TIDMCCEP
RNS Number : 9363Q
Coca-Cola European Partners plc
24 October 2019
LONDON, 24(th) October 2019
COCA-COLA EUROPEAN PARTNERS
Trading Update for the Third-Quarter ended 27 September 2019
and Interim Dividend Declaration
Third-quarter revenue in line with expectations, full-year
comparable and
fx-neutral diluted EPS(1) growth expected to be approximately
10%
CHANGE VS 2018
REVENUE VOLUME REVENUE COMPARABLE REVENUE FX-NEUTRAL REVENUE
(UNIT PER UNIT VOLUME PER UNIT REVENUE
CASES(2) CASE(3) CASE(3)
)
========== ========== ========== ========== =========== ========== =========== ========
Q3 2019 EUR3,282M 691M EUR4.77 (1.5)% 2.0% -% -%
YTD 2019 EUR9,084M 1,905M EUR4.78 1.0%(4) 3.5%(5) 4.5%(5) 4.0%(5)
DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:
"We are pleased with our top-line performance in the
third-quarter reflecting continued price and mix realisation, solid
in-market execution and innovation. We continue to invest today to
win tomorrow as we scale up our exciting innovations underpinned by
a strong sustainability agenda and an aligned relationship with The
Coca-Cola Company. We continue to take action on packaging having
recently announced both the move from shrink wrap to cardboard
packaging for our can multipacks, and bringing forward our 50%
recycled PET target to 2023, two years earlier than planned.
"Whilst we continue to gain market share across all geographies,
we have had a slower than expected start to the fourth-quarter as
we are seeing early signs of softening market conditions,
particularly in France and Great Britain, and unfavourable weather
in October across most markets. However, we still expect to deliver
revenue growth and free cash flow at the top-end of guidance as
well as solid full-year earnings growth, albeit at the low-end of
our previously guided range. This, alongside delivering a healthy
17% increase in the annual dividend and the now near completion of
our EUR1.5 billion share buyback programme, collectively
demonstrate our focus of driving sustainable value for our
shareholders."
1. Refer to 'Note Regarding the Presentation of Alternative
Performance Measures' for further details; Change percentages
against prior year equivalent period
2. Equals approximately 5.678 litres or 24 8-ounce servings
3. Fx-Neutral
4. Adjusted for selling day shift. Reported volume growth 1.0%
5. Includes the impact of 2019 incremental soft drinks taxes in Great Britain and France of 1.0%
THIRD-QUARTER HIGHLIGHTS(1)
Revenue (flat)
-- Comparable volume -1.5% as we cycle strong weather-driven
comparables, partially offset by solid execution &
innovation
-- Revenue per unit case +2.0%(2) benefiting from favourable
underlying price, as well as channel & package mix (e.g. small
cans volume +8.0%)
-- Transactions(3) continued to outpace volume growth
-- Portfolio launches including Costa Coffee RTD(4) in three
flavours in GB & Coca-Cola Signature Mixers in a number of our
markets
Capital returns
-- Declaring second-half interim dividend per share of EUR0.62,
up 15.0% versus last year, maintaining annualised dividend payout
ratio of c.50% (17.0% increase on an annual basis)
-- Returned YTD EUR907m (18.7m shares) via share buyback of this year's EUR1bn guidance
(cumulative EUR1.4bn (31.1m shares) of EUR1.5bn programme
announced September 2018)
Other
-- Updating full-year 2019 guidance (see below)
-- Inclusion in the Dow Jones Sustainability Index for the fourth year in a row
-- Transition to 100% recycled PET for Honest, Smartwater &
Chaudfontaine brands underway & the completion of our now
sustainability linked EUR1.5bn Revolving Credit Facility
-- Secured first CCEP Ventures investments in on-demand delivery
& self-driving technology start-ups
FULL-YEAR 2019 GUIDANCE(1)
-- Revenue growth of approximately 3% (previously low
single-digit range), excluding the impact of incremental soft
drinks taxes of approximately 1%(5)
