Britvic — FY2015 Earnings Presentation
38 slides from Britvic's earnings presentation, Nov 25, 2015
Slide 1: Britvic plc Prelims presentation 2015
Britvic plc Prelims presentation 2015
Slide 2: Gerald Corbett, Chairman
Gerald-Corbett Chairman Making life's everyday moments more enjoyable
Slide 3: John Gibney, Chief Financial Officer
John Gibney Chief Financial Officer
Slide 4: Another year of strong earnings growth despite an increasingly challenging environment
Another year of strong earnings growth despite an increasingly challenging environment -0.6% +7.1% +100bps +12.0% 0.2x +10.0% Group Group Group EBITA Underlying Reduction in Full year Revenue EBITA margin adjusted * underlying* DPS EPS of net debt to EBITDA £1,300.1m £171.6m 13.2% 46.7p £351.7m 23.0
Slide 5: Trading conditions were increasingly challenging throughout 2015
Trading conditions were increasingly challenging throughout 2015 Food & Beverage not benefiting from increased consumer spending Visa UK expenditure – Sep 2015 Growth YOY Retail environment in GB & Ireland has been 9.0% 8% 8.0% 7.0% 6% 7% increasingly challenging 6.0% 5.0% 4% Large-format groc
Slide 6: Soft drinks category was subdued in all of our core markets
Soft drinks category was subdued in all of our core markets GB & Ireland soft drinks market was deflationary in 2015 GB full year volume +1.1%, value -0.5% Take-home market volume Q4 2015 Ireland full year volume +1.4%, value -0.4% 4.0% 3.6% Lower value plain water category remained in 2.0%
Slide 7: GB Stills
GB Stills 2015 2014 % £m £m change Volume 377.5 378.9 (0.4) ARP per litre 85.2p 88.5p (3.7) Revenue 321.6 335.2 (4.1) Brand contribution 151.1 159.4 (5.2) Brand margin % 47.0% 47.6% (60)bps Improving H2 performance, Significant innovations adversely impacted launched in H2 by the weather 7
Slide 8: GB Carbonates
GB Carbonates 2015 2014 % £m £m change Volume 1,206.7 1,204.7 0.2 ARP per litre 46.9p 47.1p (0.4) Revenue 565.7 567.8 (0.4) Brand contribution 225.1 222.4 1.2 Brand margin % 39.8% 39.2% 60bps Pepsi continued to gain Over 60% of Pepsi volume is share and drive category no sugar, and growing growth So
Slide 9: France
France 2015 2014 % % constant £m £m change currency Volume 288.9 273.6 5.6 5.6 ARP per litre 83.2p 93.2p (10.7) (1.3) Revenue 240.3 254.9 (5.7) 4.2 Brand contribution 75.6 67.1 12.7 24.3 Brand margin % 31.5% 26.3% 520bps 510bps Teisseire #3 soft drink & Fruit Growth in syrups and kids Shoot #1 in ki
Slide 10: Ireland
Ireland 2015 2014 % % constant £m £m change currency Volume 202.2 197.0 2.6 2.6 ARP per litre 49.7p 54.1p (8.1) (1.0) Revenue 120.4 128.3 (6.2) 1.3 Brand contribution 44.2 47.0 (6.0) 2.8 Brand margin % 36.7% 36.6% 10bps 50bps Returned to revenue and Outperformed the market with profit growth, despit
Slide 11: International
International 2015 2014 % % constant £m £m change currency Volume 41.3 44.3 (6.8) (6.8) ARP per litre 126.2p 131.4p (4.0) (0.0) Revenue 52.1 58.2 (10.5) (6.8) Brand contribution 16.9 21.0 (19.5) (16.7) Brand margin % 32.4% 36.1% (370)bps (390)bps Underlying revenue growth Sales of Fruit Shoot to con
Slide 12: A&P and Overheads
A&P and Overheads 2015 2014 AER % £m £m change 2013 cost saving programme largely delivered Total A&P spend 71.1 72.0 1.3 A&P % revenue 5.6% 5.4% (20)bps Continued disciplined Non-brand A&P 9.7 9.9 2.0 cost management Fixed supply chain 92.6 101.8 9.0 Selling costs 118.6 120.7 1.7 Significant invest
Slide 13: Exceptional costs and other items
Exceptional costs and other items Item 2015 £m Brazil acquisition related costs (6.5) Strategic restructuring costs (3.6) Business capability programme-related costs (1.4) Fair value movements 0.9 Gains on disposal of property 1.2 Total exceptional costs (9.4) Cash impact £8.6m 13
Slide 14: EBIT to Earnings
EBIT to Earnings 2015 2014 % % Interest cost £m £m change constant reduced following currency successful EBIT 169.0 158.1 6.9 7.2 bank refinancing Interest (22.0) (25.2) 12.7 12.4 Profit before tax 147.0 132.9 10.6 10.9 Strong leverage Tax (34.5) (33.0) (4.5) (5.5) through the P&L to earnings Effect
Slide 15: Cash flow and Net debt
Cash flow and Net debt 2015 £m 2014 £m EBIT 169.0 158.1 Brazil acquisition completed Depreciation and amortisation 42.1 43.0 post year-end. Underlying* EBITDA 211.1 201.1 net debt to EBITDA of 1.7x Working capital 10.3 (1.6) Capital spend (60.9) (57.3) Pension contributions (21.6) (20.8) Other spend
Slide 16: Ebba acquisition completed 30 September
Ebba acquisition completed 30 September First equity consideration of R$193.8m paid 30 September R$ denominated net debt of c.R$160m repaid post completion Second equity consideration of R$193.8m due September 2017 with 75% now hedged 2016 & 2017 EBITDA at broadly similar levels to 2015, as
Slide 17: 2016 guidance
2016 guidance Anticipate continued challenging market conditions in our core markets Benign raw material environment anticipated Effective tax rate of 23% to 24%, coupon interest rate of 5.0% to 5.5% Capital spend of £120m to £130m, including 2015 re-phasing of £20m Exceptional costs of c
Slide 18: We have delivered our commitments since 2013
We have delivered our commitments since 2013 building on our strong track record of creating shareholder value since IPO 10 Years since IPO 2012 to 2015 EPS DPS TSR EPS DPS TSR CAGR CAGR 328% CAGR CAGR 106% 10.9% 9.7% 19.7% 9.4% UNDERPINNED BY: Disciplined cost control A strong balance sheet Sustain
Slide 19: Capital allocation priorities
