Coca-Cola European Partners affirms FY comparable EPS view EUR2.27-EUR2.29
For 2018, CCEP continues to expect revenue growth of approximately 2 percent to 2.5 percent and operating profit growth at the top end of the 6 percent to 7 percent range. Each of these growth figures is on a comparable and fx-neutral basis when compared to 2017 comparable results. This excludes the impact of incremental soft drinks industry taxes, which are expected to add approximately 2 percent to 2.5 percent to revenue growth and approximately 3.5 percent to 4 percent to cost of goods growth. CCEP remains on track to achieve pre-tax run rate merger synergies of EURO$315 million to EURO$340 million by mid-2019. Further, CCEP expects to have realized at least 80 percent of the target by year-end 2018 and a run rate of approximately 100 percent of the target. The comparable effective tax rate for 2018 is expected to be approximately 25 percent. Weighted average cost of debt is expected to be approximately 2 percent. CCEP also expects diluted earnings per share in the range of EURO$2.27 to EURO$2.29 including currency translation and the impact of up to EURO$500 million in share buybacks. At recent rates, currency translation has a slight negative impact on 2018 full-year diluted earnings per share. CCEP expects 2018 free cash flow of approximately EURO$1 billion, including the expected benefit from improved working capital of approximately EURO$200 million, offset by the impact of restructuring and integration costs. Capital expenditures are expected to be at the top end of the EURO$525 million to EURO$575 million range, including approximately EURO$75 million of capital expenditures related to synergies. Restructuring cash costs to achieve the aforementioned merger synergies are expected to be approximately 2.25 times expected savings and include cash costs associated with pre-transaction close accruals. Given these factors, currency exchange rates, our outlook for 2018 and the share buyback of up to EURO$500 million in 2018, CCEP expects year-end net debt to adjusted EBITDA for 2018 to be towards the low-end of our target range of 2.5 to 3 times. Further, CCEP expects return on invested capital to improve by approximately 80 basis points.