Coca-Cola Enterprises sees exchange rate constraints impacting 2015 profits, forecast slight growth for 2016

Coca-Cola Enterprises, the anchor bottler of the newly formed Coca-Cola European Partners has warned that a “difficult operating environment” will affect 2015 and 2016 full-year performances. It said that currency translation is expected to hurt 2015 per-share numbers by about 18 percent.

In October, the company reported a 15 percent drop in net sales for the first nine months of 2015 and announced a few days ago that net sales in the 12 months of 2015 will be “slightly negative”. However, it is forecasting slightly higher net sales for 2016 full-year.

The company added that Q1 of 2016 will have to deal with costs associated with its merger with the German unit of the Coca-Cola Company (Coca-Cola Erfrischungsgetranke) and Coca-Cola Iberian Partners to form Coca-Cola European Partners.

The new bottling entity announced in August, will generate costs for Coca-Cola Enterprises of between $25m and $30m in 2015, and between $75m to $100m in 2016. The company said it does not plan to repurchase any shares next year, because of the pending transactions.

Chairman and Chief Executive Officer, John Brock said: “While we anticipate 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 Coca-Cola Enterprises’ results in 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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