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Coca-Cola Enterprises, Inc. (NYSE:CCE)

Shareholder Analyst Call

September 12, 2011 07:30 ET

Executives

Thor Erickson – Vice President, Investor Relations

John Brock – Chairman and Chief Executive Officer

Hubert Patricot – Executive Vice President and President, European Group

Simon Baldry – Vice President and General Manager, Great Britain

Tristan Farabet – Vice President and General Manager, France

Ben Lambrecht – Vice President and General Manager, Benelux

Paul Gordon – General Manager, Norway and Sweden

Richard Davies – Vice President, Operations

Bill Douglas – Executive Vice President and Chief Financial Officer

Analysts

George Ho – Deccan

Judy Hong – Goldman Sachs

Christine Farkas – Bank of America/Merrill Lynch

Ian Shack – Nomura

Mark Swartzberg – Stifel Nicolaus

Caroline Levy – CLSA

John Faucher – JPMorgan

Lauren Torres – HSBC

Carlos Laboy – Credit Suisse

Andrew Holland – Société Générale

Steve Powers – Bernstein

Thor Erickson – Vice President, Investor Relations

All right, good morning, good afternoon, depending on where you are joining us from. Thank you and welcome to CCE’s Investor and Analyst Conference. Really appreciate you joining us for this event. I know many of you, I am Thor Erickson, Vice President of Investor Relations for CCE if you don’t know me, but we do really appreciate you taking the time out to come here today.

On behalf of the more than 13,000 employees across Europe and in the U.S., I’d like to welcome you to Paris and thank you for joining our webcast. This is our first ever investor event as new CCE and the largest event we have ever done in Europe. Today, with five straight years of solid OI growth in Europe and solid long-term targets in place, our outlook placed CCE among the top tier of S&P 500 companies. One of our objectives today is to deepen your understanding of our business and to broaden your exposure to our management team, so that you can hear about our plans to drive growth and see that we are well-positioned to capture the opportunities before us.

To facilitate this over the next several hours, you will see presentations from members of our leadership teams both executives and operators. We will also open the session at the end of the presentation for Q&A.

Our commitment to you is simple and that is to ensure that you have the insight and the clarity to understand our business model and our expectations of future performance and the potential of the markets that we serve everyday in Western Europe.

Before we begin, I want to do a brief overview to help you set your expectations around the event and content. Today, we issued a release, where we provided some key updates on our 2011 guidance, long-term targets and share repurchase programs. Additionally, we will share a brief update on potential acquisition of Germany. And then, we will provide information on each of these topics. The focus of this event is on our business model and our long-term outlook. We have an established track record of success in Europe and there are many opportunities for growth and we are all well-positioned to capture these. If you could, please take a moment to put your phones on silent and thank you again for taking time to learn more about our business – and .

Now, before we begin the obligatory forward-looking statements, I’d like to remind all of you of our cautionary statements. This event 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 details cautionary statements found in our most recent Annual Report on Form 10-K and other SEC filings. A copy of this information is available on our website at www.cokecce.com. This event will be hosted by John Brock, our CEO.

And now, I’ll turn the event over to John, our Chairman. Thanks John.

John Brock – Chairman and Chief Executive Officer

Thank you Thor and thanks to all of you for taking time out of your busy schedules to be here with us in Paris. We really are excited about having the chance to talk with you about CCE, about our growth prospects, about our future prospects, and about our journey to being the best beverage sales and customer service company.

So, Thor mentioned an announcement earlier today. This announcement, which hopefully you’ve seen, we affirmed our full year guidance for 2011. We affirmed our long-term growth targets. We announced that the current share repurchase program, which has been in place for sometime, will in fact be completed by the end of this year. We announced a new $1 billion share repurchase program with the idea that at least half of that $0.5 billion will be done in 2012. Bill Douglas will give you additional information on this in his remarks a little bit later.

So, what’s our agenda today all about? It’s all about driving growth and creating value. We believe that as we talk today about the European landscape as we talk about our beverage portfolio, our customer service approach, and our overall business model, hopefully, you’ll be left with a view that we are all about winning in the marketplace. Good news is you are going to see a number of our leadership team members as we go through the session today. And again as Thor has already indicated, we’ll have a Q&A session at the end of the day, where we will be happy to take any questions you might have.

One of the things I thought I might do struggle with bit of a quick history of CCE because some of you don’t have this 25 plus year history. We started back in 1986. At the time, it was the largest IPO in history. Shortly after that, several years after that, CCE and the Johnston Group merged and following that there were a number of expansion opportunities that took place in North America.

In terms of Europe, our first move in Europe was 1993 with the Netherlands, and then as you can see, we added Belgium, France, Holland, shortly thereafter. We had number of developments that took place between ‘96 and 2002. I joined the company in 2003. That’s when we adopted that operating framework that you have seen many times before and which you are going to see again today, and that’s why we really began to take a good hard look at what needed to done to transform our company and get it to where we thought it needed to be and it was an outgrowth of that, of course, that resulted in the paradigm shifting transaction that you know about that closed almost one year ago not quite, but almost one year ago.

Right now, under which, we bought Norway and Sweden and we sold the North American business to the Coca-Cola Company for a pretty significant number. We also have the exclusive right to negotiate on Germany and that has already started and goes for a couple of years. We are now the key strategic and leading Western European Coca-Cola bottler.

Growth, again, in our sense, it’s pretty simple. The best predictor of growth in the future or in fact the best predictor of anything in the future, is going to be what’s happened in the past. And if you take a look at our revenue growth for the past five years, compound growth rates were 5%, with the OI growth even higher compound growth rates. This is a business in Western Europe, which is consistently through times of challenge, through times of great weather, and through times of economic uncertainty continued to grow, which again we think reflects the strength of the business, the brands, the customers, and the people.

I mentioned the operating framework, here it is. We came up with this within six months of the time I joined the company. Our leadership team and I developed it and this only had a couple of minor tweaks really now and almost six years. It’s very clear we aimed to be the best beverage sales and customer service company, there it is. We believe that can be done and will be done through three key strategic priorities: best brands, best customer service, best people in the right jobs in a truly diverse and inclusive culture. And when we do those three things, what will emerge is predictable, consistent, long-term profitable growth.

Now, what I would like to do for the next few minutes is tell you how that math, that guidepost plays out with our business. So, starting with the brands, the world’s most valuable, the world’s most iconic brand, Coca-Cola, it’s the heart and soul of our stable. We have red, black, and silver and it obviously underpins everything we do. Though we have a lot of other things beside that, we have growing juice categories with Capri Sun and Ocean Spray. We have in energy category, which is literally on fire with Monster, Nalu, Burn, Relentless, and now we have just announced, you will hear more about this from Simon, Powerade Energy in GB. And then of course we have sparkling flavors, which compliment brand Coke like Fanta, like Sprite. And the key number on here is the one you see in the chart, which says we are the number one NARTD player in every market in which we play. That’s a beautiful place to be.

Customers. We view our customers as absolutely critical to everything we do. We want them to think with that we are their most valued supplier and they generally do. Take a look here, you will see that we are viewed in these completely impartial objective surveys done, not only of food and beverage companies, this includes Procter & Gamble, Clorox, General Mills, Unilever, Nestlé. That’s the competition here. We are viewed as the number one supplier in three of our four countries and number two in France. And France is up significantly from years past, where we have had some labor challenges and other problems. So, we are really proud of those ratings, and by the way in GB, it’s number one for six years in a row.

So, these are just guideposts. These are just indications of what our customers think. But frankly, there are a variety of other things. We are routinely viewed by trade publications like The Grocer in GB is the number one supplier, our leading wholesalers in GB and Belgium. And then the third and most important part of our strategy is our people. People are the heart and soul of everything we do. We win or we lose by the people we have in our company.

We have 13,500 employees who are dedicated to one thing and that’s the winning in the marketplace everyday. It’s a truly diverse and inclusive workforce. We have employee training plans. We have leadership and development activities, which are aimed at getting them to where they need to be, getting them to have the tools they need to be able to do the business, their business in the best way possible. We prepared more than 2,700 young people in France to help them develop out of undeveloped situations in region suburbs. We have been recognized for a number of the activities that we have done in helping some of these kids develop by the French Prime Minister.

And right now, what’s happening is we are moving into our biannual employee engagement survey. We’ve spent a lot of time looking at how employee engagement and performance compare and the correlation is absolutely huge. The change we had in the employee engagement between 2007 and 2009 was nothing short of remarkable. The consultants we were using said they have never seen a company like that kind of progress in two years. We are doing it again right now in 2001 and we don’t have any results yet, but I will tell you if we don’t have the same kind of similar increases in employee engagement, I will be hugely surprised. So, we put employees right at the top of everything we do.

You hear us talk a lot about CRS, Corporate Responsibility and Sustainability. We don’t call it the strategic pillar, because it’s not one or three or four things. Sustainability is inextricably linked to everything we do. We don’t consider a marketing program. We don’t consider a plant expansion. We don’t consider anything without thinking about sustainability and that’s why it’s embedded in the Coke bottle, the left Coke bottle on our operating framework. It touches everything we do. And by the way, it could well emerge as the number one driver of employee engagement in the survey we are doing. It came out two years ago as the number two.

Our goal is very simple. We aimed to be the leader, the CRS leader in the food and beverage industry. We have focused on both social and environmental goals. We will continue to do this. Last year, we significantly grew our business, while at the same time we significantly reduced our carbon footprint, that’s entirely consistent with where we are heading with our commitment 2020. You are going to hear more about this in a few minutes from Laura Brightwell, but it is really important in everything we do.

And again, just as in how suppliers, how grocers view us as suppliers, we enjoy looking at ratings in the world of sustainability. It’s no accident that we’ve been rated by Newsweek magazine as the greenest food and beverage company among the Fortune 500 for two years in a row. It’s no accident that we are one of the top 100 dream companies rated by the Sunday Times. And then we are also one of the top 100 in the world as rated by Corporate Responsibility magazine. So, lots of work in this area, you are going to hear more about it from Laura in a few minutes.

Relationship with the Coca-Cola Company, those of you who have followed us for sometime now that this relationship like a lot of relationships ebbs and flows. In the fall of 2008, when we took a 10% price increase in North America, it was challenged, but coming out of that challenging situations, our relationship with the Coca-Cola Company has continued to improve, and I would say today it’s the best, certainly that it’s been in the history of the time, I am there and I listen to a lot of other people say it’s the best in the history of the entirety of CCE.

We could not have done this incredible transaction that we did without having a very strong relationship. Muhtar and I meet regularly. We visit in the market consistently. In just the last three months, we have been in Brussels, we have been in Bordeaux, France, and we have been in London. Each time spending an entire day in the market in both market visit meetings as well as in one-on-one meetings to talk about our future. It’s an excellent relationship.

And the bottom line is when you think about it, the Coca-Cola Company does world-class advertising and marketing to pull consumers in and we do world-class activation with our customers with our supply chain to absolutely finish the whole program. That’s the way this relationship works. We are very excited about it.

What are our key long-term sources of growth? Well, as I said at the beginning, this entire meeting is going to be about conveying to you that we believe there are some significant growth algorithms here and to talk a little bit about how it is we are going to achieve them. Certainly, at the top of the list is to achieve our long-term growth targets. You know what those are. I am going to tell you about them again in just a minute and you will hear more about those from Bill a little later this afternoon.

We also have to invest in high return opportunities. You will hear about some of those. We need to optimize our capital structure. We understand it is not necessarily today right where we’d like for it to be, but there are some good reasons for that. We’ll tell you about that. And importantly, we think it’s important to turn to return some cash to shareowners. Again, you are going to hear about these from both Hubert and Bill.

So, our long-term growth targets, you see them there on the slide, these are significantly more robust than the long-term growth targets that we had for legacy CCE. Revenue growth of 4% to 6% and you’ve heard me saying it number of times we don’t talk volume growth, we talk revenue growth, revenue being a combination of volume, price, and mix. We believe it’s really important for us to be the one that makes the determination in any given point in time what that combination should be. OI growth 6% to 8%, high single digit EPS growth, and then at least 20 basis points improvement on ROIC. If we do those kinds of results three to five years in a row as we are convinced we can do and will do that will put us in the top 10% of Fortune 500 companies.

The other piece that I would mention here is our capital structure, which you see on the right. It is not where we have said we like for it to be which is 2.5 to 3 times, it’s at 1.8, Bill will tell you some more about that. But I think the key thing to takeaway from this chart and there is up to $4.5 billion that is there available from delivering our targets on one hand and getting our capital structure right on the other hand.

And what do we plan to do? We plan to invest in high return opportunities. We are going to do that first by driving our core business. We are going to, in addition to that, continue to grow other options, looking for other options, territory expansion as well as new business opportunities, you’re going to hear us talk about that. We will compare these opportunities to a very robust based business model and it’s important to keep in mind that all of these opportunities will be looked at against other users of our resources including returning cash to shareowners. So, we will look at any and all opportunities.

Germany, never can give a talk without people asking me where are we on Germany, and I understand that. It is the largest market in Europe. It’s about 15% of TCCC’s volume in Western Europe. It is the largest population center in Europe. It’s a growing market. And we are currently working hand in hand with the Coca-Cola Company to better understand the outlook. We have plenty of time to the time window goes for almost two years. We are currently and we will continue to conduct significant and thorough due diligence.

Again, we have plenty of time the one thing I would say is I don’t think anyone should contemplate the announcement of the transaction this year. Returning cash to shareowners, so not just driving growth for our business, but we are really interested in returning cash. And I think this chart really shows just how we have done that. If you look through the first 23 years of history in CCE, we returned a total of $2.6 billion to our shareowners. In two years 2010 and 2011, we have returned $4.8 billion. That would be an 84% increase compared to the previous 23 years combined.

We have more than doubled dividends in the past five years. We are currently completing the $1 billion share repurchase program and we have just announced the start of another $1 billion share repurchase program. So, deal is pretty simple. Our plan is to continue returning cash to shareowners and our plan is to continue to meet or exceed our long-term financial objectives.

Do we have some risk? Yeah, we do. We are optimistic, but we are realistic. Last month, certainly as you know, France proposed an increase in the excise tax on certain beverages with sugar. Now, we fully support efforts by the way to reduce the deficit, but we are strongly opposed to any kind of taxes that unjustly targets purchasing power of people on one single item.

Consumer information and education is absolutely key here and discriminatory taxes are not the way to solve the problem. It’s going to be an ongoing process. There is an official proposal that will be expected to see emerging in the next few weeks. It’s going to have to be discussed for weeks in Parliament here in France, in October perhaps even in November. There will be a vote sometime before the end of the year on exactly what’s going to happen. We are examining the potential impact on our business in some detail. We are working with the beverage industry. We are working closely with Coca-Cola, but I think the key thing here is there is a lot more to come on this one.

