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Coca-Cola Enterprises Reports Q4 and Full-Year 2011 Results
Posted February 9, 2012
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• CCE achieved record full-year diluted earnings per common share of $2.29 on a reported basis, or $2.18 excluding the impact of items affecting comparability.
• Full-year revenue totaled $8.3 billion and reported operating income was $1.0 billion, up 28 percent; comparable operating income was $1.1 billion, up 17 percent over prior year pro forma results and up 9 percent on a currency neutral basis.
• Fourth-quarter diluted earnings per common share totaled 36 cents on a reported and comparable basis.
• CCE completed a $1 billion share repurchase program in December and implemented a new $1 billion program with a goal of at least $500 million in share repurchases in 2012.
• CCE now expects 2012 comparable and currency neutral earnings per share growth of approximately 10 percent reflecting the impact of the recent tax increase in France.
ATLANTA --(BUSINESS WIRE)-- Coca-Cola Enterprises, Inc. (NYSE:CCE)(Euronext Paris: CCE) today reported full-year 2011 diluted earnings per common share of $2.29, or $2.18 excluding items affecting comparability. Reported operating income for the year totaled $1.0 billion; comparable operating income totaled $1.1 billion, up 9 percent on a comparable and currency neutral basis versus 2010 pro forma results. Currency translation positively affected full-year results by 15 cents per share compared to prior year pro forma results. Items affecting comparability and other pro forma adjustments are detailed on pages 11 through 15 of this release.
"2011 marks the sixth consecutive year of volume and profit growth in our legacy territories," said John F. Brock, chairman and chief executive officer. "While we continue to face ongoing marketplace and macroeconomic challenges, the results from our first full year of operating exclusively as a European bottler reinforce the confidence we have in the long-term potential of today's Coca-Cola Enterprises.
"Throughout the year, we made consistent progress against key initiatives, including the integration of Norway and Sweden and the completion of our $1 billion share repurchase program," Mr. Brock said. "In 2012, we expect to deliver another year of growth as we continue to enhance our brand portfolio, improve the service we provide to our customers, and maximize the value of excellent marketplace opportunities, including the 2012 Olympic Games in London, which we are working to make the greenest ever.
"Ultimately, this will allow us to deliver against our long-term goal of creating increasing levels of shareowner value," Mr. Brock said. "In working toward this objective, we initiated a new $1 billion share repurchase program in January 2012, with a goal of repurchasing at least $500 million of our shares by year end, and earlier this week increased our dividend by 23 percent."
OPERATING REVIEW
Full-year 2011 revenue totaled $8.3 billion, an increase of 11½ percent, and up 5½ percent on a currency neutral basis, both when compared to 2010 pro forma results. For the fourth quarter, revenue grew 5½ percent both on a reported and comparable basis, and 6 percent on a currency neutral basis.
Comparable full-year operating income was up 17 percent over prior year pro forma results, and up 9 percent on a comparable and currency neutral basis. For the quarter, operating income was up 34 percent on a reported basis and 28 percent on a comparable and currency neutral basis to $184 million.
For 2011, free cash flow totaled $490 million, driven by solid business results and reflecting net negative changes in working capital, including year-over-year performance improvement in accounts receivable and declines in accounts payable. Free cash flow was also affected by fourth quarter pension contributions and a modest incremental investment in commodity inventories.
Total full-year volume increased 3½ percent. This includes 3½ percent growth in our sparkling brands, including energy, and approximately 3 percent growth in still beverages.
Key highlights for full-year 2011 included volume growth of 3½ percent for core Coca-Cola trademark brands, and more than 40 percent for energy brands, driven by Monster and the introduction of Powerade Energy in Great Britain. We also had solid growth from Capri Sun and Ocean Spray in stills. On a territory basis, volume increased in both Great Britain and continental Europe, up 2½ percent and 4½ percent respectively.
For 2011, net pricing per case was up 2 percent. Cost of sales per case grew 3 percent in 2011 and operating expenses increased 2 percent, all on a comparable and currency neutral basis.
For the fourth quarter, volume climbed 3 percent, net pricing per case grew 2½ percent, and cost of goods sold per case was up 2½ percent.
"Our success in 2011 is a demonstration of the value of our brands, the ability of our people to execute at the highest levels, and our commitment to creating ever higher levels of customer service," said Hubert Patricot, executive vice president and president, European Group. "Throughout 2011, we continued the development of the foundation of the business - our brands, our operating strategies, and the skills of our people - in a manner that will allow our business to build on our heritage of growth and maximize the value of the opportunities that lie ahead."
SHARE REPURCHASE
CCE completed a $1 billion share repurchase program in the fourth quarter of 2011 that began late 2010. As previously announced, CCE has initiated a new $1 billion share repurchase program with a goal of repurchasing at least $500 million worth of shares in 2012. These plans may be adjusted depending on economic, operating, or other factors, including acquisition opportunities.
FULL-YEAR 2012 OUTLOOK
For 2012, CCE now expects earnings per diluted common share growth of approximately 10 percent. Revenue is expected to grow in a high single-digit range, with operating income growth in a mid single-digit range. Our outlook for EPS growth, revenue, and operating income remain in line with previously disclosed guidance, includes the impact of the recently enacted tax increase in France, and is comparable and currency neutral. Although it is too early to predict the 2012 currency impact, based on recent rates, currency translation would decrease full-year earnings per share by approximately 6 percent.
Included in this guidance is a new initiative in Norway to transform our business and invest in the long-term growth of our brands, business, and customers. Over the next two years, we will move from direct store delivery to third-party and customer warehouse delivery. Additionally, we will transition from refillable to recyclable and non-refillable packaging. These actions will improve customer service, increase consumer packaging choice, reduce our carbon footprint, and enhance operational efficiency. This initiative will require approximately $60 million in capital investments and $50 million in nonrecurring restructuring charges.
Including the impact of this initiative, the company now expects 2012 free cash flow in a range of $500 to $525 million, with capital expenditures in a range of $400 to $425 million. Weighted average cost of debt is expected to be approximately 3 percent and the effective tax rate for 2012 is expected to be in a range of 26 percent to 28 percent.
CONFERENCE CALL
CCE will host a conference call with investors and analysts today at 11:00 a.m. ET. The call can be accessed through our website at www.cokecce.com.
Coca-Cola Enterprises, Inc. is the leading Western European marketer, distributor, and producer of bottle and can liquid nonalcoholic refreshment and one of the world's largest 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. For more information about our company, please visit our website at www.cokecce.com.
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