-- Cost of sales per unit case growth of approximately 3%
(previously approximately 2.5%), excluding the impact of
incremental soft drinks taxes of approximately 1.5%(5)
-- Operating profit growth of approximately 6%(5) (previously 6-7%)
-- Comparable tax rate of approximately 25%
-- Diluted earnings per share growth of approximately 10%(5) (previously 10-11%)
-- Share buyback of EUR1bn
-- Free cash flow of approximately of EUR1.1bn (previously EUR1-1.1bn)
-- Capital expenditures of approximately EUR575m (previously EUR525-EUR575m)
-- Return on invested capital (ROIC) to improve by approximately 40 basis points
1. Refer to 'Note Regarding the Presentation of Alternative
Performance Measures' for further details; Change percentages
against prior year equivalent period
2. Fx-Neutral
3. Defined as the serving container ultimately used directly by
the consumer. It can be a standalone container or one part of a
multipack
4. RTD = ready-to-drink
5. Comparable Fx-Neutral
THIRD-QUARTER & YEAR-TO-DATE REVENUE PERFORMANCE BY
GEOGRAPHY
Unaudited, changes versus 2018
REVENUE REVENUE % FX-NEUTRAL
CHANGE REVENUE %
Q3 CHANGE
==================================== ========== ========== ===========
Great Britain EUR626M (1.5)% -%
France (France & Monaco) EUR471M (1.5)% (1.5)%
Germany EUR650M -% -%
Iberia (Spain, Portugal & Andorra) EUR878M 2.0% 2.0%
Northern Europe(1) EUR657M (2.0)% (0.5)%
Total EUR3,282M -% -%
------------------------------------ ---------- ---------- -----------
REVENUE REVENUE % FX-NEUTRAL
CHANGE REVENUE %
YTD CHANGE
==================================== ========== ========== ===========
Great Britain EUR1,777M 6.5% 6.5%
France (France & Monaco) EUR1,438M 6.5% 6.5%
Germany EUR1,821M 3.5% 3.5%
Iberia (Spain, Portugal & Andorra) EUR2,160M 4.5% 4.5%
Northern Europe(1) EUR1,888M 0.5% 2.0%
Total EUR9,084M 4.0% 4.5%
------------------------------------ ---------- ---------- -----------
1. Belgium, Luxembourg, Netherlands, Norway, Sweden &
Iceland
Great Britain
-- Revenue +3.0%(1) YTD excluding the impact of incremental soft drinks taxes
-- YTD volume growth supported by solid growth in Coca-Cola Zero
Sugar, Fanta & Monster, partially offset by strong weather
& CO(2) driven comparables in Q3 & the proactive delisting
of our squash brand, Kia Ora
-- Revenue/UC(2) growth supported by positive pack, category
& channel mix (e.g. small cans +20.0% YTD & outperformance
of away-from-home (AFH) channel)
France
-- Revenue +3.5% YTD excluding the impact of incremental soft drinks taxes
-- Challenging market conditions, particularly in the Home
channel, partially offset by solid growth in Coca-Cola Zero Sugar,
Fuze Tea, Monster & Tropico
-- Positive pack mix YTD with continued volume growth in
priority small packs(3) (e.g. small cans +20.5% in Q3 driven by the
launch of Coca-Cola Light 250ml & recent innovation)
Germany
-- YTD volume growth negatively impacted by strong Q3 weather
driven comparables (particularly in the AFH channel), offset by
solid growth in Coca-Cola Zero Sugar, Monster & Fuze Tea
-- Strong revenue/UC(2) growth supported by positive price &
pack mix (e.g. Monster & Coca-Cola Energy)
Iberia
-- Solid YTD volume growth reflecting soft weather driven
comparables, improving market trends & solid execution
particularly in the AFH channel
-- Volume growth led by Coca-Cola(TM) , Fanta, Monster & Aquarius
-- Revenue/UC(2) growth supported by positive price, pack &
channel mix (e.g. small cans +21.5% YTD driven by Cola-Cola(TM)
& recent launches including Coca-Cola Energy, Monster Espresso
& Appletiser)
Northern Europe
-- YTD revenue growth driven by Belux (+1.0%) & Netherlands (+2.0%)
-- Volume growth YTD led by Coca-Cola Zero Sugar, Monster, Fuze
Tea & Tropico offset by strong Q3 weather driven
comparables
-- Revenue/UC(2) growth supported by positive price &
priority small packs(3) volume growth (e.g. small cans +10.0%