Bottom lines, we are aware of the risk, but as in the past five years we are confident we can navigate through them. So, the key takeaways I’d like to ask you to think about from my introductory session and think about as you see the rest of the presentations today. We have a solid history of growth at CCE, revenue and operating income, even in really challenging macroeconomic situations. We are executing our strategic priorities. We are on track to deliver 2011. We have a very favorable and flexible capital structure and we have a variety of priorities that are focused on driving long-term growth. And finally, we have the teams and the plans in place to achieve our long-term financial objectives.

I’ll close with two slides on people. We don’t talk about our board whole lot, but I thought it was important to let you know we have got a very good and very diverse board and here the 12 members are. Just for perspective, we have five different nationalities on our board. We’ve got a Canadian, a Brit, a French, Dutch, and then Americans. We have four females, which by the way puts us as one of only 13 Fortune 500 companies that have four females on the board. And most importantly, we’ve got a really talented group of people. You add it all up, it’s 50 plus years of experience on our board that you see right there in front of you.

And then we have a solid and proven team of people in my executive leadership team. We have got again 150 years of beverage industry experience, among those seven people most of it involving European beverage companies. We have a lot of local operating managers. You are going to hear from a number of them today who have again massive experience in these important markets. So, put it all together, we’ve got an exciting board; we’ve got a terrific management team; some very great plans and programs.

And with no further ado, I want to turn it over to Hubert to give us most insight into our European business, Hubert.

Hubert Patricot – Executive Vice President and President, European Group

Welcome everybody and good afternoon in Paris. As John said, we have the track record of profitable growth for CCE in Europe. And we have grown our operating profit year-over-year in the past five years, even in the tough difficult economic times we have been facing recently. We have added $360 million to our profit line. And there are three, four key factors to this achievement.

The first one, we are on the sizable and dynamic category with large headroom for growth in Europe. We are the number one branded supplier and we grow this as critical for our success by growing our customers. Our supply chain is key to our success. It delivers values in an efficient way. And last, we have the right management team to steer that growth in this journey.

Let me share a short overview of the business we are serving. We serve 170 million people in Western Europe, seven country, one principality. We have grouped this country in four business units: Great Britain, France, Belgium, Netherlands, and Luxembourg, which we call Benelux, and then recently acquired Norway and Sweden. We employ more than 13,000 employees and we have a very local business with our 17 facilities. Our presence dates back to the end of the World War I more than 90 years ago.

Now, two good news for us in this chart; first, we play in a very category, the largest one in food and beverage, the non-alcoholic ready to drink beverages. This is a turnover in our countries of $24 billion. And the second good news is that this category is growing. Yes, it has been growing by the end of June by 7% in value. It has been growing in all our countries. This is an impressive demonstration of the potential of this category and the favorable arbitrage of the consumer even in tough time.

And we are category leaders in all our BUs. Our value share brings from close to 40% in Belgium and Luxembourg to 22% in France. The second player varies by country. It is Brit Vit in GB. It is Nestlé in France as the water category is really important in this country. Our value share is 29%, but if you look at what we achieved again this year, we’re although achieving our weight by creating 32% of the value category, adding $300 million to the value of the category by the end of June, and the main reason is because we play where the value is.

You see that the volume is pretty balanced between water and sparkling, but when it comes to value, if you are sparkling and still you reach 85% of the value of the NARTD categories. And for us sparkling is 86% of our sales in our value. There, the name of the game for us is to grow the category leveraging our leading brands, and on the still, we are going after our gaining share to move forward our business.

John said it. He said in our global operating framework, we want to be number one or strong number two in every segment we operate. And you see there that we are delivering on this ambition on our core business, cola and flavored sparkling, but the good news again is that we started to join on high margin, high growth categories like energy and sport. And our strategy is delivering, where we are achieved already a second position in most of our countries and we see again more potential to come in this area.

In the bottom categories, juice and water, our strategy is to go, where the profitable niches are like with glacéau vitaminwater in the enhanced water category. In the still and the other around, we’re going to invest to gain share. We have the right portfolio to achieve the strategy.

First, we have the right portfolio to achieve this strategy. First, the leading brands in the sparkling arena with the Coca-Cola trademark, the 3-Coke. I want to highlight incredible success phenomenon of Coke Zero in our territories. Since we launched it in the vote of all of our territories in 2008, it has been growing double-digit every year and tomorrow you will see the market that these brands are always present both in the away from home and grocery channel.

To go after the potential in the other category, we partner both with the Coca-Cola Company and it’s the vast majority of our brands, but also we complement our portfolio with strong valued brands such as Ocean Spray, which has high health credential in the juice market or Capri Sun in the juice drink, because we see a really sustainable and continued growth potential for us in Western Europe.

First of all, because of per capita of the NARTD category, in general, is lower than the rest of the world. And even inside our own countries, you see a wide variation between countries, being half the size of Belgium in GB and Sweden and was less in France. Second, the per capita on our product is 50% lower than the U.S. And here again, Belgium with the high per capita continued to grow and you see the large, very large headroom for growth for France and Holland.

And finally, the last point is that we have a growing population in this part of Western Europe. Population is growing 0.5% every year, which mean that we are adding 4 million people more every five years. We are about value, we are about sparkling. This chart shows that we have captured 57% of the value created on the sparkling for the first six months of the year. We did that with our portfolio strategy, which is the sales driver, with our brand and package innovation, and the last element, which is really unique in our view is that we have the strongest marketing asset in the fast moving goods industry and we leverage it.

The 3-Coke strategy is yet about availability as I just stated. It’s also about brand innovation. We have introduced, for example, caffeine-free Coke Zero as a pilot for the rest of the world. Last year in France, it has been a success. It has been expanded to Benelux. We have also worked on the portion control with a 50cl can. It’s no more than 6 million cases.

And again on the assets, we consider that events like the Olympics, it’s not the one-time activation, it’s really used to step change our business and we have the experience of that. We used in the past the ‘98 World Cup in France to really accelerate the growth of this business, changed the fundamentals of the way we work with the customer, that’s what we’re going to achieve with the Olympics. And Simon Baldry will detail our plan for the 2012 Olympics and I will share with you how we do even outside GB the most of the Olympics.

Within flavored sparkling, it’s important for us to recruit new users, building the affinity both with the consumers and with the gatekeepers. That’s what we do with our strong brand, Fanta with a campaign More Fanta, Less Serious, at the same time offering alternative like Zero or all-natural, which we have just launched in Norway and Sweden.

We also addressed local opportunities with more local brands being Dr. Pepper in GB and Holland. And also we are looking now at the ethnic opportunities. On this chart, we have Fernandez, which is a brand, which targets the Dutch population from the Guiana origin. And we have just introduced in France, (Hawai), which is a brand very popular with our population from North African region. But as you know, beverage is also about excitement and new flavors. Again year-in, year-out, we are putting in the market new flavor. This year, it’s about Lilt Mango, Peartiser, Fanta Peach, Fanta Tropical. This is about getting the attention and the excitement of the consumer on this category.

I mentioned the high value, high growth energy category. Here we see that our multi-brand portfolio is delivering. We launch Relentless and Burn five years ago. We added in 2009 Monster in our territories, and this year, we have been growing 30% gaining 1.5 points of market share. There is still a huge potential to grow the segments in our countries and we have the right portfolio to go after this growth.

Growth story, value story is also the case for the still market. Here you see our brand Powerade, on which we have added the Powerade Zero in GB and pretty rapidly in the rest of the countries. We have also a good cooperation since last year with Ocean Spray. We have although the distribution in GB and France and the momentum is there. And here again, we are going to innovate with light and one of the juice version.

Capri Sun is also a very strong and good driver of growth for us, again, with a brand which has value and a specific positioning. And we’re going to replicate the successful strategy of Glasgow mineral water, as it happened in the U.S. We started three years ago in GB for building the brand and now we are going for national coverage and extension to all of our countries. Again, it’s a niche, but with high value, high margin potential.

And now, I would like to share with you two videos that will illustrate our thirst for innovation with Powerade Energy, which is a new product just launched in GB. And the second one, it’s about the way we activate again in events like the Olympics. And it will share with you how we activate not in GB, which Simon will talk about, but in France with our main customer, Carrefour. Video please.

(Video Presentation)

Well, this thought-bearer promotion you will see in Carrefour next month, but also in all different CCE countries in Europe. It’s the first time ever that the Olympic will be activated outside the own country one year in advance. This is really what we think about leveraging our unique assets. And of course, the trade like it, John stated our ranking as the best suppliers in most of our country, but we have no complacency with that. And we know we need to continue to sell and convince the trade about joint value creation story.

What is that about? It is conveying the potential of the category, an expandable category. It is standing for what we stand as the DNA, brand, value, and growth. And value is coming to our premium brand strategy. And last point, the supply chain has to deliver a competitive advantage with superior service to this customer.

To enable this growth, we have three key components, an ad-hoc strategy dealing also with the customer expectation, their own strategy. We need them to supply the right capability to deliver on our growth plan and the sales force. In the past 10 to 15 years, you would have seen the most fast moving goods company in Europe average used their feet on the street. It has not been our way. Yes, we are calling at the headquarter with the right capability that we know also that the moment of truth is per stall, per cafe, per takeaway outlet.

Supply chain, again I mentioned and will average detailing how we have created a CCE way about supply chain, about efficiency, and cost. And we need to have engaged people and again doing good for our business, doing good for the planet.

When talking about our customer strategy, we divide our business into large channel. The first is the grocery channel. It’s about 60% of our sales. And here we still have a potential for growth just by the expanding our availability in the discounter channel. But then comes what is called to the culture of curriculum, away from home channel. We continued to invest to build in the cafe, in the takeaway and we have now focused a lot of effort on the proximity channel, the convenience stores. Because we see that today the consumer consumption pattern is moving more to this kind of channel and we need to deliver. To do so, we have built joint business plan with our customer and Simon Baldry will show you our data has been critical in our Olympic effort in GB, but also in France we are working in the same pattern with Carrefour, for example.

I was mentioning the capabilities and the category region is something, which is core to our success. What is that? It is to quantify our metrics fundable to categories for us and for the customers. We look at each channel, each consumption occasion. And for example, we are able to say that in GB, we have a potential for £1.4 billion more, if we execute the right programs. And overall, we have calculated in the bulk of our countries an additional potential of US$3 billion. It calls for program like Coke with Food execution.

Revenue growth management, I am sorry, I mentioned Click. Click is also the way to visualize what the program can look like. We have a center in GB in Uxbridge, where the customer can come. We have all the store displayed and they can build their own imagery about what the display for Christmas can look like, what the display for the Olympics can look like. And we can in a real time change the design, the picture, and more importantly, we can interview consumer about that. It’s about anticipation and efficiency.

Revenue growth management is also core. It’s offering the right path, the right pricing and Belgium is probably one of the most advanced countries and Ben will take you through what we are doing in term of pack-price architecture in the Belgium markets.

And the go-to-market is also essential. Five years ago, we tested in Paris, the concept of boost zone, which was to reinvest strongly in away from home, putting cooler, defining the right level of look of success. Five years after, we have now 330 boost zone in all of Europe.

And the next step for us is to better work with the wool seller, because as you probably know we are none in the bulk of our markets, we have the non-DSD environment. So, DSD is only probably 10% to 12% of our sales. So, we have to work better with wool seller to execute the stroke of success and it is the next generation for us. Because what we expect from our sales force, which is in all our BUs, the most in our sales force is yes, execute the plan, but also taking the right level of initiative to exceed our customer expectations. And this is a pretty high investment for us and we want to have the best return for this investment, that’s why we look carefully every year at the way we reported sales force. And for example, two years ago in Belgium, we changed from a regional organization to an organization through our channel, because if its better relatively small geographies, which Belgium is and this year we are applying it to Holland and we show the impact in term of displays and impact in the market.

Supply chain is critical to deliver this growth. We are a growth company. Supply chain has set up the right standout in term of performance. This is what we call the CCE way. It’s about playing the best practices that also having the flexibility to transship from one country to the other while we still produce 90% of what we said in each country.

And our people, John said it we run survey about the engagement of our people. There are three key drivers, which are impacting their workplace satisfaction. The first one is about visible management, the proximity of our leaders, the ability to connect with our employees, it’s crucial.

The second one is helping them to produce their best to grow it’s about training and development. And here we have a special focus about sales force ability and this year with Pam Kimmet our HR, VP we created the commercial academy. And all of our sales people will go to this commercial academy. And the last component, which is our CRS responsibility, so that all our employees can be proud of what CCE is achieving in this arena.

We are putting this in their daily business life. We have setup carbon footprint for each of our BUs and each of our plans. We have launched in our BUs, the planned PET bottle to lead the industry and to accomplish and to ensure we feel our role as the leader we have taken initiative in invest in recycling capabilities in GB, because we knew it was what it was required by the market to achieve on our vision on recycling. We need to lead also on this aspect.

So, the key takeaways is that we have an established track record of increasing results and profitable growth in this market. We operate in a dynamic and growing category, but we still a large potential for growth in the coming years. We have the right leading brands, which we complement for value adding brands and we see that we can create and we create value for our customers. We win when they win and we are winning together. And the last point is that we have created the CCE way to leverage a fine European scale, but also focusing on the best-in-class daily execution, which is core to the success of our bottler.

And to lead this effort, to continue the journey, we have an experienced management team in Europe, more than 100 years in fast moving goods industry management. Simon Baldry, who is leading our GB business unit will share with you our innovation strategy on energy, but give you also more flavor on our Olympics activities in GB. Tristan Farabet, the Head of France will talk to you about the growth engine of CCE, which is France and how we win with the customer and how we are refining our go-to-market approach.

For the Benelux, Ben Lambrecht will explain how we continue to grow the benchmark for us, which is Belgium and how we build the right capabilities in Holland? And Stephen Moorhouse, who is leading the Supply Chain is not with us today. He is attending an advanced program in Harvard, which I think is a good sign of the way we want to grow our leader, but Rich Davies, who is leading the operation and production will share with you the CCE way and how we manage to secure the growth with the competitive advantage in supply chain.

I thank you for the attention and now I will handover to Simon Baldry.

Simon Baldry – Vice President and General Manager, Great Britain

Thanks, Hubert. Ladies and gentlemen, good afternoon. My name is Simon Baldry and I am the General Manager of our business in Great Britain. And over the next 20 minutes, I would like to share with you how we are driving sustainable growth in our GB business. So, our marketing GB is established. It’s affluent and we have a growing population. And as you have already heard with our per capitas around the 204 level, that’s mid range for CCE and we believe that gives us considerable headroom for growth.

Now, we have seen our market environment becoming more challenging recently, that’s certainly the case. GDP growth is slowing in the last two quarters, but soft drinks in GB, it’s a resilient category. And we have been navigating our way through some of these challenges over the past two years and continuing to grow. It’s true that our consumers are experiencing pressure on their disposable income. But I think what you see on the bottom of this chart, bottom left side are some of the consumer trends that we believe give us the opportunity to continue to drive soft drink growth further.

