Coca-Cola Enterprises, Inc. (NYSE:CCE) Q1 2016 Earnings Conference Call - Final Transcript

Apr 28, 2016 • 10:00 am ET


Coca-Cola Enterprises, Inc. (NYSE:CCE) Q1 2016 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Coca-Cola Enterprises First Quarter 2016 Conference Call. At the request of Coca-Cola Enterprises, this conference is being recorded for instant replay purposes. At this time, I would like to turn the conference over to Mr. Thor Erickson, VP of IR. Please go ahead, sir.

Thor Erickson

Thank you, and thanks to everyone for being on our call today. We appreciate your interest and for joining us to discuss our first quarter 2016 results, and our outlook for 2016.

(Forward-Looking cautionary Statements)

Additionally, it is important to highlight that statements made about Coca-Cola European partners, or CCEP, and the proposed merger on today's call, are made with full recognition that this is subject to regulatory approvals and other conditions at closing, and that until the closing of the transaction, we are operating our businesses separately and independently.

Today's remarks will be made by John Brock, our CEO, and Nik Jhangiani, our CFO. Damian Gammell, our COO, is also with us on the call today. Following prepared remarks, we will open the call for your questions. In order to give as many people as possible the opportunity to ask questions, please limit yourself to one question, and we will take follow-up questions as time permits.

Now, I will turn the call over to John Brock.

John Franklin Brock

Thank you Thor, and thanks to each of you for joining us, as we review our first quarter results and our outlook for the year. Looking at our results for the first quarter, comparable diluted earnings per share totaled $0.41, with currency reducing these results by approximately $0.02. Currency-neutral net sales declined 3.5%, and comparable currency-neutral operating income increased 1.5%.

Our volume decline of 4% includes the drop of 5% in Great Britain and 3.5% decline for Continental Europe. These results reflect the impact of a soft consumer environment, as well as temporary supply chain challenges in Great Britain. Nik will provide more color on this in a few minutes. In addition, there was one less selling day, versus the same quarter a year ago.

While our first quarter performance was a slow start to the year, this quarter is our smallest. Based on our outlook for the remainder of the year, we have affirmed our 2016 guidance. Nik again will share more on our outlook shortly. As you will recall, we signed an agreement last August with Coca-Cola Iberian Partners and the Coca-Cola Company to merge CCE with the bottlers in Spain, Portugal and Germany.

Since then, we've secured European Union Commission approval. Our proxy statement prospectus on Form F-4 has been filed with the Securities and Exchange Commission and has been declared effective, and a vote by CCE shareowners is now scheduled for May 24. The transaction remains on track to close by the end of the second quarter this year. To realize the benefits of this transaction, we're working diligently to secure a timely close, and a successful launch of CCEP.

It is vital to ensure that the new company is