UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2015
COCA-COLA ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-34874 |
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27-2197395 |
(State or other jurisdiction
of incorporation) |
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(Commission
File No.) |
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(IRS Employer
Identification No.) |
2500 Windy Ridge Parkway, Atlanta, Georgia 30339
(Address of principal executive offices, including zip code)
(678) 260-3000
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
On October 29, 2015, the Company held an earnings conference call regarding the
financial results for the third-quarter 2015. Selected excerpts relating to Coca-Cola European Partners Limited (CCEP) from the transcript of that earnings conference call are attached hereto as Exhibit 99.1.
On October 29, 2015, a video message to the Companys employees from John Brock and Hubert Patricot was made available on the Companys
intranet. An excerpt of certain comments made by John Brock relating to CCEP in that video message is attached hereto as Exhibit 99.2.
Item 9.01 |
Financial Statements and Exhibits |
(d) Exhibits
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EXHIBIT NUMBER |
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DESCRIPTION |
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99.1 |
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Selected excerpts relating to CCEP from the Transcript of the Company Earnings Conference Call for the Third-Quarter 2015. |
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99.2 |
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Excerpt of certain comments made by John Brock in a video message to the Companys employees from John Brock and Hubert Patricot on October 29, 2015. |
FORWARD-LOOKING STATEMENTS
This communication may contain statements, estimates or projections that constitute forward-looking statements as defined under
U.S. federal securities laws. Generally, the words believe, expect, intend, estimate, anticipate, project, plan, seek, may,
could, would, should, might, will, forecast, outlook, guidance, possible, potential, predict and similar expressions
identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Companys
(KO), Coca-Cola Enterprises, Inc.s (CCE) or CCEP historical experience and their respective present expectations or projections, including expectations or projections with respect to the transaction. These
risks include, but are not limited to, obesity concerns; water scarcity and poor quality; evolving consumer preferences; increased competition and capabilities in the marketplace; product safety and quality concerns; perceived negative health
consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in their beverage products or packaging materials; increased demand for food products and decreased
agricultural productivity; changes in the retail landscape or the loss of key retail or foodservice customers; an inability to expand operations in emerging or developing markets; fluctuations in foreign currency exchange rates; interest rate
increases; an inability to maintain good relationships with their partners; a deterioration in their partners financial condition; increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters; increased or
new indirect taxes in the United States or in other tax jurisdictions; increased cost, disruption of supply or shortage of energy or fuels; increased cost, disruption of supply or shortage of ingredients, other raw materials or packaging materials;
changes in laws and regulations relating to beverage containers and packaging; significant additional labeling or warning requirements or limitations on the availability of their respective products; an inability to protect their respective
information systems against service interruption, misappropriation of data or breaches of security; unfavorable general economic or political conditions in the United States, Europe or elsewhere; litigation or legal proceedings; adverse weather
conditions; climate change; damage to their respective brand images and corporate reputation from negative publicity, even if unwarranted, related to product safety or quality, human and workplace rights, obesity or other issues; changes in, or
failure to comply with, the laws and regulations applicable to their respective products or business operations; changes in accounting standards; an inability to achieve their respective overall long-term growth objectives; deterioration of global
credit market conditions; default by or failure of one or more of their respective counterparty financial institutions; an inability to timely implement their previously announced actions to reinvigorate growth, or to realize the economic benefits
they anticipate from these actions; failure to realize a significant portion of the anticipated benefits of their respective strategic relationships, including (without limitation) KOs relationship with Keurig Green Mountain, Inc. and Monster
Beverage Corporation; an inability to renew collective bargaining agreements on satisfactory terms, or they or their respective partners experience strikes, work stoppages or labor unrest; future impairment charges; multi-employer plan withdrawal
liabilities in the future; an inability to successfully manage the possible negative consequences of their respective productivity initiatives; global or regional catastrophic events; risks and uncertainties relating to the transaction, including
the risk that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected, which could result in additional demands on KOs or CCEPs resources, systems, procedures
and controls, disruption of its ongoing business and diversion of managements attention from other business concerns, the possibility that certain assumptions with respect to CCEP or the transaction could prove to be inaccurate, the failure to
receive, delays in the receipt of, or unacceptable or burdensome conditions imposed in connection with, all required regulatory approvals and the satisfaction of the closing conditions to the transaction, the potential failure to retain key
employees of CCE, Coca-Cola Iberian Partners, S.A.s (CCIP) as a result of the proposed transaction or during integration of the businesses and disruptions resulting from the proposed transaction, making it more difficult to
maintain business relationships; and other risks discussed in KOs and CCEs filings with the Securities and Exchange Commission (the SEC), including their respective Annual Reports on Form 10-K for the year ended
December 31, 2014, subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which filings are available from the SEC. You should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. None of KO, CCE, CCIP or CCEP undertakes any obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. None of KO, CCE, CCIP or CCEP assumes 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 their respective public statements may prove to be incorrect.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or
approval.