Now in GB, our category of NARTDs is the second largest category for our customer. And as we are a margin accretive customer, identifying ways to delight our shoppers and growth is both in the interest of our customers as well as it is for ourselves. In GB, the sparkling segment has a 54 share of total NARTDs and its growing currently at 10%. Now, sparkling represents the largest part of our GB business and it’s where we have a 53% share. We are overall market leaders with the 33% share of total NARTDs and so far this year-to-date we have contributed 39% of total category growth, therefore, increasing both our volume and our value share.

Turning to leadership, in terms of leadership, we are more than twice as big as an ex-manufacturer in both volume and value. Britvic is our second biggest manufacturer and competitor we focus on in GB and they distribute the PepsiCo brands as you know. And although PepsiCo is shown here includes Tropicana and Gatorade as they distribute directly.

Now, with this scale of leadership advantage, our customers look to CCE to lead the category. And we’ve been using some of the unique opportunities we have like the Olympics or indeed an initiative we have called open more business to make sure our customers see the benefit of our soft drinks category and we can continue to drive growth together. And I’ll tell you a little bit more about both of those things as I go forward.

In terms of brand mix, driving My Coke, our flavored carbonates and other sparkling brands is clearly key to our success. Coke is the only £1 billion plus brand in the grocery market in Great Britain, exceeding the 1 billion sales level in 2009. And since that point, Coke has continued to grow.

In terms of package mix, our business is well-balanced between cans and PET. And 38% of our package mix is made up by our immediate consumption packs, which represents a profitable opportunity for us to grow. Our vision in GB as you have already heard is to become our customers’ most valued supplier. And most clearly, the grocery channel is important channel for us. We have focused on growing across all channels due to the pervasive nature of our distribution, which gives us growth opportunities importantly across imports and into own premise.

Our focus on customers as you’ve already heard is being recognized. We have been rated the number one imports manufacturer by the multiple retail grocers in GB for seven years and I am delighted to say last week we got the top line results in for this year survey and for the eighth year in a row now GB, CCE has been rated the number one manufacturer. That’s an area I am particularly proud of. In addition to the other recognitions we have seen, you can see here on the right hand side of this chart and it’s something that myself and the management team focus on rigidly in terms of understanding what we need to do to continue to delight our customers.

So, now let me talk to how we are going to drive growth in the business and there are six areas here that I’d like to describe, three of these focus on co-brand opportunities and three focus on the enablers that will enable us to unlock the headroom that we have identified. So, taking each one in turn, firstly, let me turn to growing sparkling. Clearly, sparkling at 84% of our portfolio is essential that we drive this part of our business and we have very clear branded propositions and clear target audiences beyond our red, black, and silver portfolio in Coke.

Important for us in GB is driving our total portfolio, but also being very aware of our mix on black and silver. 47% of our portfolio in GB is made up of zero calorie products in our My Coke stable, that’s the highest share across all of CCE markets. And we have been accelerating that mix during the course of this year was growing across all of our portfolio in red, black and silver driving Coke Zero by 20% on a year-to-date basis. We have been successful in growing flavors portfolio with Fanta, the number one sparkling orange in Great Britain currently growing on a year-to-date basis at 13%.

And in addition to these clear branded propositions, we are fortunate to have some iconic global assets and properties to deal with. Let me talk a little bit about Christmas first. Christmas is very important for us and that it is the time when we have maximum household penetration for Coke in GB. Indeed, if you talk to GB consumers, what they will say to you is most GB consumers don’t believe Christmas is coming until they see the Coke trucks on TV. Now, that iconic property is something that we brought alive last year by having the rail trucks on roads visiting our customer stores and visiting big consumer shopping centers and areas, where we can create excitement. It was very successful last year and we are going to more than double the presence of that activity as we go into this Christmas.

Looking forward, clearly in 2012, we are then very fortune to have not just the euros in the football arena, very important to any Brit in terms of their football, but we also have this unique opportunity with the Olympics.

Growing in still is important to us, but here we are going to develop a strategy deciding where we selectively grow our portfolio, where we have successful brand assets, and compelling consumer propositions. We’re the number one juice drink manufacturer with the recent acquisition of Ocean Spray alongside Capri Sun and Oasis that drives our number one position.

This year we’ve been focusing on broadening our portfolio through the MPD we’ve been bringing into the marketplace. With Capri Sun, we are broadening it out to also include Capri Sun H2O flavored juice water products helping us drive the number one lunchbox juice proposition that Capri has in our GB market.

In Ocean Spray, we are launching 100% juiced in the next month to broaden the Ocean Spray portfolio. And Oasis the great lunchtime with meals brand, we are adding new variants with blackcurrant and apple.

Hubert has talked to you about energy and the importance of the energy market in GB. It’s the fastest growing segment of the marketplace in GB. With the successful launch of Monster and Relentless, we’ve already established a number three value proposition at energy. If we look at it in terms of volume, we’re actually the number two volume manufacturer in GB ahead of Red Bull. But our participation is largely being in the segment of the market that we call stimulation. When you look at the overall market in GB, 48% in volume, 35% in value is where Lucozade participates, and unlike the stimulation area of the market we participate in, we call that the revised segment of the market. We’ve targeted that opportunity and we believe we have a considerable opportunity to grow through the launch we’ve made this year, the first in the Coke system of Powerade Energy.

Now, Powerade Energy is a different proposition. It offers a dual energy sustained proposition that provides a combination of fast energy and sustained performance from the balance of carbohydrates and caffeine that we have in the product. Initial results, to-date, have been very encouraging and online with plan.

So, let me turn now to then some of the elements that will help us continue to drive sustainable growth, the so called enablers, I referred to earlier on. Firstly in terms of category vision, we completed extensive research amongst consumers and shoppers that’s identified $1.4 billion category headroom for growth in Great Britain. This category vision enables us to work with our customers across all our channels to be really focused about what are the core strategies that we need to work on and deliver together. That creates structural change within the soft drinks market in GB to unlock that headroom for growth and you’ve already heard Hubert talk about some of those Coke with meals for example identifying ways to really make our brand equity work in our own premise channels. And in the last two years, having already implemented many of those strategies, we’re starting to see positive reactions coming back. Our category has grown by £717 million over the last two years and we’ve increased our shares.

Secondly building superior shopper insight is another key enabler and means on unlocking category growth and we’ve been successful in generating this superior shopper insight through the investments we have made in virtual technology. Hubert referred to this earlier on. This virtual technology enables us particularly in the grocery environment where it’s very difficult to provide store tests that have meaningful results. It enables us to model our grocery customer store and in the virtual world conducts, research amongst their shoppers very often in their stores in real-time.

Results have been very positive. They’ve been underpinning a lot of our growth and this clicks collaborative learning and insight center, we have a video of that in one of the breakout rooms that you can have a look at later on and I’d be happy to talk more about it later on today.

Now, our sale force has used our category learnings to capture and create the compelling steps to unlocking growth for our smaller independent retailers. This is what we branded open more business and across the industry our category initiatives and strategies have been shown to grow our customers’ business by up to 8% or more. In particular areas, where we’ve launched Meal Deals focusing very much on the opportunity for having a sandwich and a coke for lunch, we’ve been able to demonstrate with retailers the opportunity to grow business on the My Coke portfolio by up to 30%.

Now, sale force is measured on their executional excellence and we’ve been investing in our efficiency, effectiveness, and an improved sustainability. One example of this is our investment in photo recognition technology whereby an outlet check that used to take up to 10 minutes is now completed with a click of one or two photographs, a significant step forward for us in getting the best of the people we have at store.

And finally, let me turn to the Olympics. This really is a once in a life time opportunity to drive sustainable growth in GB throughout Olympics sponsorship. And the scale of the Olympics is significant, not just in 2012, but beyond. For example, the Olympic Torch Relay, which kicks off on May the 17th, goes within one hour of 95% of the total GB population. It runs for 70 days and is one of our biggest opportunities to get successful and impactful execution across the whole of GB. But then the Olympics, the Olympics is the biggest sporting show on earth and two weeks later it’s followed by the Paralympics, the second biggest sporting event on earth. Unique opportunities for us to drive our business, but it’s how we’re planning to use the Olympics is most important.

Firstly, we’re planning to drive and transform the growth trajectories of three critical brands for us. The My Coke portfolio through our ability to use the Olympics, to recruit and change behaviors of our key core audiences on red, black and silver. On Powerade establishing firmly Powerade as a performance driven brand on the serial display. And thirdly, vitaminwater which all around its personality and its will bring the fun to the games when games come to London.

Now, we’ve been planning this over a phased way approach and we’ve been very clear about how we go off to the Olympics it started right to the beginning of 2010. Firstly by recognizing that we talk first to our employees then to our customers and finally if you’re seeing what’s going on in the marketplace now to our consumers. As far as employees are concerned, early in 2010, we went out talking about how they can participate in the Olympics and be part of this unique opportunity that we have. How we expect from them to deliver their personal best performances to have these once in a lifetime opportunities?

Towards the end of 2010, we really started to engage our customers around the journey we’re now going on. Many of the changes I’m talking about in the soft drinks market in GB required structural change that isn’t possible to do in a usual one year type of conversation. So we’re implementing multi-year programs with most of our big customers to enable us to really make the big changes required to unlock that growth.

And then thirdly we’re talking to consumers and we’re talking to consumers through a moments plan and here on the chart you see two of those moments. Our future flame run with a torch. In October, we’re going to be giving once in a lifetime opportunities to win tickets to things like that 100 meters finals and then the torch tour has been an opportunity for us to go around the country encouraging people to be part of the Olympics Spirit and learn what it’s going to be like to actually run the torch relay next year. But critically building and leaving a lasting legacy is what’s the most important to us.

I’ve talked about our customer relationships. If we’re going to unlock growth, it has to be on a multi-year basis. The tough conversations and the tough structural changes we want to do are not done in the context of the usual annual negotiation, and those conversations are well underway. We’re driving our people engagements. It’s important to us that our people are engaged, we can drive better performance to engaged workflows.

And we also recognize that London 2012 plans to be the greenest games in history. We will play our part in demonstrating our green credentials. All of our products will be recycled off the park and we’ll be using it as a golden opportunity to talk to consumers about how they should recycle more. All of the products coming on to the park will be doing sell and buy on these same trucks. We have 14 trucks to move our products on to the park and they will be a legacy into our business after that. And it comes from the greenest warehouse that we have in our business, which is situated just a few miles away from the park in Stratford.

So, what are the key takeaways that I’d like you to take from this presentation around GB, which is our largest market in CCE? Firstly, that we are a growth category and we have a leading portfolio that’s winning share. Secondly, that we are very much focused on how we unlock our category headroom through the strategies, the capabilities, and the technologies that we are bringing on stream to enable us to do this. And finally, that we are committed to driving sustainable legacies from this unique opportunity that we have with the London 2012 Olympic games.

So, I would now like to hand over to Tristan Farabet, General Manager in France. Thank you very much.

Tristan Farabet – Vice President and General Manager, France

Thank you, Simon, and good evening, good afternoon. I am Tristan Farabet and I am the General Manager for our business in France. I have been with the company for 18 years in a variety of roles in finance, sales and change leadership. And I have a passion for growth, a passion for change, a passion for success. I’m very proud of our momentum in France, our team, and I love our company. So over the next 20 minutes, I’m going to share with you how we are going to make sure that France will play its role of growth engine for CCE.

France is a large country. It’s an effluent economy. It’s a growing population. We have gained $2 million additional inhabitance over the last 10 years. And it’s also a land of opportunity with the per capita consumption of only 143. The country of opportunity with a relatively stable political climate even in the perspective of next year’s presidential election with good economic backdrop and the consumption and growth have been pretty resilient over the crisis.

With the strong brand love, our brand Coca-Cola has been established here since 1919, more than 90 years, and a good and increasing recognition of CCE’s local anchorship and CRS leadership. At the same time, it’s fair to recognize that we are evolving in a complex environment with recurring ingredient issue like Aspartame. With the tightened economic policy that drives implication for our business like the current sovereign back threat that we are facing for 2012. We are navigating our way through this challenge and we are continuing to grow strongly.

Soft drink is actually important to our customers. Non-alcoholic ready-to-drink is the first category in France. It’s number one in value and is growing. Water has a steady share of the French market. And although we are not significantly operating in water, CCE has an overall leadership position with a 23% value share. And even more importantly, a strong share of the high potential and high-value sparkling segment. So, we have an undisputed market leadership, 23%. It’s more than two times the size of the second player, Nestlé.

On our core soft drink segment, our biggest competitors are Orangina Schweppes recently acquired by the Suntory Group and PepsiCo. But our skill gives us natural leadership and category captaincy vis-à-vis our customers on soft drink.

Our portfolio here is still My Coke-centric and the good news is that the My Coke franchise is still expanding. We have, at the same time, high development opportunities in flavored sparkling as well as in still. In terms of package, our business is well-balanced between cans and PET.

Modern Trade Home Channel represents 74% of our sales and we operate in a concentrated customer landscape with the top five home channel customers accounting for 80% of the channel volume or 59% of our total volume. The cold channel out-of-home provides great growth opportunities in a more fragmented environment with 400,000 point of sale. And importantly, we are delivering profitable growth in both channels, and in both channels, our customers view us as the highly valued supplier.

So, we are working on six pillars to deliver sustainable profitable growth. Growing the sparkling category, expanding our share in still, enhancing our value growth model with revenue growth management, developing our profitable go-to-market approach, winning with our customers, and CRS leadership and I am going to expand a little bit on each of those six pillars.

Sparkling will clearly remain the first contributor to our growth in the future and we still have large headroom to grow the category. Leveraging a strong potential with Coke Classic, accelerating life, building an unique success and momentum that we have with Coke Zero, which is now the number two sub-link in the market experiencing a 23% share this year.

Gaining leadership in the other sparkling soft drink segment and leveraging another potential. On top of that in 2012, we will be able to leverage key brand assets like the Olympics like the Europe. That’s really resonates well with the French consumers and the French shoppers and that will rise both category growth and market share.

In stills, we will selectively expand our share with the focus on value growth. Juice drink and tea offered a large volume growth potential and we have good platforms to take this potential with Nestlé and with Capri Sun, which has an incredible momentum and is now the number two juice drinks in the market. So, there are also value niche that we want to develop on stills with vitaminwater and Limonata, for example.

We also had a significant value opportunity in France as consumer analysis shows a relatively low-demand elasticity versus price. So, we are developing our RGM capability. I am working on a holistic value creation model that encompasses not only annual tariff increases, but also back differentiation, optimization of our promotion as well as mix management.

In the fragmented out-of-home channel and in our DSD environment, the efficiency and the effectiveness of our root market is obviously critical. Over the last five years, we have made great progress with boost zone first introduced in France. And this locked the cold drink potential through a more efficient geography based approach. Our root market now entered a second phase with more data targeting and focusing on the highest potential point of sales, leveraging the wholesalers’ relationship with win-win partnerships with enhanced technology driven productivity of our sales force. This abated root market model will enable significant value creation in the core channel.