YTD)
1. Fx-Neutral
2. Revenue per Unit Case
3. PET & Glass < 1litre; Cans <33cl
THIRD-QUARTER & YEAR-TO-DATE VOLUME PERFORMANCE BY
CATEGORY
Comparable volumes, changes versus 2018
VOLUME % CHANGE
Q3 YTD
============================= ======== ========
Sparkling (1.5)% 1.5%
Coca-Cola(TM) (1.5)% 1.0%
Flavours, Mixers & Energy (1.5)% 2.0%
Stills (2.0)% -%
Hydration (5.0)% (2.5)%
RTD Tea, RTD Coffee, Juices
& Other(1) 4.0% 4.5%
Total (1.5)% 1.0%
------------------------------ -------- --------
Coca-Cola(TM)
-- Transactions +2.0% YTD, ahead of volume growth
-- Classic -1.5% YTD reflecting strong Q3 weather driven
comparables in GB, Germany & Northern Europe
-- Lights +6.0% YTD with robust growth across all markets driven
by Zero Sugar (+13.0% YTD) & new flavours across both
ranges
Flavours, Mixers & Energy
-- Fanta +1.5% YTD reflecting higher distribution of Zero & new flavours (e.g. Grape Zero)
-- Energy +16.5% YTD with strong performance of the Monster
Mango Loco & Ultra ranges. Coca-Cola Energy now available in
all markets
-- Appletiser +67.5% YTD reflecting recent launch in Iberia
Hydration
-- Reflecting strong weather driven comparables in Q3 and reduced low value promotions
-- Encouraging initial customer reaction to Aquarius Enhanced
Water (now live in Germany, GB & Netherlands) & Capri-Sun
Fruity Water (mainly GB)
-- Isotonic drinks +5.0% YTD with strong growth of Aquarius & Powerade in Iberia & Germany
RTD Tea, RTD Coffee, Juices & Other(1)
-- Solid share gains in the RTD tea category as Fuze Tea continues to gain scale
-- Increased distribution & strong results from Tropico in France & Belgium
-- Good initial customer reaction to recent launches of Monster
Espresso & Costa Coffee RTD (available in three flavours in
GB)
1. RTD refers to Ready-To-Drink
CONFERENCE CALL
-- 24 October 2019 at 15:00 BST, 16:00 CEST and 10:00 a.m. EDT; accessible via www.ccep.com
-- Replay & transcript will be available at www.ccep.com as soon as possible
DIVIDENDS
-- The CCEP Board of Directors declared a second-half interim dividend of EUR0.62 per share
-- The interim dividend is payable 3 December 2019 to those
shareholders of record on 19 November 2019
-- CCEP will pay the interim dividend in euros to holders of
shares on Euronext Amsterdam, the Spanish Stock Exchanges and
London Stock Exchange
-- Other publicly held shares will be converted into an
equivalent US dollar amount using exchange rates issued by
WM/Reuters taken at 16:00 BST on 24 October 2019. This translated
amount will be posted on our website here:
http://ir.ccep.com/shareholder-information/dividends-and-splits
FINANCIAL CALENDAR
-- Preliminary unaudited full-year 2019 results: 13 February 2020
-- Financial calendar available here: http://ir.ccep.com/financial-calendar
-- Previous results and presentations available here: http://ir.ccep.com/results-and-presentations/recent-results-and-presentations
CONTACTS
Investor Relations
Sarah Willett Claire Michael Joe Collins
+44 7970 145 218 +44 7528 251 033 +44 7583 903 560
Media Relations
Shanna Wendt Nick Carter
+44 7976 595 168 +44 7979 595 275
About CCEP
Coca-Cola European Partners plc is a leading consumer goods
company in Western Europe, making, selling and distributing an
extensive range of non-alcoholic ready-to-drink beverages and is
the world's largest Coca-Cola bottler based on revenue. Coca-Cola
European Partners serves a consumer population of over 300 million
across Western Europe, including Andorra, Belgium, continental
France, Germany, Great Britain, Iceland, Luxembourg, Monaco, the
Netherlands, Norway, Portugal, Spain and Sweden. The Company is
listed on Euronext Amsterdam, the New York Stock Exchange, London
Stock Exchange and on the Spanish Stock Exchanges, trading under
the symbol CCEP.
For more information about CCEP, please visit our website at
www.ccep.com and follow CCEP on Twitter at @CocaColaEP.