In connection with the proposed transaction, CCEP will file with the SEC a registration statement on Form F-4 that will include
a preliminary proxy statement/prospectus regarding the proposed transaction. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to CCEs stockholders in connection
with the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE TRANSACTION FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. You may obtain a copy of the proxy statement/prospectus (when available) and other related documents filed by KO, CCE or CCEP with the SEC regarding the proposed transaction as well
as other filings containing information, free of charge, through the website maintained by the SEC at www.sec.gov, by directing a request to KOs Investor Relations department at (404) 676-2121, or to CCEs Investor Relations
department at (678) 260-3110, Attn: Thor Erickson Investor Relations. Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained,
when available, without charge, from KOs website at www.coca-colacompany.com under the heading Investors and CCEs website at www.cokecce.com under the heading Investors.
PARTICIPANTS IN SOLICITATION
KO, CCE and CCEP and their
respective directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in favor of the proposed merger. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of proxies in favor of the proposed merger will be set forth in the proxy statement/prospectus when it is filed with the SEC. You can find information about KOs and CCEs
directors and executive officers in their respective definitive proxy statements filed with the SEC on March 12, 2015, and March 11, 2015, respectively. You can obtain free copies of these documents from KO and CCE, respectively, using the
contact information above. Information regarding CCEPs directors and executive officers will be available in the proxy statement/prospectus when it is filed with the SEC.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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COCA-COLA ENTERPRISES, INC. |
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(Registrant) |
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Date: October 29, 2015 |
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By: |
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/s/ Suzanne N. Forlidas |
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Name: |
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Suzanne N. Forlidas |
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Title: |
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Vice President and Secretary |
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EXHIBIT LIST
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EXHIBIT NUMBER |
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DESCRIPTION |
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99.1 |
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Selected excerpts relating to CCEP from the Transcript of the Company Earnings Conference Call for the Third-Quarter 2015. |
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99.2 |
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Excerpt of certain comments made by John Brock in a video message to the Companys employees from John Brock and Hubert Patricot on October 29, 2015. |
Exhibit 99.1
29-Oct-2015
Coca-Cola Enterprises, Inc. (CCE)
Q3 2015 Earnings Call
Coca-Cola Enterprises, Inc. (CCE)
Q3 2015 Earnings Call
Raw Transcript
29-Oct-2015
1-877-FACTSET www.callstreet.com
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Copyright © 2001-2015 FactSet CallStreet, LLC
[SELECTED EXCERPTS]
MANAGEMENT DISCUSSION SECTION
John F. Brock
As we work to create shareowner value at CCE, we
are also focused on the successful creation of Coca-Cola European Partners, which will combine our territories with the Iberian and German bottlers. The process is on schedule for a close in the second quarter of 2016. Once combined, CCEP will build
on each bottlers capabilities, driving new efficiencies, and leveraging best practices.
The new companies increased scale, and improves capabilities
will make it a stronger commercial partner at every level. And ultimately, will drive long-term value creation for shareholders.
To ensure CCEP success,
the teams are focused on three specific areas. First, each organization, that is CCE, CCIP, and CCEAG has a clear focus on delivering full-year 2015 objectives.