Customers are at the very heart of our project and we will gain and sustain their preference. Being category caption, building for the first time this year on category vision, which is a comprehensive research that we have done amongst both consumers and shoppers and that demonstrated a big potential for growth in the market and articulated half we can get it with our customers.

Developing strategic partnership with win-win long runs agreements and plans with our leading consumers, focusing on high potential banners like independent retailers or hard discounters, and building of course on the sales force execution excellence, which is at the very heart of our culture, which is in the G&A of our organization.

Finally, we will continue to leverage our solid local anchorship and our CRS leadership. Also because we believe this is a great platform to convey our messages and to protect our interest and our license to operate.

In summary, four key takeaways, France is a land of opportunity. We have – you have the solid business here and we have a clear strategic agenda. We are committed, we are confident that we are going to be one of the major growth engine policy. Thank you.

It’s now my pleasure to introduce my colleague and friend from the Benelux, Ben Lambrecht.

Ben Lambrecht – Vice President and General Manager, Benelux

Thank you, Tristan. Ladies and gentlemen, good afternoon, I am very pleased to be able to guide you through the first multi-country business units. Effectively, we will focus mainly on Belgium and Netherlands as Luxembourg operates very much the same way as we do in Belgium and is incorporated within our Belgium operations.

Starting with the overall overview, it’s definitely fair to say that these three countries are relatively small geography, but it is very dense populated and we are serving 27 million consumers over these – in these three countries. A lot of similarities, but let me focus on a couple of big changes, big differences. First of all, the way our business has developed in these countries. In the Netherlands as we have already seen, we have roughly 150 per capita developments, whereas in Belgium, we are around 350. It’s definitely more developed and it has also to do with the growth portfolio that we do have in Belgium.

Our second big difference is our road to market, whereas apart from a small foodservice vending business in the Netherlands, we are operating fully in a central warehouse delivery system, which is the system that we have across Europe, whereas in Belgium, we have chosen for a selective direct store delivery system, there where we add value, value for both our consumers and obviously a value for CCE.

The operating environment is very diverse mainly because of these three countries, different languages, lots of governments, and we are looking at a socioeconomic environment, which is anyhow quite look-alike. However, we do face the same kind of ongoing economic uncertainty, but we have been able in the last couple of years to navigate through it and we are confident that where the team will continue to navigate to manage this uncertainty.

Now, if I look at another big difference, it’s a difference about the consumer dynamics and I could probably spend a whole hour on these, but let me just highlight it with a kind of an image. When the Dutch shopper goes to shop, they she or he takes his bike, bicycle and goes to the proximity store around the corner fill his little basket with two or three bottles of our profits and they do that three to four times a week. And they are very much still concerned or they are very much looking on price, price who remains an important criterion of choice, whereas the Belgium shopper or consumer once a week takes his car goes to the bigger supermarkets, fills his trunk with a lot of multi-packs, six-pack, 1.5 liter of Coke, Minute Maid, Chaudfontaine, You Name It, and then drives back.

Belgium consumers who continue to be very attractive about eight brands, there are truly eight brands. It is a clear difference between two countries who are very close to each other. In terms of the environment, both countries are very packaging sensitive. We do have a equal taxes and packaging tax, both in Belgium and in the Netherlands and there is a deposit on bigger PETs in the Netherlands.

Now, you have seen it, we are operating in the non-alcoholic ready-to-drink category, highly developed in Belgium as you can see with 11%, 8% in the Netherlands, which indicates still that is a category with a lot of headroom for growth, and it’s a great place to be because in both countries, these categories continue to grow.

In terms of the mix obviously, when you look at Belgium the sparkling category, especially is a high value adding category and we have a very important share of 67%. In the Netherlands, we are at 46% share in the sparkling environment. Big difference is a little bit in the fact that in Belgium we do play an important role in the stills environment having 20% today of the total still segment and that is mainly due to the fact that we are obviously having a very strong juice drink brand with Capri Sun, but more important is the fact that we have the brand Minute Maid, which is 100% juice in our portfolio and Minute Maid is the number one A brand juice on the Belgium territory.

In terms of competition, it may be a little bit different when you look at key competitor Pepsi, who is an active player, but it is only focusing on especially Pepsi Max having 8% in terms of value in Belgium and 4% in the Netherlands. There are lot of other A-brand competitors, but the key competition as you can see is mainly within the environment of private labels and hard discounters.

Private labels with customers such as Albert Heijn, Superunie in the Netherlands, but very much about (Alb Heijn) and little in Belgium, this is the competitive set. These are competitive players, but on the other hand, they are also an important opportunity going forward.

In terms of the category and packaging mix, obviously, we do have as per our global operating framework, a very nearly every category we compete a number one or a very strong number two. Obviously in the profitable Cola environment with My Coke, Coke Light, Coke Zero, sometimes Sprite and sparking. In the Netherlands, as you can see 21% more represented mainly because of the fact that we also distribute in the Netherlands Schweppes and Dr. Pepper and playing an important role in stills as I’ve highlighted and 13% in the waters in Belgium, which is mainly due to the fact that we acquired Chaudfontaine as the mineral water brand that we acquired in 2003, a brand that was nearly debt and today is the number one water brand in the more profitable out-of-home environment and catching up very quickly also in the retail environment.

In terms of energy 1%, but we are growing very strong double-digit growth based upon the three energy strategy with Burn, Monster, and Nalu. And then when you look at that packaging mix, it is surprising when you see the presence of returnable glass bottle in Belgium at 34%. And that is very evident, because it reflects our very strong position that we have in the HoReCa channel. HoReCa stands for hotel, restaurant, and cafe and is definitely one-third of the total Belgium business and does add to the successful business that we have in terms of per capita. It is a learning obviously that we takeaway into Netherlands and we are working hard to bring the Netherlands at the level of the Belgium.

Customer landscape, as you can see, a balance between home and out-of-home in terms of percentage 45%, 48%, 51% overall, but again two countries are very close to one to each other and the customer landscape is absolutely different. Belgium is about the traditional retailers like Carrefour and Dillard’s obviously, but with a very specific player, it’s the number one retailer today, they called us our smart discounter and they are brand lowers, they are focusing on A-brands and we have a very strong relationship, it is escorted.

In the Netherlands, a couple of buying groups like Superunie, Bijeen, but obviously it all has to do with Albert Heijn, with absolute number one in the Netherlands, an important player, we are working very closely together. Very pleased also that Nielsen measures us as being in Belgium, the biggest FMCG company, but big is fine. It is absolutely great when they also consider us as their preferred not supplies, but they are preferred partners. We put a lot of time and energy in making sure that we understand our customers and that we cope with their desire. So, again in 2010, but also in 2011, we were elected both in the Netherlands as in Belgium as their preferred partner both in home channel as in cool drink channel.

And it’s not just about being number one, it is about again understanding how we can improve our situation year-after-after and that’s what we are going after. It is all about growing our business. I would love to read you through the whole catalog of growth drivers that we have, but I will just focus on a couple of them by country. Obviously, the first one in Belgium is about our growth portfolio that we have continue to develop it and continue to focus obviously from a big growth driver which is My Coke.

In a high per capita country, it is clear that we have – there are no low hanging foods or we need to continue to be innovative and focusing on where the growth is. One of these is as an example is a very in-depth channel segmentation we are conducting in the retail environment. And direct store delivery, selective direct store delivery has been a competitive advantage. We will continue to optimize and to make it even more efficient together with our consumers.

In the Netherlands, it is about driving the category, focusing on My Coke and moving from a 2-Coke strategy to a 3-Coke one, which is all about driving Coke Zero even harder and embedding the new brands that we have with Schweppes and Dr. Pepper. You have seen it with Tristan also, it’s about in the out-of-home the root to market identifying really the headroom for growth that we have the understanding, where it is and playing accordingly and finally about people.

Now, Hubert said Ben will highlight how we will continue to grow deeper capitals in Belgium? Yeah, it is true. We have 350 per capita and that’s not too bad. In Europe, it is the benchmark. Now, if you cross the Atlantic and you are moving to the obviously in U.S., but you go to the Latin American countries like Chile, Argentina, Mexico, that’s where you really find very high per capitas. And one of the drivers of that per capita is all about what we call occasion brand pack by channel. And I could explain that, but I will just choose a very simple example. When I joined Coca-Cola eight years ago, we probably have five or six SKUs on Coke record. We had a can, one and a half liter PET. We have the 20cl returnable glass bottle and that was about it.

Today, by making sure that we really understand, where the shoppers are, what kind of needs they have? By occasion, by channel, we have developed not only the single package into various different kind of PET packages, cans, different sizes, but also into multi-pack and also into promotional pack. So today, we moved from 6, 7 SKUs 18 years ago to roughly 35 on Coke Regular. A little bit more complexity in the supply chain, but definitely it has been a huge driver of growth in the last 15 years and looking back at Chile, Argentina, and Mexico that proves that we can continue on that journey; applying that obviously also to Coke Zero to Coke Light and to the other sparkling.

When we look at the stills environment, a couple of big opportunities in Belgium, we are really focusing on the re-launch of our Minute Maid brand in the second quarter, where we have changed packing, the taste where we have a really very strong integrated marketing campaign behind it. And then I talked about Chaudfontaine, which is an absolute success in the out-of-home environment in the last five years, now six years, and catching up very quickly again in retail based upon an innovative, not very conservative marketing program.

A second driver of growth is segmentation. Big retailers like Dillard’s or Carrefour have different banners and these different banners do serve different shopping missions. Hypers and supers most of the times were really focused on routine missions, whereas the smaller supermarkets will focus on fill-in and on proximity really goes for quick missions. Well, we have and we have applied the same kind of commercial practices and identified by shopping mission what kind of practice should we have, what kind of immediate consumes should we have by mission.

Now, if we look at these banners today in Belgium, our proximity, proxy delays is a proximity store, well guess what? Depending on the geography, depending on the competitive set of other retailers around that shopping mission is different. You have today proximity stores from Dillard’s who are not focusing on a fill-in or quick mission, but who are definitely routine missions. So, our job is to understand store-by-store and that is what we have done in the last year, identify what kind of mission every store, every single store has and to adapt our commercial policy in terms of display, in terms of shelf share, in terms of shelf space, what kind of package immediate consumption we should have. It is definitely a driver of growth both for our customers and for us it really drives value.

Daily execution excellence, that’s what we do everyday, that’s what we are for. And obviously, our direct store delivery system and a couple of big retailers helps us a lot, because we do manage at the same time the selling, the ordering, the merchandising, and building the displays in the stores, so it is a very powerful way of having great execution excellence.

Today, we still see opportunities to improve that by moving away from a static way of dispatching our system into a dynamic way and we can only do that based upon the knowledge and the know-how that we have from our customers again store-by-store based upon their data. Because we have a good relationship with our customers, they allow us to go after that opportunity.

In the Netherlands, as you have seen, the non-alcoholic ready-to-drink category, it’s all about growth. It is quite, if I may say, a bit of dull environment today in the Netherlands because the whole impulse environment is not really captured. Our business is about impulse and there is still a lot of headroom for growth over there. It is also by focusing on Coke Zero which still has a lot of opportunity.

Moving into the stills, obviously, Minute Maid and Chaudfontaine are growing fast in the out-of-home environment, but Aquarius, for example, is another great opportunity in the stills. Aquarius is the number one sports brand. We have established it since 15 years. It’s very strongly rooted in sports. And our aim is to broaden the occasions and make Aquarius an even more mainstream brand within the stills environment. And Capri Sun, you’ve heard it, it is a great add, because Capri Sun is very much complimentary to the total portfolio that we have both in Netherlands as in Belgium. And since we have also added above-the-line campaigns, this brand is really going really fast, really very solid double-digit growth.

The go-to-market in out-of-home. Out-of-home is a very complex environment and we have taken the time also in the Netherlands like we did in Belgium, like we did in GB and France. We learned from each other, you’ve heard the CCUH, just applying exactly what we have learned in the other countries to understand really how does that channel – how do these different channels look like, where are the opportunities for growth? How big is the headroom and how should we all organize, how should we organize, what is the look of success in these different kind of channels? That’s exactly what we have done and we have now started to roll out these programs also in the Netherlands.

And finally, organization and capabilities. It is absolutely clear that if we want to share best practices, if we want to learn from each other, we need to make sure that our organizations across the countries are quite aligned, not quite aligned, are fully aligned. That’s exactly what we’ve done. In the commercial environment, that’s exactly what we have done now also with field sales, where we have moved into a central organization in order to really focus on scales, beat and focus.

And we most probably have most of the feet in the streets. We have certainly the biggest sales force in our markets. The biggest find again we believe that the most qualitative sales force is even more important and that’s why we heavily invest in commercial capabilities by rolling out a very intensive commercial training program and you can see everything we do with a lot of people, hundreds of people that we have today in these sales organizations.

So summarized, the Netherlands is a lower per capita with a lot of headroom for growth by driving the category in retail, by understanding the headroom for growth in the out-of-home, and continued to drive the successful turnaround that we have known in the Netherlands since 2007. We operate in the Netherlands in an environment, where private labels and hard discounters are present. It is a competition. At the other hand, it is still a big opportunity we can grab into future.

And obviously, when you look at Belgium, the benchmark per capita in Europe, but still a lot of headroom for growth compared again with Mexico and Chile focusing on the broad portfolio, focusing on My Coke with the right programs obviously working very, very, very well with our customers is really at the heart of everything we do.

So, ladies and gentlemen, I do believe that we have the plans, that we have the plans that we have the resource and the people to continue driving a successful business. And with this, I would like to hand over to Thor. Thank you.

Thor Erickson – Vice President, Investor Relations

Thanks everybody. Thank you for the afternoon presentation. We are going to take a brief intermission. And at this point, we’d like you take a moment and pause and refresh. We do have a room next door, where we do have some samples. So, we invite you to come over and see that and see some of the displays and see some of the presentations and videos that we spoke of. It is now about ten after the hour, if you could rejoin us at half past the hour that would be good. Thank you.

(Break)

Thor Erickson – Vice President, Investor Relations

Thanks everybody. It sounds like just given how challenging was to get everybody back here. Hopefully, we all enjoyed our beverages and hopefully for those out there on the webcast, they also enjoyed a Coke beverage from one of their local bottlers, so no matter where they maybe. Thanks for coming back and thanks for being here again. We come through most of our operating territories. We do have one more to go and that is Norway and Sweden.

And with that, I’d like to introduce Mr. Paul Gordon, GM for the Norway and Sweden business unit. Paul?

Paul Gordon – General Manager, Norway and Sweden

Welcome back everybody and so just I’d like to introduce you to the two new members of the CCE family, Norway and Sweden, so more to do after the launch of the Vikings. As you would know, two small markets in terms of population, Norway have 5 million people, Sweden 9 million people. They are very distinct in terms of where they operate. They are very distinct in terms of their character. And over the next few minutes, I will think to drive some of those distinctions and identify the relevance of them.