Capital allocation priorities Profitable growth Strong underlying FCF conversion Invest in Maintain on-going A progressive Selective M&A in business debt leverage within dividend policy core categories 1.5x to 2.5X range capability Delivering superior shareholder returns 19
Slide 20: Simon Litherland, Chief Executive Officer
Simon Litherland Chief Executive Officer
Slide 21: Our journey to become a global branded soft drinks business
Our journey to become a global branded soft drinks business Progress against our 2013 strategic commitments The drivers of future growth Summary 21
Slide 22: In 2013 we communicated a strategy to deliver long-term growth
In 2013 we communicated a strategy to deliver long-term growth Generate profitable Exploit global Continue to Build trust and growth in our opportunities in step-change our respect in our core markets kids, family and business capability communities adult categories 22
Slide 23: We have made great progress executing this strategy
We have made great progress executing this strategy Generate profitable Exploit global opportunities in Continue to Build trust and growth in our kids, family and step-change our respect in our core markets adult categories business capability communities Share gains in all Fruit Shoot #2 US C
Slide 24: We have recruited international experience to the executive team
We have recruited international experience to the executive team Mathew Dunn – New CFO, joined September 2015 Joined from SAB Miller where he was CFO of South Africa division Strong BU and PLC leadership experience across multiple geographies Hessel De Jong – International MD, joined October 201
Slide 25: A clear strategy to create superior shareholder returns
A clear strategy to create superior shareholder returns Generating profitable Exploit global opportunities Continue to Build trust and growth in our in kids, family and step-change our respect in our core markets adult categories business capability communities Exploit channel Deliver the Best
Slide 26: Generate profitable growth in our core markets - innovation
Generate profitable growth in our core markets - innovation
Slide 27: Innovating to capitalise on changing consumer needs
Innovating to capitalise on changing consumer needs Improve participation Expand category “Well-being” leadership 27
Slide 28: We continue to evolve the Fruit Shoot offering
We continue to evolve the Fruit Shoot offering Core range reformulated with added multivitamins No.2 most motivating claim amongst parents Reduced sweetness and improved flavour Fruit Shoot Hydro re-launched to capitalise on growth of flavoured water New liquid and reduced sweetness Furthe
Slide 29: Exploiting global opportunities in kids, family & adult categories - USA & Brazil
Exploiting global opportunities in kids, family & adult categories – USA & Brazil
Slide 30: Fruit Shoot is driving single-serve kids beverage growth in the USA
Fruit Shoot is driving single-serve kids beverage growth in the USA Good progress to-date: #2 kids juice brand in convenience and gas channel Driving category growth, brand retail sales value +23% Market share now at 17% Significant opportunities remain: Scale distribution opportunities in C
Slide 31: USA multi-pack route to market established
USA multi-pack route to market established Broker warehousing model more efficient & cost effective RTM than direct store delivery for grocery channel Advantage Sales & Marketing appointed who will: Facilitate the relationship with key retailers Provide category management & insight support
Slide 32: Acquisition of Ebba will create significant value for shareholders
Acquisition of Ebba will create significant value for shareholders Ambition to at least double EBITDA by 2020, despite tough market macros Acquiring the leading brands, in a category core to our strategy +50% market share of liquid dilutes Maguary has 90% brand awareness and resonates with B
Slide 33: Continue to step-change our business capability - best in class supply chain
Continue to step-change our business capability – best in class supply chain
Slide 34: A GB supply chain programme
A GB supply chain programme that will provide: Additional capacity in growth packs Pack flexibility to maximise channel opportunities Lower on-going production costs A more efficient logistics and warehousing network Lower maintenance capital spend requirements on-going Significant envir
Slide 35: Increased period of capital spend
Increased period of capital spend 2016 total capital guidance of £120m to £130m Including £20m deferred from 2015 Group historical run rate capex c £50m to £55m Strong focus on cash returns from enhanced investment in capital base, minimum annual cash return of 15% £6m EBITDA (£1m EBIT) in
Slide 36: Build trust and respect in our communities
Build trust and respect in our communities
Slide 37: A leading role in addressing the public health agenda
A leading role in addressing the public health agenda Evolving our portfolio Encouraging active lifestyles Responsible marketing Best positioned portfolio Inspired 2.6 million people No advertising to children Market leading low/no to get active in 2015 under 12 sugar propositions Fruit Sh
Slide 38: Summary
Summary Continued delivery of the strategy Another year of double-digit earnings growth in challenging market conditions Future growth drivers are clear Maintain focus on building business efficiency 38