where oil prices are. So, overall with our concentrate element built into that, we expect cost of sales to be up modestly versus prior year, again, on a comparable and currency neutral basis.

We have similar coverage in place from hedging perspective, so I think we are in good shape with that number, other than PET, as you know, that we have a tougher time hedging. And so, our expectation