Just a couple of points in terms of topography and demographics, two extremely long countries and that’s important from a distribution point of view. Sweden, however, the population is concentrated very much in the south, whereas Norway is a very lightly populated country, from a density point of view with a very geographic disperse population. The one uniting thing about two these countries, however, is that they both have tremendous opportunity for growth.

So, when you think about Norway and Sweden, you should think about affluent markets. They are strong, stable economies, Norway obviously fueled by the significant revenues from its natural resources, oil and gas. Norway is not in the European Union, it is not in the Euro zone. It’s a very independent market. Sweden is also not into the Euro zone, but it’s in the European Union. The Sweden is probably one of the strongest economies in Europe today, very broad-based manufacturing engineering culture and business and again a very, very strong business in terms of the general economics.

Now, the good news about these markets is that the non-alcoholic ready-to-drink beverage category is our customer’s, number one, value category. It’s important to them and it’s important to them in both markets. The even better news is that the Norwegians and the Swedish consumers, they like sparkling beverages. In Norway in particular, two out of three beverages consumed are sparkling beverages.

Now, compare to some of the charts that you’ve seen just before the break, you will see that in both of the countries sparkling beverages actually under index in terms of value share. Now, we see this as a real opportunity to reset the retail dynamics here. So, the different way to accelerate the contribution to category value growth coming from sparkling beverages. And I will highlight as we go through the next couple of charts, the real opportunity that we see in both countries for the accelerated growth of light sparkling beverages.

A brief word about share position. As you can see, we have a significant share advantage, a leadership position in both countries, but this is no time for complacency. We are very respectful of our competitors, in both countries Pepsi is distributed by Carlsberg and again it’s probably worth noting that in Norway, in particular, Pepsi Max has a disproportionate share. Now, you can look at this as a challenge or a threat or an opportunity and actually we’d prefer to see it is an opportunity and we do.

When we look at package mix, the chart on the left hand side identifies the share of our business by segment side and it’s pretty typical, My Coke representing 70% of our volume sales. The point I would like to make is referenced on the chart on package mix, where we see in Norway, specifically the very high share of the market, which is represented by PET. That quite clearly represents an opportunity for the future in terms of packaging innovation.

And when we look at our customer landscape just a couple of points here, firstly on Norway, I am just looking at the channel split. You will note that Norway, the grocery channel represents a very significant part of total NARTD sales. The reason for that is relatively obvious I think. When you think about the disperse population, you think about the weather, you think about the familial culture, those family occasions at home are really very, very important for beverage consumption in Norway. And there for us it’s really quite critical that we win when the grocery channel and really unlock all the headroom for growth.

When you also look at the consolidation from a customer perspective in these markets, the two of the most consolidated countries that we have in our portfolio, primarily dominated by local players, what we have founded in last 12 months is that our customers in these markets are very sophisticated, very sophisticated operating models, which from a CCE way perspective just falls in the good news category.

Here we believe we have experienced some proven track record with working with sophisticated customers in our four markets and been able to partner with these new customers for us is just excellent news. And this gives us confidence that we will be able to unlock the value growth opportunity that we see that exists in this marketplace. Now, unlike our other four legacy countries, in Norway and Sweden, we do not have the advantage group service. So, I cannot share with you any syndicated survey results. We are dependent on our customer’s own surveys with their suppliers.

Now, whilst we are often recognized as being the number one beverage supplier in both markets, I think it’s fair to say that our teams in these countries both recognize that we have a lot of opportunity to progress further in terms of value generation for our customers.

So, what does that mean? Now, this is a chart construct that you have seen several times already. Our growth model in these markets is very simple, is based on the fundamentals, is based on accelerating the growth from the core, is based on accelerating our customer’s value growth by together unlocking those unmet opportunities whether they be shocking occasions or consumption occasions. And our model for success in this market is underpinned by a remorseless commitment to invest in building world-class commercial capabilities, not companies.

So, let me just drew down one level further and look at firstly sparkling beverages. A couple of points to indicate here. Firstly, we actually look at our share across the category here, the categories, the segments is high. We are in a leadership position across all areas. Second point I just want to register is the opportunity that we see within sparkling for low-calorie cola growth. Regular Coke outsells light Coke in Norway 3 to 1, 4 to 1 in Sweden, a significant opportunity to grow our portfolio of the Coke Light, Coke Zero. It’s an exciting opportunity. This is very close to home for us.

Secondly, post that we’re very excited by the position that Norway and Sweden have taken in flavored sparkling beverages. Both countries are the pilot market for CCE territories and our new growth strategy for Fanta and Sprite, all natural products without artificial colorings, preservatives, or flavors. And this all about increasing the permissibility for consumption at home, again absolutely critical in countries, where the in-home occasion is fundamental for success.

But it’s not just about sparkling beverages. We have a lead brand position in sports drinks, in juice drinks, and in teas. In Sweden, we’ve recently introduced glacéau and we are extremely pleased with the progress. So, we’d now turn back and look at the portfolio opportunities in both countries. We’re excited by the opportunity for the headroom for growth in our core. There is also significant opportunity to develop over time our leadership position and the smaller than emerging categories instills.

Now, this is a chart that you’ve also seen before and Hubert referenced it in his presentation. The CCE is all about the customer. We’re all about driving customer value growth. We have a model to be applied in all markets, the CCE way will be and is being applied in Norway and Sweden and it is very, very simple and straightforward.

Our goal here is to establish strategic joint multi-year growth strategies with our major customers. And as agreed with them and defined with them, the priority opportunities for growth on a multi-year basis together invest a lot of opportunities, which go beyond the day-to-day tactical growth strategies of price and promotion. And as said previously, we do that by investing in people. We invest in the training programs and we invest in building those commercial capabilities and we invest in building the infrastructure.

For those of you being involved in the soft drinks market for any length of time, you’ve heard of innumerable statements about the importance of the media consumption. It’s strategically important to grow the business, not only does it balance the business from a customer and channel perspective, but more importantly it builds the consumption occasion and it also builds brand equity. It’s strategically important for us. Pervasive availability is the way to drive per capita consumption in the longer term.

Now, both Norway and to a lesser degree Sweden are relatively high per capita market risks, but there is a significant opportunity for growth and we believe that the pervasive availability is absolutely fundamental for the long-term acceleration of our business in these market. We’re making progress. Quite clearly, our outlet execution capability is a competitive advantage, so there is a long way to go.

The sales teams are continuing to win new distribution, new outlets up and down the street, but importantly we are also winning those national customers who control the strategic availability account, fundamental for creating those memorable moments of consumption for our consumers. An example of that would be location. Location are the number one consumer channel for customer in Norway. We’ve just established a five year agreement with locations to begin next year and it’s a strategic partnership, fundamental to making in Norway Coca Cola an intrinsic part of the everyday life of Norwegian consumers.

Now, again to this month we actually complete our first year, our first year as a new team in Norway. The integration has gone very well. It’s well ahead of plan on all measures and that is in no small part due to the competent and the collaborative support of the local teams.

I think I can share with you the fact that we have been able to export the CCE way into Norway and Sweden and many different areas in the commercial capabilities arena within supply-chain, but also within the underpinning function such as IT. There are many examples how our operating model is immediately delivering benefit in that market, but I would also say it’s a two-way stream.

We have learned a lot from the Norwegian and the Swedish teams and I think as a consequence, both of the partners, the legacy CCE team and also the new members of the CCE family are stronger businesses as a consequence. So we kind of look at where we are, we are a kind of an 11 months end. I think it’s a very, very exciting journey. It’s a challenging journey. We have our highs and lows. We are learning the way to work with each other. They coaches of our markets are not the same, but we are making progress and it’s incredibly fulfilling to see that progress week in week out.

We genially believe the CCE way will raise the sea level in these markets and we do believe that we will advance our leadership position in both countries and we do believe that when syndicated surveys are available, we will be able to stand in front of you and say CCE is valued by its customers as a number one customer service business in each country. Thank you.

With that, I will now handover to Richard, who share our growth plans and our development plans on supply chain. Thank you, very much.

Richard Davies – Vice President, Operations

Good afternoon. I am Richard Davies, Vice President of Operations and today I am representing Stephen Moorhouse, Vice President and General Manager of our Supply Chain. Over next several minutes I have the pleasure of giving you an overview of CCE’s supply chain. As you will see from the map here, we operate across seven markets, have 17 manufacturing plants, having 96 production lines all supported by 21 warehouses. We have pan European scale and we’re proud ourselves on our localized approach with over 90% of our volume produced undistributed in country allowing us to deliver to over 1 million customers, refreshing approximately 170 million consumers annually.

You heard about our global operating framework. And in supply chain this really represents our true north. Our priorities are clear. We want to be our customers’ most valued supplier and to do that our supply chain must have world class capabilities. Operation vacancies key to achieving this along with having the right people with shared values and it goes without saying we must continue to accelerate our journey towards the greener supply chain.

We have our clear destination to be our customers’ most valued supplier. To do this, our goal is to be a performance driven consumer and customer centric focused supply chain. This is supported by four key strategies and characteristics. Firstly, we have an efficient and expandable infrastructure that is cable of supplying a grown portfolio across an expanding footprint of the best possible cost. A great example of this is our Wakefield plant in Great Britain, the largest bottling plant in Europe and the second largest in the world. Over next year we are planning to expand with an automated high rise warehouse to accommodate an incremental 26,000 product spaces an increase over 150%.

Secondly, we have a flexible and response to supply chain to deliver our customers’ increasing needs through strong collaboration ensuring all of our brands are produced at the highest quality standards. Thirdly, we are maintaining and enhancing our supply chain leadership position in the industry through the data execution of responsible and sustainable CRS principles. And last but by no means least we have a high performing engaged and skilled team committed to winning every single day. This is a CCE way for supply chain.

We have a solid track record of success and have consistently year-on-year moved the needle forward with all of our key metrics enabling us to increase productivity, reduce cost, improve customer service and embed sustainability and quality principles into all of our processes and management systems. Since 2006, the amount of water a plant uses to make one liter of product has decreased by over 17%. We are especially proud of our 2010 rankings for water ratio usage within the global Coca-Cola system. France is number one, and Great Britain is number two. Over the same time period, the energy consumed at each of our facilities has decreased by over 14%.

To really sweat our assets, we use line utilization as our metric. As you can see from the chart, we’ve driven significant improvements here, which continue to enable us to minimize investments in new production lines, as well as improving labor productivity. These were of course only some of our metrics. With us include safety, quality and customer satisfaction and I’m pleased to report that we see similar favorable performances in all of these two, allowing us to reduce our costs and improve our customer service. And this track record of success is not only seen internally, but as you have heard earlier today our customers recognized our performances as reported in the Advantage Group survey. Be assured though, we do not sit in our laurels. It is this great progress that gives us continued momentum and energy to keep moving forward.

We believe our supply chain provides a competitive advantage more importantly helps us achieve our goal of being our customers’ most valued supplier. This advantage comes from our size, our ability to leverage a global system scale, our structured approach and our focus on having and improving upon our world-class capabilities. In logistics we have both pioneers in planning team and a strategy team. These teams are focused on fulfilling customer demand, network optimization and insuring we have a fit-for-future supply chain. They work closely with local country logistics teams who are responsible for order management, execution and customer collaboration. In procurement we have focused on not only managing cost and quality or key inputs, but also on sustainability and working with our suppliers to identify, develop and implement new cost saving initiatives. Our operation team comprises of manufacturing and distribution and this end-to-end accountability is key for producing and delivering quality products on time, in full at the lowest possible cost.

Supporting all of this is our engineering and technology team which focuses on ensuring the optimum return on supply chain capital employed by drawing the design and delivery at the right supply chain infrastructure and assets in the appropriate locations. They also support the development of the latest technology to enable low cost, efficient and flexible production. Our commercialization team, the new product launches and our team enable our CRS and quality commitments including our leadership in recycling. As you can see, we are very focused groups working together while leveraging our scale. This, we believe, gives us competitive advantage.

Now, let’s take a closer look at some of the supply chain functions starting with procurement. Our procurement strategy is built on cost optimization, risk reduction, and maximizing efficiencies. Our total volumes give us considerable production scale with our key suppliers in all key categories which gives us competitive advantage. This supplies even with the consolidation of the major packaging suppliers.

In addition, we combined our volumes to collaboration with other bottlers in the global Coco-Cola system to achieve further benefits of scale. We are able to hedge all key commodities such as aluminum, steel, sugar, power, gas and fuel using the manufacturing and distribution on the financial markets with the exception of PET resin where there is no direct instrument. Our aim in hedging is to reduce risks and provide stability to our business plans. We also reduce our costs by executing a number of improvement projects and I’ll talk about that in my next slide.

To manage our costs, we have executed and will continue to execute a series of annual improvement projects. Our packaging strategy is aimed to drive productivity and sustainability. In our small PET portfolio we are currently in the process of removing cardboard trays, which will deliver 3350 tons of material savings per annum. We continue to reduce the weight of our package types. Since 1994 we reduced the weight of a 500 ml PET bottle from 36 grams to 20 grams, a reduction of 45%. Our focus on cans has enabled us to reduce the weight of aluminum cans by 15% and steel cans by 20% over the same timeframe. In addition to vertical integration of all of our in-house bottle blowing capability along with the proportion of our pre-form manufacturing requirements we continue to optimize our costs and support our CRS agenda.

Before getting into more details on manufacturing, I'd now like to show you a short video that gives you an overview of the manufacturing process.

(Video Presentation)

Thank you. I hope you enjoyed that video and you will be able to see, for those of you who visit in the plant tomorrow, a lot of more of that with Bruno and his team. As I said earlier, we do operate a pan-European manufacturing network with the average plan housing between five and six production lines. Approximately half of our facilities run 24/7 and all have the capability of flexing to this schedule as required.

Our strategy is to make and sell in country and we achieve this with over 90% of our volume. Our locations are very well matched with populations and for our major pack types large PET, small PET and cans our production capability is spread regionally. We have future line spaces available, so in a short to mid-term there is no requirement for new facility. Our focus is therefore to continue to optimize and leverage each of our existing locations. We do use co-packers, but these are used to specific products, less than 5% of our total volume and we would always seek to bring these in-house where beneficial.

We are passionately committed to world-class manufacturing standards. The execution of a common standard organizational design across all of our plants is a first of the Coca-Cola system. Tat has allowed us to deploy best-in-class resourcing standard as well as enabling agile, best practice sharing for the consistently deployed management structure we have created. Through our operational excellence programs, core competence we have identified and documented the very best operational practices from across our operations and in turn expanded those across all plants, allowing us to improve our performance across the balanced scorecards.

Finally, having established the standardized processes we have embarked upon the deployment of a common and consistent systems framework, which is further leveraging additional efficiency across our end-to-end network. Developed over time, the CCE way continue to be an effective model to continuously raising the bar in our operations, as well as providing a proven model for leveraging synergy from current and future territory acquisitions.

