Coca-Cola Enterprises Inc CCE
Q3 2011 Earnings Call Transcript

Transcript Call Date 10/27/2011

Operator: Good day, and welcome to the Coca-Cola Enterprises' Third Quarter 2011 Conference Call. At the request of Coca-Cola Enterprises, this conference is being recorded for instant replay purposes.

At this time, I'd like to turn the conference over to Mr. Thor Erickson, Vice President of Investor Relations. Please go ahead, sir.

Thor Erickson - IR: Thank you, and good morning, everybody. We appreciate you joining us this morning to discuss our third quarter 2011 results and our outlook for the remainder of 2011.

Before we begin, I'd like to remind you of our cautionary statements. This call will contain forward-looking management comments and other statements reflecting our outlook for future periods. These comments should be considered in conjunction with the cautionary language contained in this morning's earnings release, as well as the detailed cautionary statement found in our most recent Annual Report on Form 10-K and subsequent SEC filings. A copy of this information is available on our website at

This morning's prepared remarks will be made by John Brock, our CEO and Bill Douglas, our CFO. Hubert Patricot, President of our European Group is also with us on the call this morning. 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'll turn the call over to John Brock.

John F. Brock - Chairman and CEO: Thank you, Thor, and thanks to each of you for joining us today, as we discuss our third quarter results and our outlook for the remainder of 2011. As Thor said, we're joined today by Bill Douglas, our CFO, and Hubert Patricot, President of our European Group.

In our news release this morning, we reported comparable earnings of $0.72 per share, as total revenue grew 3% on a currency neutral basis, and comparable currency neutral operating income grew 3.5%. These results reflect our ability to work through difficult macroeconomic conditions and the impact of challenging weather early in the quarter.

By continuing to focus on key operating strategies of outstanding execution, increasing effectiveness and cost control, we remain on track to deliver another successful year of growth. In fact, despite the challenges of the third quarter, we've increased our full year earnings per share outlook to a range of $2.14 to $2.18.

Now let's take a look at the results for the quarter; our volume growth of 1% reflects solid execution offset by the impact of challenging July weather as well as prior year hurdles. We achieved pricing per case growth of 2% with a cost of sales per case increase of 4%. This reflects the cost pressures we faced in our commodities and the lapping of favorable prior year costs.

This expected gross margin decrease does not undermine our commitment to maintain or expand margins over time. However, as we discussed shifts in business conditions such as those we experienced in the third quarter can create margin fluctuations. Bill will have a bit more on this in just a few minutes.

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