Forward Looking Statements
This document contains statements, estimates or projections that
constitute "forward-looking statements" concerning the financial
condition, performance, results, strategy and objectives of
Coca-Cola European Partners plc and its subsidiaries (together
"CCEP" or the "Group"). Generally, the words "believe," "expect,"
"intend," "estimate," "anticipate," "project," "plan," "seek,"
"may," "could," "would," "should," "might," "will," "forecast,"
"outlook," "guidance," "possible," "potential," "predict,"
"objective" and similar expressions identify forward-looking
statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks that
could cause actual results to differ materially from CCEP's
historical experience and present expectations or projections. As a
result, undue reliance should not be placed on forward-looking
statements, which speak only as of the date on which they are made.
These risks include but are not limited to those set forth in the
"Risk Factors" section of CCEP's 2018 Integrated Report/Annual
Report on Form 20-F, including the statements under the following
headings: Changing consumer preferences and the health impact of
soft drinks (such as sugar alternatives); Legal and regulatory
intervention (such as the development of regulations regarding
packaging and taxes); Packaging and plastics (such as climate
change, resource scarcity, marine litter and water scarcity);
Competitiveness and transformation; Cyber and social engineering
attacks; The market (such as customer consolidation and route to
market); Economic and political conditions (such as continuing
developments in relation to the UK's exit from the EU); The
relationship with TCCC and other franchisors; Product quality; and
Other risks.
Due to these risks, CCEP's actual future results, dividend
payments, and capital and leverage ratios may differ materially
from the plans, goals, expectations and guidance set out in CCEP's
forward-looking statements. Additional risks that may impact CCEP's
future financial condition and performance are identified in
filings with the SEC which are available on the SEC's website at
www.sec.gov. CCEP does not undertake any obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise, except as
required under applicable rules, laws and regulations. CCEP assumes
no responsibility for the accuracy and completeness of any
forward-looking statements. Any or all of the forward-looking
statements contained in this filing and in any other of CCEP's
respective public statements may prove to be incorrect.
Note Regarding the Presentation of Alternative Performance
Measures
We use certain alternative performance measures (non-GAAP
performance measures) to make financial, operating and planning
decisions and to evaluate and report performance. We believe these
measures provide useful information to investors and as such, where
clearly identified, we have included certain alternative
performance measures in this document to allow investors to better
analyse our business performance and allow for greater
comparability. To do so, we have excluded items affecting the
comparability of period-over-period financial performance as
described below. The alternative performance measures included
herein should be read in conjunction with and do not replace the
directly reconcilable GAAP measure.
For purposes of this document, the following terms are
defined:
"As reported" are results extracted from our consolidated
financial statements.
"Comparable" is defined as results excluding items impacting
comparability, such as restructuring charges, out of period
mark-to-market impact of hedges and net tax items relating to rate
and law changes. Comparable volume is also adjusted for selling
days.
"Fx-neutral" is defined as comparable results excluding the
impact of foreign exchange rate changes. Foreign exchange impact is
calculated by recasting current year results at prior year exchange
rates.
"Dividend Payout Ratio" is defined as dividends as a proportion
of comparable profit after tax.
"Free cash flow" is defined as net cash flows from operations,
less capital expenditures, payments of principal on lease
obligations and interest paid, plus proceeds from capital
disposals. Free cash flow is used as a measure of the Group's cash
generation from operating activities, taking into account
investments in property, plant and equipment and non-discretionary
lease and interest payments. Please refer to our unaudited results
for the six months ended 28 June 2019, published on 8 August 2019,
for a description of the change to the definition to ensure
consistency following the adoption of IFRS 16 on 1 January
2019.
"Capex" or "Capital expenditures" is defined as payments for
purchases of property, plant and equipment plus purchases of
capitalised software less proceeds from disposals of property,
plant and equipment. Capex is used as a measure to ensure that the
cash spending is in line with the Group's overall strategy for the
use of cash.
"ROIC" is defined as comparable operating profit after tax
divided by the average of opening and closing invested capital for
the year. Invested capital is calculated as the addition of
borrowings and equity less cash and cash equivalents. ROIC is used
as a measure of capital efficiency and reflects how well the Group
generates comparable operating profit relative to the capital
invested in the business.
Additionally, within this document, we provide certain
forward-looking non-GAAP financial information, which management
uses for planning and measuring performance. We are not able to
reconcile forward-looking non-GAAP measures to reported measures
without unreasonable efforts because it is not possible to predict
with a reasonable degree of certainty the actual impact or exact
timing of items that may impact comparability throughout 2019.
Unless otherwise stated, percent amounts are rounded to the
nearest 0.5%.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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