So let’s now turn our attention to our customers. The CCE way in our manufacturing and distribution operation gives us the flexibility and responsiveness in offering our customers different routes to market depending on their needs. Our customers in GB, France and Netherlands predominantly take their deliveries through central warehousing allowing them to benefit from a number of advantages. Most notably a tailored approach, the direct airlines route to market with their supply chain infrastructures. One 10% of our total volumes are delivered direct to store and our customers are continually evaluating alternative delivery models. Our flexibility in this key area is a competitive advantage.

To be our customers’ most valid supplier, the key for us is to strike the optimum balance between our cost and service. Our recipe to success is through close collaboration with our customers. For our key retailing partners, we are proud of the fact that the strength of our relationship and our track record of consistent service performance allows us now to help them manage their inventories. This level of visibility into the customers’ world is one of the things that drives our supply chain processes and gives us competitive advantage. As on-shelf-availability remains the number one priority for our customers, more and more they’re looking for us to help them improve in this area. And once again, we have delivered on this as we play a lead role in that promotional forecasting process. In addition, based on individual customer’s needs, we’ve developed a range of ready to display packaging solutions, which contribute to improved on-shelf-availability.

To reduce our cost, we must continue to optimizing network. Backhauling is a great example of this. After customer truck has delivered its product to local store, it can be use to pick up products in one of our production sites instead of returning empty to the customers’ warehouse. Another great productivity example is one in which we work together with the Dutch government to change legislation. This resulted in the introduction of the Eco-Combi vehicle in the Netherlands used for customer deliveries. The Eco-Combi can carry 36 palates compared to the traditional 26. This is good for our customers, the environment, and CCE.

This brings me to the end of my presentation, but before I hand over to Bill, I would like to summarize the key supply chains takeaways. We have absolute clarity in our destinations, to be our customers’ most valued supplier. Our customer and performance focused and lot of competitive advantage that deliveries value for our customers. Our pan-European manufacturing and distribution operation is focused on local execution and drive continuous improvement in every area of our supply chain. We partnered with the Coco-Cola System to leverage global scale. The CCE way is a proven roadmap for success that is guided by our global operating framework which penetrates every area of our operations to deliver world-class results both now and for the future. Thank you.

Bill Douglas – Executive Vice President and Chief Financial Officer

Thanks Richard. I appreciate it. Okay, we’re getting close to the home stretch here. Got two more presentations and then we’re going to take some Q&A. I have the privilege of walking you through the finance section, and hopefully, this is going to have a little bit more relevance and with the background that we’ve taken you through with each of the operations and sections you can see the underlying building blocks in support for our financial priorities and our financial performance.

If you go back to our operating framework delivering long-term consistent growth, these are the underpinnings of that. Consistent earnings in line with our long term objectives, maximizing the free cash flow and maintaining financial flexibility, which you saw in our release today I think is living that. Improving our return on invested capital with our new structure, we really changed our ROIC profile and you’ll see later on, some example of that and continuing to drive long-term profitable growth.

How are we going to do that? Firstly, and most importantly, job one is delivering our core, organic business in line with our long-term growth targets. John touched on those earlier, you’ve seen business unit by business unit, how we’re going to do that and I’ll talk a little bit more about that little bit later. Secondly, optimizing our capital structure, clearly where we are today is well below our stated long-term leverage targets again the share repurchase program that we announced today as part of that solution. I’ll talk more about that later. And then lastly investing in higher return opportunities whether that’s ongoing capital investment or M&A opportunities. And all of that ultimately is going to allow us short, medium and long-term to appropriately return cash to shareowners and create value.

I won't belabor this point. It was in the release. We affirmed our previously stated guidance for 2011 verbatim with what we communicated back in July. So all the lines have not changed. Any questions we’re happy to take that later on. And we also affirmed our long term growth objectives. These are very robust. They are challenging. And as John mentioned they are higher than what the objectives were of old CCE. Revenue growth 4 to 6, and over time we would envision that to be a balance of both volume and pricing. However, in any one year, we may choose to utilize this lever slightly different based on market dynamics that we find and it may vary by market as well.

Operating income will be benefiting from our SG&A leverage. I’ll touch on that a little bit later. EPS growth that’s a normalized EPS growth notwithstanding any significant share repurchase programs, and again continue to significant improvement in ROIC year in and year out.

John mentioned this as well, one of the great predictors of the future is what and how have we performed in the past. Here you can see a five-year CAGR for our current European footprint excluding Norway and Sweden, just because we don’t have that data for that period to disclose publicly in our pro forma basis, but you can see a five-year CAGR of revenue growth of 5%. And I would remind you most of that period of time was in a fairly difficult macroeconomic environment. So a lot of people say how is the market, how is the consumer behaving, how do you find the macros. The macros are challenging. Our consumers are under stress. However, our category is fairly recession resistant and our brands are holding up well within the category as well. Our growth will come from our core sparkling beverages. Clearly, 85% of our total volume today is in the sparkling category, but it will be nicely supplemented by additions and expansions of our still product range.

A lot of attention has been paid to cost of goods over the past year and I think it will be again as we go into 2012. If you look at our cost of goods, we tried to simplify and articulate what the drivers of our cost of goods sold per case are. We've communicated this previously, but we've updated based on current dynamics. If you look at our total cost of goods spend, 55% of that is in concentrates and finished goods. As you heard from Rich, finished goods would be things Ocean Spray, some Capri Sun, some new brands that are gaining traction before we bring them in-house and also supplementing it a little bit until we put in new lines. The other comment to highlight is 85% of our COGS are truly variable and only 15% are fixed or relatively fixed.

And then lastly only about 30% of our total cost of goods sales is really exposed to commodity inputs whether that’d be packaging sugar or other commodities. And you had a really good deep dive from Rich on how we go about doing that from a total supply chain perspective and how we try to get efficiencies out of the system from commodities all the way through to logistics and production. Again another perspective on commodities, it varies a little bit by commodity whether it’s PET, aluminum or sugar, but suffice to say the underlying raw commodity represents less than 50% of the total spend on that area i.e., completed sugar or completed can or a completed PET bottle and greater than 50% of the total cost of that is in the conversion. And again, the conversion would be more subject to global supplier arrangements and inflation as opposed to the volatile underlying shifts in the commodity. And if you drill down that further, so if you go back to the prior page, where we say 30% was commodities, now we’re seeing really only about 15%of our total cost of goods sold is actually exposed to the underlying core commodity volatility.

Looking at SD&A, we have experienced leverage from SD&A expenses. We envision continuing to do that. What we’ve tried to do is to give you two looks of that from a how do we spend it. Simplistically, on the right, about 45% is labor, about 45% is non-labor, 10% would be D&A. Alternatively, on the left side of the bar chart, 35% would be supply chain, that’s principally logistics, 30% sales and marketing feet on the street, and 25% G&A back office, again the D&A is the same in both years. We do see continued leverage from SD&A. We are focused on aggressively managing this entire category with our ownership cost management initiative which has been in place for about three-years. Every year the incremental opportunity to be clear is less, but it’s a mind set of how we approach this category.

And lastly, as you heard from Rich, our flexible route to market gives us incremental opportunities to manage this arena as well. John touched on this earlier, but if you take our long-term growth targets and you look at the back half of 2011, which we’ve not reported on yet, and you take back half of ‘11, ‘12, ‘13, ‘14 and just use the median of those long-term targets, you’re getting a cash flow generation of approximately $2.5 billion which is obviously quite significant. If you then layer on top of that the flexibility that we have from our underleveraged balance sheet and taking it up to the state of range to 2.5 to 3 times, you’re going to get another cash flow potential or ability for us to invest of another $2 billion, and that’s existing leverage plus the increased leverage that will be created as our balance sheet and P&L grows with the business over the next three years.

Just as a reminder, this is one of the incremental pieces that we did put in the earnings release today. We expect our year-end net debt-to-EBITDA to be about 1.8 times, significantly well below our 2.5 to 3 times and that’s part of the calculation that I referred to you on the prior chart. Return on invested capital, again, we step changed the ROIC when we created new CCE. Old CCE was somewhere in the 8% to 9% range; new CCE is approximately 13%, that’s year in 2010, suffice to say that significantly ahead of our weighted average cost of capital and we see the opportunity continue growing that going forward with our existing geographies. This is one of the things that I’m most proud of and part of it’s really good execution, but to be honest, part of it was just benefit of timing. As part of the transaction, we transferred our existing debt portfolio over to the Coca-Cola Company and we were in the markets at a time when the cost of debt has been very low.

Couple of things I would highlight here. One as you can see very balanced debt tranches maturities year-in year-out. None of those years are higher than what our anticipated net income or cash flow would be expected to be for those years set falls in the good news category from a refinancing perspective unlike where we were, Mr. Faucher, back in 2008, you remember those days. Also our weighted average cost of debt is less than 3%. Again, part of that is just fortuitous timing.

And lastly, I had mentioned on this chart we were in the debt markets last month opportunistically. We raised $500 million, $250 million five-year tender at a coupon of 2%, most of you remember that, and then $250 million 10-year tender with a coupon of 3.25%. So that offering both lengthened our maturity profile on the one hand ever since slightly and reduced our weighted average cost of debt on the other hand ever since slightly. So,, even with the share repurchase that we announced today, with that debt offering that we did last month and our free cash flow, our balance sheet still remains in very good shape and a lot of incremental capacity there.

We have been trending and targeting and communicating a capital reinvestment rate of approximately 5% of our net revenue. Here you can see with a five-point convention, 5 percentage point convention, how we spend our CapEx. 45% of that is in supply chain, a lot of the areas that Rich talked about earlier; 40% is in cold drink equipment, that’s supporting our boosted on initiatives, but also general cold drink placements and supermarket chains as well, and then 15% will be principally IT and then there’s some other in there, but it’s principally IT. Important to know, of that spend, approximately two-thirds of that is in what we would consider growth CapEx or revenue enhancing, generating capital, and only a third or less of that would be replacement CapEx. We do have a very rigorous approach to CapEx similarly to how we manage operating expenses as well.

So if you look at all of that going forward, we are continuing to identify acquisition opportunities. Our focus will be on opportunities that are closer into our core where the risk of execution would be less. We are identifying multiple opportunities. We would conduct very diligent review of that and due diligence as you would expect, and then ultimately if and when we do choose to go forward with an acquisition, as Paul mentioned, at the end of the day it’s going to be all about execution in doing things the CCE way to ensure whatever path that we may choose is going to be enhancing and value creating to CCE shareowners. And as John mentioned, any alternatives would also be compared to our existing model as well as returning cash to shareowners.

So all that being said, our cash flow capability I think we’ve hit it pretty hard is substantial. It’s creating a lot of opportunities for reinvesting in the business, for returning cash to shareowners as well as M&A opportunity and at this juncture given that $4.5 billion that we referenced earlier, we don’t think one is at the expense of the other. With our share repurchase announcement today, we are confident that we can continue doing both going forward. And we have a very strong track record of doing that in the past and we would envision continuing to do that prospectively.

So key takeaways; solid history of growth, we think history is a great predictor of the future, notwithstanding the challenging macroeconomic environment. Our capital structure is clearly an advantage for us. We do have very stretching targets, but we think they are very attainable and high cash flow generating capability and hopefully you’ve got to a deeper look at our team and understand our level of confidence now that you’ve been exposed to the rest of our team to deliver a very solid 2011 as we’ve previously communicated and then continued its history of success going forward in 2012 and beyond.

So we got one last formal presentation and then we’re going to open it up for Q&A. I’d like to introduce my colleague Laura Brightwell, who is managing our public affairs and communication area. One other comment I would mention about Laura is this summer she moved from Atlanta to London. Lot of you asked about how was our office evolved. We actually had about 12 of our team members who relocated over the past summer principally from Atlanta to various European cities to support our new structure. Thanks, Laura.

Laura Brightwell – Senior Vice President, Public Affairs and Communications

Okay. Thank you, Bill. So, good afternoon, everyone. I am Laura Brightwell and I'm leading the Public Affairs and Communication function for CCE. It's a real honor for me and the first time to actually present to a group such as yourselves. So I’m really looking forward to sharing with you some of the insights that we have on our broad CRS, Corporate Responsibility and Sustainability agenda. We’ve heard bits and pieces of it today throughout all of the business presentations. So it gives me the opportunity now to share with you in the broader sense. But before we got started, I thought it would be important to actually set the scene so that you can see some of the challenges that we are facing and to lay out for you also how we will begin to define what the business benefits can be to have a really robust CRS agenda. Let’s roll the video.

(Video Presentation)

The layout for us and very big challenges that are ahead of us, but equally important we know that there are some big business benefits for us. And I thought it would be important to take you through what we’ve defined as our six business benefits. The first being capture operational efficiencies, drive innovation and effectiveness and eliminate waste. It’s all about doing more with less. Secondly, effective stakeholder and issued management, driving fully engagement and advocacy. We heard John talked earlier today about how it is a true engagement driver for us at CCE and we know that it will continue to be so. We know that customer expectations are on the rise. We’re hearing more and more from them about sustainability issues and we wanted to make sure that we’re not only meeting those, but exceeding and then also meeting the growing consumer trends, but also enhancing the image and reputation of our system, our company and our brands.

Our journey has been an interesting one. As a Coca-Cola bottler, we’ve always been committed to our communities. We’ve had a very still and terrific approach over the past decade. But in 2006, because of the issues were on the rise, we knew that we needed to build a world class CRS platform and we began to challenge ourselves. And as John Brock came on board he set the vision for us and he said I want us to lead and sustainability across the global Coca-Cola system. In 2008 we have pushed ourselves further, and we said, he said, let's go further and not only be the leader within the beverage industry, within coca-cola, but within the beverage industry. And then now as we’re looking at and beginning to measure and have really rigorous metrics around sustainability, you heard Richard talk about some of those in supply chain, we now want to be the leader across the food and drink industry.

Our focus areas are where you would imagine they would be, for our stakeholders expect us to be best-in-class. Three are environmental, water stewardship, sustainable packaging and recycling and energy and conservation and climate change, but equally important there four others. We have to be leading in the product portfolio. We have to be leading in the workplace, community including active and healthy living. We have a robust governance structure. It's informed by a CRS advisory council and this council is comprised of leaders across our business, across geographies, across functions. It helps to inform the strategy, but this strategy is guided by our CRS Board of Directors committee. And what’s interesting we are at CCE one of only 95 companies within the Fortune 500 who has a sustainability committee. So there are fewer than 20% who have a CRS committee.

We believe this adds significant strength to the governance of our company and to the strategy that we’re setting in this area. You’ve also heard today and I don’t have to reiterate that the key achievements that we have been making across some very important areas. We are the most water efficient user within the global Coca-Cola system. It’s something we’re proud of and we continue to make that ratio go down and get better and better, closer to getting to one-to-one. We have also been driving our carbon down, as we’ve grown the business operationally within our business of, carbon reduction has gone down 4%, while volume has going up 4%. Packaging were light weighting. And you’ve seen and you know about the innovations coming from the Coca-Cola Company with natural sweeteners and also about the plant bottle. We talked about that too as we’re rolling out this bottle across our territories.