Second, each companies engaged in a cross organizational effort to ensure that the transaction is successfully closed. As mentioned, this process is on
schedule with a planned close in the second quarter of 2016.
Finally, the companys our focus on moving forward to prepare for the integration. Led
by Victor Rufart, who will be CCEPs Chief Integration Officer, a team will ensure that CCEP is ready to realize the opportunities created by the new company overtime. Well continue to keep you posted on developments, involving the new
company, as we work toward a successful close.
As previously announced, Damian Gammell has now officially joined our team at CCE as Chief Operating
Officer, a position he will assume for CCEP as well. Damian has a wealth of experience within the Coca-
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Cola system, most recently as Beverage, Group President and CEO of Anadolu Efes. We are very pleased that he is
with us and we look forward to Damiens leadership as we move towards the launch of CCEP.
So in closing, let me make a few key points. While our
operating conditions continue to be difficult, I remain optimistic about the future for both CCE and CCEP. We sell many of the worlds most recognized soft drink brands that are preferred and desired by both our customers and consumers. We
operate in highly developed stable markets that offer opportunities for growth and enhanced effectiveness and efficiency. We have a highly skilled and dedicated team of people at every level in the company. This team approaches the challenges of
every day with experience and drive, always seeking new ways to serve our customers and grow our business.
And importantly we have a solid partnership
with the Coca-Cola Company, which includes an aligned approach to our markets on a commitment to develop and grow our portfolio.
Importantly, as we move
towards the creation of a new entity, CCEP, which will be the worlds largest independent Coca-Cola bottling by net sales, we will utilize each of these assets to accomplish our number one objective, creating increasing levels of value for our
sure shareholders.
Nik Jhangiani
And as John mentioned, we have cross
organizational teams working to ensure that the CCEP transaction closes as expected in the second quarter of 2016 and that CCEP launches successfully.
For 2015 the previously disclosed CCEP projected full year 2015 operating income and EBITDA remain on track while CCE is revised net sales outlook has
slightly lowered expectations with CCEPs net sales.
All figures are on a comparable and currency neutral basis. Additionally, pre-tax run rate
synergies continue to be on track, and we look forward to providing more information on CCEP after the initial filing of the draft proxy. In closing, let me emphasize that even as we work to create CCEP, we continue to have a keen focus on restoring
value building growth for CCE on capturing the opportunities before us on enhancing the effectiveness of our business.
Together these efforts will allow
us to succeed despite the persistent operating challenges of today.
We have a solid history of and a commitment to managing the levers of our business to
deliver value. This is even more important in todays environment.
As always, we remain focused on creating consistent, long-term profitable growth
and generating cash. Together with the new management team at we intend to continue this commitment into CCEP, all with the goal of delivering increasing levels of shareowner value.
QUESTION AND ANSWER SECTION
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Bonnie Herzog
Q
I have a question on your guidance. You lowered your topline to flat to slightly negative but maintain your operating income and then EPS growth
guidance, which implies some cost-cutting relative to your previous expectations, so could you talk about that a little bit more and then what your expectations are for marketing expenses. And then, more broadly your operating expense growth has
generally outpaced your topline growth pretty consistently so just curious if theres an opportunity to cut cost further there?
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To your question around OpEx I would say to you, we remain very focused on that and thats something that we continue to challenge ourselves both with
CCE and I think also in line if we look at CCEP and the synergies there is going to be a big opportunity for us to look at our overall SG&A costs. On the marketing expenses piece, I would continue to indicate to you that we remain on track with
what we had planned to spend along with the Coca-Cola Company and were not backing down from that.
Bonnie Herzog
Judy Hong
Q
Thank you. Good morning. So I wanted to just focus a little
bit on your topline performance on the sparkling brands and just obviously we had the week whether in the U.K. on the soft consumer environment and some of the competitive dynamics that youve cited, but if you think about all the efforts that
you and the Coca-Cola Company are doing to drive some topline growth, do you feel like that those are working and are you starting to see at least on an underlying basis some of the green shoots that you would expect to see from some of those
efforts and if not then what other efforts are really on the way to kind of drive stronger growth?
