Coca-Cola Enterprises announces tough 2015, Forecast 2016

Coca-Cola Enterprises, Inc. (CCE) which engages in marketing, production, and distribution of non alcoholic beverages has warned that a “difficult operating environment” will hamper both its 2015 and 2016 full-year performances.

The company, which in October reported a 15% fall in net sales for the first nine months of 2015, said late yesterday that net sales in the 12 months of this calendar year will be “slightly negative”. While net sales in 2016 are forecast to be up slightly for the full-year, Q1 will have to deal with transaction costs related to CCE’s tie-up with the German unit of the Coca-Cola Co and Coca-Cola Iberian Partners to form Coca-Cola European Partners.

The new bottling entity, announced in August, will generate costs for CCE of between $25m and $30m in 2015, and between $75m to $100m in 2016. The company noted that it does not plan to repurchase any shares next year, due to the pending transaction.

CEO John Brock said: “While we anticipated managing through a difficult operating environment in 2015, the consumer sector and the category have been softer than originally expected. Further, we expect these conditions to continue to impact CCE’s results into 2016.

“While the creation of Coca-Cola European Partners will provide new synergies and efficiencies, top-line growth is expected to remain challenging in 2016,” Brock added.
On the bottom line, 2015 should see operating profits generate “slightly positive growth”, although they are expected to come in down slightly in the first quarter of next year.
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