And interestingly, Simon earlier today talked about the joint venture that we’ve announced in Great Britain with ECO Plastics to ensure that we are able to change the industry around our recycled content to ensure that we are able to produce the bottle that we want in GB. It’s helping us to meet those recycled PET goals. And we’re gaining external recognition. We were early signatory of the UN Global Compact as well as its CEO, Water Mandate and we’ve been pushing for policy to help encourage investments in Green Technologies. We signed a Copenhagen Communiqué. We signed the Cancun Communique. But equally and most recently we signed a business call, and this is a call for the EU to help agree to and drive down emissions reductions by 30%. It’s something that we felt very. I think that it will be very important for us to be a part of and show our leadership stance.

We also provide our carbon data to the Carbon Disclosure Project on an annual basis, and we are a member, a long time member of the FTSE4Good Socially Responsible Investment Index. That is something we’re very proud of and our work has been recognized by number of rankings. And I know John already talked as well about the recognition by Newsweek in the Green Rankings.

So, CRS expectations are on the rise and we want to meet them. The demands of stakeholders are on the rise. They want us to be a part of the solutions and we’re trying to find how to do that. What is it mean to be a part of the solution and be leading the way.

How can we protect our license to operate? We engaged with key stakeholders across seven countries. There are 25 of them NGOs, non-governmental organizations, government officials, academic, thought leaders around this area to ask them some important questions about what does that mean to be a leader in sustainability. And they told us four main things. One, we needed to develop a stronger sustainability vision. They said we need to take broader accountability for our impacts up and down the value chain. They said chose where you want to be a leader. You’re focusing across the seven areas so where can you really lead, and then lastly, innovate.

This has been guiding our new strategy and I thought that I would just give to you today a sneak-peak into what that strategy is. It hasn’t been publicized yet. But it is, as we’re setting forward our new vision and our new priorities and thinking about responding to stakeholders, I thought it was important to share with you today. At the end of the month, we will be making a more public announcement about this work. The tagline is “Deliver for today, inspire for tomorrow”. The sustainability vision is, we will deliver for today growing a low-carbon, zero-waste business and inspire a change and lead change for more sustainable tomorrow.

The vision is underpinned by three major priorities. The first, “Deliver for today”, this really is executing against our core sustainability platform, best-in-class across all of the commitments that we talked about today. Lead the industry, where we feel like we can lead the industry is in lead two major areas, sustainable packaging and recycling, and energy and climate change. And third, innovate, we know we can’t do it alone. We know that expectations are rising and we need to be partnering better and more smart with our suppliers and our customers. So we think that this new vision and framework and plan will help keep us on that path to sustainability leadership.

So with that, that’s the presentation, and now I would like to invite John Brock up to take us into the next session.

John Brock – Chairman and Chief Executive Officer

To Darren and Bill, if you would like to join me if you were basically on our wrap up phase I’d like to thank all of our presenters today. Great job. I’d also like to thank all of you for your attention. I know a lot of you flew overnight and it’s not the easiest thing to sit in a closed room when you’ve come overnight from in the United States. But we are at the wrap-up session. I have four takeaways that I would like to mention one more time and then we’ll pass it open for questions. And those are, we have a solid history of growth. You’ve heard several of us say several times that the best predictor of the future is in fact the past, so we continue to believe that, and that’s true even in challenging macroeconomic times. We are delivering on our strategic priorities. Hopefully, you’ve heard that today. And we are on track to deliver 2011 guidance.

We have a very favorable and flexible capital structure. Bill talked about that, lots of flexibility, and we will make sure that we have financial priorities going forward that makes sense and that we will be focused on driving long-term sustainable growth. And finally, we have teams and plans in place to achieve our long-term financial objectives.

So, those are the key takeaways. It is now time to take questions. So, we’re here and I think we’ve got a microphone that, two microphones in fact that we’ll pass around. So if anyone any has any questions you’d like to raise, now is the time to do so.

Question-and-Answer Session

Operator

Just one quick thing, as you’re asking questions at this course, if you could please state your name and your firm, so we have it out there for the people in the audience also know it’s coming from. I appreciate that.

George Ho – Deccan

Okay, can you hear me? George Ho from Deccan. Bill, I was wondering on the commodities profile. I think you availed a hedge commodity that the prices that were much better where they are today. So, I guess the question is, as hedges roll off and look into next year, what kind of price increases we need to get to maintain your margin structure? And is there any risk that you can’t get that just given sort of how challenging the consumer environment is?

Bill Douglas

Good question. I’ll give a little bit of context just to ground everybody. I think you know we’ve said heretofore that we expect our 2011 cost of goods sold per case inflation to be approximately 3% for the all reasons that you mentioned, George. If we look forward, we are continuing to layer on coverage for 2012. There is a lot of volatility in the markets. And at this juncture, I would feel confident in saying that our 2012 cost of goods sold inflation would be less than 5%.

Now it’s still early. We’re still finishing some coverage for 2012. We’re also in a process of finishing our pricing plans for 2012 as well. But sufficed to say, our strategy would be to maintain margins in a relatively inflationary perspective. But one thing that I do have confidence in and I would look to Heber is, if you look at our market position which you’ve seen a lot of over the last four hours, our brand strength is superior to any of our competition to be able to take pricing and mitigate any bargain implications from that. So that’s how we’ll be building our 2012 plan. And I think when we get to December and have our normal outlook call, we’ll be able to give a little bit more specificity and answer the question with a little bit more confidence. But that’s where we are today.

John Brock

Judy?

Judy Hong – Goldman Sachs

Judy Hong from Goldman Sachs. Just three question on cash flows and capital structure opportunity. Bill, you talked about $2.4 billion opportunity over the next three years or 3.5 years. If we look into your share buyback announcement of a $1 billion today at least I guess $1.4 billion, so in terms of an M&A opportunity are you indicating that you won’t look anything beyond the $1.4 billion and then you’re checking now. So, secondly, in terms of Germany, just as you think about the timing of Germany announcement and a decision to announce a $1 billion buyback ahead of making a decision on Germany, just wanted to get your thought process? And then the cash flow guidance that you‘ve given, does that include the cash taxes that you’re paying today and then the cash taxes that you’re getting back three years from now?

Bill Douglas

Okay. The first part of that – keep me honest don’t mind answering your questions. The first part of your question, again, if you look at the available cash for both M&A opportunity and return of cash to shareowners between now and 2014, we see that numbers being $4.5 billion, $2.5 billion from operations and $2 billion from leveraging up our underutilized balance sheet. So, we feel very confident, as I said earlier, in being able to do both. So, the size and scale of one or more acquisition opportunities we don’t see constrained, we’re going ahead with the incremental $1 billion share repurchase program that we announced today. And then, if you look at the current guidance, $475 million to $500 million for 2011, that does include the incremental cash taxes that we are going to be paying. So, the conversion rate will go up next year as the headwind from the cash taxes diminishes, if you will.

Judy Hong – Goldman Sachs

So the $2.4 billion includes everything that you’ll get back by 2014?

Bill Douglas

Yes, and that’s a big round number by the way, obviously. Did I answer all three parts?

Judy Hong – Goldman Sachs

Just in terms of timing of Germany announcement and that was just…

Bill Douglas

Well, given the $4.5 billion, we feel confident in doing both. Other questions?

Christine Farkas – Bank of America/Merrill Lynch

Thank you very much. Christine Farkas, Bank of America/Merrill Lynch. Just to clarify, Bill, on the guidance in your press release. The currency was unchanged from your last outlook. There has been some movement in recent days. I suspect these slides are printed prior to Friday. I’m just wondering if your guidance is intended to suggest that the movements in the third quarter along with your outlook in the fourth quarter washout to the same, or is there something else that we should look at that with the buyback not move the needle, doesn’t move the needle in the fourth quarter, that kind of thing help us with the guidance?

Bill Douglas

Sure. Good question. If you look at the way, we phrase our commentary on currency, it’s not trying to be cute, but we are not trying to chase a daily spot rate. It’s just recent rates. So, if you were to extrapolate things at today’s rate, might it be slightly different. Maybe, however, I would say once we get into September, given the seasonality of our business, the impact of currency diminishes. So, might it be a $0.01 off at today’s spot rates, directionally, that’s kind of what we are talking about that I feel very confident with the approximately $0.15. And I think once we get into October and we do our third quarter update, there will very, very little volatility on currency of that juncture.

John Brock

Okay, let’s go back there. You got the mic back there. That’s fine. Ian.

Ian Shack – Nomura

Yeah, Ian Shack from Nomura. Well, congratulations. We have not had many European beverages companies reiterating guidance recently. But I was wondering if you just help us a little bit, I mean, just clearly the world has changed quite a lot since July when you last spoke to us and we have a lot of beverage companies talk about we have consumer confidence in some European markets, and this is probably one of the best days we have for the last couple of months. I mean, can you just give us a little bit more context of what really happened in the Q3 in the key markets?

Bill Douglas

I think unfortunately we are not going to give intra-quarter update. I think you hit the nail on the head that we thought we were trying to communicate. When we did our Q2 earnings call at the end of July, we knew what our July performance was. So, that was embedded. Clearly, August is now behind us as well and we are well into September. So, the point is our business is continuing to perform in line with what we anticipated. So, is it a challenging choppy external environment? Yes. Was the weather bad in July? Yes. But we are sticking to what our previous guidance was and we are confident in our ability to deliver the full year as well.

John Brock

And we get routinely asked the question about consumer confidence and the fragility of the European consumer. That’s all very real. We see it. We think it’s there. I think the reality though is, as you’ve heard us say several times today, we’ve got remarkable brands. We have brands that consumers want. They provide moments of pleasure. We have got a price package architecture, which isn’t particularly channel-sensitive. And for all those reasons, we remain confident or we would not have reissued the statement that we issued today.

Ian Shack – Nomura

Can you point to anything what sort of changed the dynamic in the business or has there been any sort of trend in terms of trading way from IC to future consumption? Is there anything really has changed in the last couple of months or is the bottom-line nothing has really?

John Brock

I would say broadly nothing, but Hubert you want to comment?

Hubert Patricot

No, nothing. I would say on the positive line, Simon shared with you the activation we are having with the Olympics in GB. I think one critical factor for us is that we have much more displays activity this year in the summer in GB than we had last year, thanks to the Olympics activation.

John Brock

Okay. Let’s go back to where we were. Right there, okay.

Mark Swartzberg – Stifel Nicolaus

Mark Swartzberg, Stifel Nicolaus. Three questions. I guess, John, can you speak generally for the organization’s acquisition capabilities generally? And then particularly in a scenario we are doing a large acquisition like Germany, what kind of background you think you have to make you successful there? And then I had few more business-oriented questions.

John Brock

Well, I think Sweden and Norway have been very good learning experience as far as both the due diligence, completion of the transaction, and then as you heard Paul say today, what we have done for the first year. Now, admittedly, those are both pretty modest sized deals compared to something like Germany, but I think they have been very good experiences for us kind of an A, B. We have got a team, a broad team, that’s done a lot of deals over the years. So, I think we understand pretty well what due diligence is about, what it means to actually analyze an acquisition opportunity and to determine can we generate value here or not, what is the underlying value of the business, and then as we apply our CCE way to it, can we create more value, I think we are pretty good at that.

I think the place that’s going to be one, where we are going to have to really think long and hard about how to make sure we are ready for it is from a people’s standpoint because I think we are realistic enough to know that we haven’t done, other than Sweden and Norway, any mega acquisitions. It’s how we are going in with our eyes wide open. If we decide to do whether it’s Germany, or frankly, whether it’s anything else, we know certainly Pam Kimmet from an HR standpoint knows that we have got a huge, huge people agenda, which we are already thinking about – thinking about it in advance, making sure that we kind of are in a position that we know who we need to bring in to make it all happen.

Mark Swartzberg – Stifel Nicolaus

Thanks for that. And then, I don’t know if it’s too bare, but one of the things we heard about is how the Olympics is going to improve the trajectory for My Coke. I think kind of what I personally get how that works for Powerade or for vitaminwater. But if you look at these big brands, how do you think the Olympics might affect behavior favorably for these big brands coming out of the Olympics? And then as the company continue to be very focused on the sparkling potential for growth, not as much focus on stills, opportunistic focus on stills, but why not be more aggressive as you look at your future going after stills categories across your markets?

Hubert Patricot

Well, on the Olympics, on Coke, I think what I said about GB is a good element of response, which means we are building three-year plan with our customer. We are engaging in a growth value strategy and My Coke is called to this strategy. And for a brand like Coke Zero having more display, it’s about recruiting more consumer, more users for the long-term. And frankly, Coke has always been caught in our Olympic activation.

The way it’s going to be this year will be even more in next year more intense in two ways. First, we activate not only in GB, we activate in all our far countries starting now. And second in GB, as Simon stated, we’ll have the Torch Relay in 70, I think, cities or 70 days next year. It will be again a good way for us to make the brand part of the daily life of the GB consumer. And I want to highlight one of the channel in which we can make progress with My Coke in GB, which is the licensed trade. And here we have engaged in a strategy, which is to come from fountain business into more packaged goods. And clearly this is My Coke sweet coke strategy, and leveraging the Olympics, leveraging the Torch Relay will be very beneficial for us in this effort.

John Brock

Yeah, let me answer the second part of that question, which is we think we are in a great position from a sparkling standpoint. You’ve seen that over and over today. I mean, we just got a remarkable portfolio and it’s much broader than My Coke. And red, black and silver working, Vance is working, Sprite is working, and energy is working, our three product energy strategy is working. So, we are happy across that entire place.

Sports, I would say again broadly small, underdeveloped, but we think it’s got great potential. Powerade is going to be an Olympic brand and we think that’s going to give it some traction. We have a unique brand in Belgium called Aquarius, but it’s successful, and now we have introduced Powerade Energy, which is kind of in the sports energy category. So, again we feel pretty good there.

In juice drinks, we’ve got Capri Sun, which is a remarkable brand and then you kind of draw a line and say, okay, what else could we do? Now, would we like to have some stronger entries in other categories? Sure, we are working hand-in-hand with the Coca-Cola Company to try to figure out what to do in tea. We are categorically unhappy with where we are in tea and are trying to figure out how do we shift the game, because we’ve got to be more competitive in tea.

In juices and juice drinks, we’ve got Capri Sun, which is a great product. We’ve got Ocean Spray, which is a nice product. We’ve made it very clear with the Coca-Cola Company that we would like to be involved as they think about and we think with them about the role of innocent in the future. We realized there are some time issues here before they will completely have that brand owned, but we’ve been very clear. We think it’s a great brand and we want to be part of it.