And then, just in terms of Spain and Germany because I
guess Nik you commented on the total performance topline projections of that you had given really being a little bit impacted by the CCE softer topline projection now, but I guess weather it probably helps some of the markets like Spain and Germany,
so just wondering why those projections arent changing at this point?
Nik Jhangiani
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Yes, sure Judy, youre right. I mean the topline softness is primarily coming from CCEs revise numbers
and that too being driven primarily by GB where we did see very poor weather starting up principally in August. So I think across some of our markets too, I think we continue to see a better performance than what weve seen in GB, supported by
better weather which I would say is right for Germany and Spain as well. And so we are able to reaffirm the overall numbers for CCEP which includes Spain and Germany pretty much at the same levels as we initially talked to you in August.
Steve Powers
Q
Thanks. Good morning. Not to belabor the top line and I
appreciate the comments around weather and the macro context et cetera but Im just struck again by the longevity of the trends really going back to 2010, since youve formed yourself as a European only company, based on your current
guidance versus pro forma 2010 revenues are going to be down, gross profits seem poised to be about flat and yet EBITDA is expected to be up and up and up sizably in margin terms.
So I guess especially in the context of a quarter where gross margins were up so significantly, and where it appears you continue to lose share in some key
markets Im just wondering maybe if theres a growing case for you to begin investing even more to drive that growth whether its investing in price and promotion even if just temporarily, investing and stills categories that may
require at least a temporary margin sacrifice et cetera. Because I just weve been talking this seems like a Groundhog Day where we have the same conversation this great expense control. Its been great for five years but the top
line has been parentally soft.
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So I think when we look at the longevity here over the last
five years weve say the first two went actually broadly in line with what we expected the last three and half had been more challenging as you pointed out. And I think its because of those macroeconomic factors principally, our consumers
and customers. And frankly we again remain relatively optimistic as we look to the future. And we think about the brands that we have the relationship with the Coca-Cola Company. The ability to drive innovation and then of course as we think about
the future and even stronger business model that were going to have going forward with CCEP.
Mark Swartzberg
Q
Yes. Thanks. Good morning guys. I guess Ill focus this
question on CC although if you can address it for CCEP or CCEP that would be great. When you look at your total brand spend, and think about the
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portion that nonworking dollars, is there a lot of opportunity there to eliminate those dollars, how far along are you in that exercise?
And then, also, as you think about total brand spend, maybe its an unfair comparison but we see Dr Pepper Snapple here in the U.S. slowly building share
and cards while keeping the total dollars spent essentially flat, so how would you characterize your effectiveness monitoring ROI and really having the dollars that are being spent used to actually produce this objective of share growth?
A
Well first of all we on Coca-Cola spend together in terms of brand and marketing spending. And most of the consumer marketing is spent by the Coca-Cola
Company. In terms of our marketing spend, we constantly are looking at absolutely the most effective and efficient way of doing it and continue to try to optimize it week in and week out to maximize our set of results and obviously you can assume
well be doing the same thing as we move forward with the CCEP.
Robert Ottenstein
Q
Terrific. Thats very helpful. And as you stand back
looking at the entire year, being flat, you could argue that that, given all the kind of distraction obviously that management has with the transaction thats actually a pretty good result, is that how you are looking at it? Do you feel
reasonably good about your commercial progress or do you feel that there are certain things that you need to be doing, so its not flat, but its actually growing?
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The key to the future is getting the growth algorithm back on track we are committed to doing that. We are committed further to working with the Coke to do
that and we think as we work with CCEP in this new entity we are committed to doing that, because growth is what its all about.
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Exhibit 99.2
Excerpt of certain comments made by John Brock in a video message to the Companys employees from John Brock and Hubert Patricot on October 29,
2015:
Thanks Hubert. I want to second your comments on innovation. These efforts will continue to create shareowner value at CCE, and even more so
when we merge our territories with the Iberian and German bottlers. Once combined, CCEP will build on each bottlers capabilities, driving new efficiencies and leveraging best practices for marketplace execution. Our increased scale will make
the company an even more effective commercial partner at every level, and we expect to begin capturing these opportunities after the close of the transaction in Q2 of next year.
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