Beyond that, it’s challenging, unlike the United States. The juice and juice drink business in Europe is heavily dominated by private label and so that’s not a great place to be and the commodity water business, we have no interest in being in. We’ve been very selective and getting into the water business the Chaudfontaine and with Schweppes Abbey Well. So, that’s kind of a track through the woods. If the right opportunity either through distribution or acquisition, either acquisition on our own or in consort with the Coca-Cola Company came along, and it look like it would create value, we’d be interested. There aren’t that many of those.

Thor Erickson

Thank you. We’ll come up here to Caroline next you start the question, Caroline. And then John here in the front next.

Caroline Levy – CLSA

Caroline Levy, CLSA. I just want to touch on something and I have asked you sort of individually, but I really want to understand the Carrefour weakness, which I think is customer traffic being under pressure and we’ve just seen what’s happened when Wal-Mart has had issues in the U.S. it has definitely impacted its suppliers. Is it really true here that you can manage though any individual customer seeing really disappointing traffic and just pick it up everywhere else? I’d really like you to explore that a little bit so we don’t wake up in a few months and here Carrefour has become a bigger problem than expected? And then within energy, can you just explain why you think Monster has been so successful? And also do you actually manufacture it here or do you buy finished goods?

John Brock

Do you want to do the Carrefour?

Hubert Patricot

And Caroline on your question first, we are growing with Carrefour and we are growing both in France and in Belgium. So, I think we proved that despite the difficulties you are mentioning we have a good value creation story with Carrefour and highlighted the Olympic operation with them. We had a wonderful 125th Anniversary with Carrefour and in fact they are doing well on our categories. So, again, our value creation transfers into Carrefour despite the tough times. In older format hypermarkets, which we know are most afraid that supermarket and they are putting also a lot of pockets now on proximity. And here again, we have a strong habit to build the business there with coolers and sit on the street. So, overall, we are doing okay with Carrefour.

John Brock

And Monster will do this two parts. Monster is a remarkable brand full stop in the story. It is an incredible brand. So, when you ask what drives Monster. It’s the brand power and it is something we are really glad that we have in our stable. I know from speaking with our former U.S. counterparts they are equally excited about the kind of growth they are seeing with Monster inside the Coca-Cola system in North America. We are seeing the same thing here. You can comment a little bit that if you want about the other questions.

Bill Douglas

Yeah. Generally on manufacturing, when we first started the relationship we did not manufacture anything from the launch perspective, then we added capability and I think it’s the brand growth. We will add more capability. I would estimate today we probably self manufacture about 50% of the Monster that we sell and then the other 50% is co-filled, but I would envision us expanding the capability of the brand growth.

Caroline Levy – CLSA

And just to follow-up do you capture incremental margin and then when you bring it in-house for manufacturing?

Bill Douglas

Yes.

John Brock

If we didn’t, we wouldn’t do it.

Caroline Levy – CLSA

You wouldn’t do it.

Bill Douglas

But I mean, it’s obviously, it’s a balanced approach from a partnership perspective, but obviously you are putting more volumes through an existing infrastructure.

Caroline Levy – CLSA

It’s in the U.K., France, is it in…

Bill Douglas

It’s in all of our markets, except for Norway.

Caroline Levy – CLSA

Okay. Thank you very much.

John Faucher – JPMorgan

Thanks. John Faucher with JPMorgan. Bill, just a clarification on your pricing commentary for 2012, the COGS commentary, the sort of lower than 5% number is that on a total basis or on a per case basis?

Bill Douglas

That is per case cost of goods sold inflation.

John Faucher – JPMorgan

Okay. And so in order to maintain margins that would look to put you from what I can tell this to and quick math here, probably somewhere closer to sort of like 3.5%, 4% from a pricing standpoint. Does that sound right and going back to what John said about sometimes the algorithm will be a little bit more awaited towards pricing in a way from volume. It sounds like that’s how we should be looking at 2012, are those fair statements?

Bill Douglas

I think we are not going to give specific pricing guidance yet. What I was hoping to do and trying to do is given all the noise out there, put a floor in a ceiling on the COGS inflation and reiterate our commitment to defending our margins. And I think once we are in December we will give you more specific guidance with your question. Your math is not a logical. I think it’s the best way I can say at this juncture.

John Faucher – JPMorgan

Okay. And then one of the things that’s been interesting and we are seeing this with a couple of other companies in the consumer arena is France has been a better than expected market not just you guys, Tupperware is another example. And Hubert, I think is it the low per caps, is it the relationships with the retailers, it really has been a standout performer for you guys and for Coke, and we understand why you like it, but why is it such a standout relative to some of the other territories around that would seem to have similar dynamics?

Hubert Patricot

Well, the low per cap is one of the explanation. And I think Tristan was explicit on that one. At the same time, I think the market visit tomorrow will be important to answer part of your question, but what I can tell you, what you will see in the market is a very good activation of our brand both in the grocery channel and the away from home channel. And all the efforts we have been putting back investing in the away from home, creating the habit, the recruitment of our brand is paying off also in the grocery. So, we are in the virtuous circle of repeating more consumers.

We have a brand like Coke Zero, which is really exploding in France, and we have had for years, I would say, we are lagging behind in diet drink in France, because probably the diet or light concept was not so obvious as with Coke Zero. Since we introduced Coke Zero, the taste and the concept has traveled very well. So, it has been growing 20%, 30%. It’s part of an explanation.

And then on top of that, we are very centered on our soft sparkling brands in France. And adding Ocean Spray, adding Capri Sun has allowed us to bring some more growth in this market. So, continuing this trend is what make us optimistic for the future. There is still a lot of potential in this market. But the critical factor is what you are going to see tomorrow in the market, we created value, a joint win-win value creation story with the grocers and it has worked out very well for them.

Bill Douglas

And if you think about it from a North American perspective to reiterate what you were saying, when you are in the marketplace tomorrow, it’s just not the quantity of availability, it’s also the quality. The presentation is really, really good here in France.

Lauren Torres – HSBC

Thanks. Lauren Torres, HSBC. You mentioned the importance of the national discounters in front of your markets and also private label brands, just curious over the last year, how your discussions maybe have changed with them a bit making your brands more relevant to them? And then even maybe making more relevant to consumers that have been price sensitive and why would they kind of look at this broader range of brands that you are offering versus what they have been more used to?

Hubert Patricot

We have made a lot of progress with the discounters in Europe overall. We are now present with little in basically all our countries, except Holland. And they have seen also the value to carry national brands and it’s too in France also we have been listed with zero price, which is the discounter banner for casino. And in each case, they have seen value for them to attract traffic and to build value. So, we started generally with one SKU, moving to two, three, four and this is really the recipe for growth. So, we are pretty pleased and it’s a critical growth factor for us now and in the future.

Lauren Torres – HSBC

And can I also ask your neighbor Coke Hellenic in a number of markets, it’s may be driven more by concerns within those specific markets, but just curious as you are neighbors to them in a lot of these developed Western European markets? And you talked about your relationship with Coke getting better, is there a lot of flow between you and them as far how you run these run countries and you read across that fact is just the way to think about developing the total Western European platform?

John Brock

We maintained very solid relationships with all the Coke bottlers around the world. In fact, Hubert and I will be leaving here tomorrow flying to Istanbul for a Coca-Cola top-to-top meeting and Hellenic will be there, FEMSA will be there, Amatil, (indiscernible), and a number of others. So, we were – a group of us were actually in Turkey earlier this year, where we had a chance again to go into the market to talk with the bottler there. So, I would describe our overall approach here as one collegiality and information and best practice exchange done on a rather regular basis. Not just on the European basis, but on a global basis, we really try to do that and I think the Coca-Cola Company frankly does a good job in making sure that that happens both formally and informally.

In terms of Europe specifically, yeah, we compare notes with Hellenic and they’ve got some real challenges. I think some of their markets are suffering more from a macroeconomic standpoint than ours are in and that presents its unique set of challenges. Carlos, you got a question?

Carlos Laboy – Credit Suisse

Yes, thank you. Carlos Laboy, Credit Suisse. Hubert, how important was it to narrow that service gap in France, in the Netherlands in order to accelerate revenue growth in those markets? And now that you have narrowed that gap is it hard to sustain that revenue momentum?

Hubert Patricot

Service gap meaning, sorry?

John Brock

Do you mean the ratings?

Carlos Laboy – Credit Suisse

The ratings.

John Brock

The advantage ratings.

Hubert Patricot

It’s always difficult to stay at the top, I guess, but we made a lot of effort and too different story, but in France, we improved a lot of services in term of supply chain, quality of delivery, quality of orders treatment, punctuality things like that. And it was really about adapting the best practices from GB, for example, the tools the way to go to market.

At the same time, the other way to progress is to establish our category as a winning category in term of profit building for the trade. And here again we have been progressing in past years about the ability for the trade to extract more margin with our brand in general in the market.

In Holland, it was a different story. We had not the capabilities at the account management level, at the brand marketing level as well as supply chain concession is bad for yourself, but the SAP introduction has not been a very big success in Holland. And we had overcome now in the past three to four year there. And we have been rated the best suppliers not only I mean in the beverage industry, we have been rated the best supplier in the Dutch market.

So, now it’s time to keep it up, and again leveraging the asset, the Olympic is critical for us. It’s not easy to stay at the top, because if you engage with the other supplier, they would probably always have to what we do and we know that and look at what we do, the way we do it. And we are constantly with our customers to look at the next plateau, what can be done better. And this is really the attitude in our own country, but number two in France is not good enough for sure.

Carlos Laboy – Credit Suisse

And if I could follow up, you’ve spoken before on how the Olympics in France, I mean the World Cup in France, for example, helped you reset the dialogue with the trade more around value. Could you speak to whether the Olympics in London can help reset some of the discourse with the trade around value? And second of all, when you think about channel mix shifts in the U.K. and immediate consumption opportunities of fallout of the Olympics, do you think that it can – the Olympics can help you change the channel mix more toward immediate consumption channels permanently?

Hubert Patricot

I’ll start. If I start one step before the Olympics, everything starts with – for us with the customer on the category vision, because it’s one thing to say our category is expandable, is another thing to say to engage with the customer with clear list of opportunity. And you mentioned that GB trade, we and Simon’s team have dimensionalized what the IC opportunity in the big supermarket – in the forecourt of the big supermarket could be, if we had a better range, a better clear location, the better category. That is the way we approach. That’s why we say clearly to them, the Olympic is not the destination, it’s part of a journey and the three-year plan that Simon has dealt with his team are ‘11, ‘12, and ‘13, because we are going to build into the Olympics but in the future and capturing this potential.

And frankly, the response has been extraordinary, improves above our expectations, because in today’s environment, John you made the point, you have not so many categories that can expand, you have not so many categories that capture the consumer arbitrage, that’s why it has been quite successful.

Thor Erickson

Any more questions?

John Brock

That’s what I was going to say. So, we got one here, okay.

Andrew Holland – Société Générale

Yeah, it’s Andrew Holland from Société Générale. And obviously, the French tax thing on soft drinks came – it appears sort of come from nowhere, I am just wondering how long ahead of the event you were aware that this was, sort of coming your way and whether there are any other markets that you operate in where you can see similar political machinations that might also end up with unfavorable taxes?

John Brock

Yeah, tax rates are prevalent everywhere. We have been dealing with them in the United States for the past several years, done so pretty successfully. We knew the one here in France might come. We were hopeful that it wouldn’t. Frankly, we didn’t think that the government proposal would have it in there, but it did and that’s the way it goes. There is still a lot of water to go into the bridge between now and the time some things put in place, but we remain vigilant everywhere. It is a big issue, everywhere you have basically cities, counties, and states and countries that are looking for money. It’s really about that simple. And this we believe is a very inappropriate, regressive, and unfair way to go about getting it. So, you can assume we are going to be ready to fight it anywhere, in any place.

Bill Douglas

But just to be clear Andrew, this particular issue in France has been discussed the last two, if not three years, in the budget proposal. It just never quite got to this level in the conversation that got cutoff priority to this point in the discussion.

John Brock

And there are other places around the world where that’s happening too. So, it’s...

Andrew Holland – Société Générale

And your regions, the other places in the world?

John Brock

Sure. When particularly this one continues we are going to see other places who want to do the same thing. I mean, it’s bubbling in the United States again all the time. So, it’s not new and it’s not going to go away, but we as an industry will continue to be very diligent in dealing with it.

Steve Powers – Bernstein

Steve Powers from Bernstein. John, you mentioned historical, I think you said ebbs and flows in relationship between yourself and the Coca-Cola Company. Assuming relationships are flowing today, how do you handicap the risks of future ebbs? And what other things you are most concerned about and how should we kind of handicap those things?

John Brock

Well, there is nothing that particularly concerns me. Frankly, I think the deal we did this transaction was absolutely, in many ways the most paradigm shifting transaction in the history of the Coca-Cola system. I think it took some pretty remarkable thinking to get this deal done, and not only did we get the deal constructed, but then we actually went through the whole closing process, we closed it on time. And I think in the cool light of the morning, it’s fair to say has been a win-win. It’s been great for the Coca-Cola Company. It’s been great for CCE. And we are ready to move forward. I can’t sit here and say that I can see anything out there that would likely be a problem that we had envisioned worrying about. We are worrying about the things we can do together, not what might rip us apart.

Steve Powers – Bernstein

Okay. So, things like the Germany acquisition negotiations there, I think you mentioned, I forgot the exact words, but some discontent in the surrounding portfolio like tea. Right now, those are – you wouldn’t categorize those as the material risk to a relationship breakdown?

John Brock

No, because I think you need to put in context what makes the franchise system so great. And some of you have heard me say this before, I think the remarkableness of this system is when it works right, it’s about 80% of the time our relations are absolutely phenomenal and about 20% of the discussions and issues are they have some degree of confrontation associated with them. And that’s not a bad thing.

We challenge each other. They challenge us on just how effective our promotions in Carrefour, and we challenge them on just how effective is that portfolio in tea. That’s part of the deal, that’s the way it goes. And as long as we are challenging ourselves productively in areas, where if we improve it’s through our mutual benefit, that’s a god thing. When it gets out of sync is when that 80:20 goes the other direction, that doesn’t happen very often, but when it does, then it’s a serious problem.

Steve Powers – Bernstein

Great, thanks.

John Brock – Chairman and Chief Executive Officer

Okay, let me just say thanks again to everybody. I think it's been a terrific day certainly from our standpoint. We have enjoyed having the chance to tell you about our business. We will meet, and Thor you can tell me if I get this right or wrong, but I think the idea is in the lobby at 6:15. We are going to walk to dinner unless it’s raining, in which case, we get on the bus, why don’t I turn it over to you.

Thor Erickson – Vice President, Investor Relations

Just a few minutes, for those on the webcast, I would like to say thank you for joining us. That will officially end our webcast at this point in time. And we do it forward to following up with you on our second, excuse me, our third quarter call in October. So, I think that will officially conclude the webcast. Thank you.

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