Britvic — FY2022 Earnings Presentation
31 slides from Britvic's earnings presentation, Nov 23, 2022
Slide 1: Prelims presentation
Prelims presentation 23 November 2022
Slide 2: Agenda
Agenda Simon Litherland STRATEGIC & OPERATIONAL REVIEW Chief Executive Officer A stronger, better Britvic Joanne Wilson FINANCIAL REVIEW Chief Financial Officer An excellent year across all key metrics Simon Litherland LOOKING AHEAD Chief Executive Officer A winning growth strategy 2 Prelims 2022 pr
Slide 3: A stronger, better Britvic
A stronger, better Britvic FY22 Highlights • Excellent year, continued strategic progress despite significant headwinds • Our strategy has momentum, delivering accelerated top-line growth • A strong portfolio of trusted brands able to take price and grow value • Continued to improve our operational
Slide 4: An excellent year across all key metrics
An excellent year across all key metrics 1.9x +15.5% +10bps +29.3% Debt leverage Revenue 1 Margin 2 EPS 3 down £106m 4 34% 77 24 Calories Cash returned to x reduction in Engagement per serve shareholders Carbon 5 1. Adjusted for currency and Counterpoint agency 2.Adjusted EBIT margin 3.Adjusted EPS
Slide 5: Delivering accelerated top-line growth
Delivering accelerated top-line growth GB carbs revenue Global premium Global flavour +14.6% brands revenue concentrates revenue1 +76.7% +5.4% Leadership in low/no sugar carbs: Mathieu Teisseire and Category leadership with great Pepsi MAX, 7UP free, Tango London Essence in strong growth tasting, he
Slide 6: Winning portfolio helping us navigate inflationary headwinds
Winning portfolio helping us navigate inflationary headwinds Balanced growth across price and volume 11.4% GB Brazil Other Intl • Trusted brands have demonstrated the strength to take and hold price 9.8% 9.1% • Volume elasticity as expected, balanced growth across volume and price/mix • Focused pric
Slide 7: Outstanding Customer and Consumer Engagement
Outstanding Customer and Consumer Engagement Enhanced Customer Partnerships Engaging Consumer Experience Targeted Innovation • Strongest ever results in Advantage • A&P +6.4%, focused on core brands and • New flavours driving growth on survey highest-return programmes London Essence, Pepsi and Tango
Slide 8: Resilient and Agile Supply Chain
Resilient and Agile Supply Chain Continuing to Build Resilience Investing in Capacity and Capability • Digitised manufacturing to increase efficiency, lower • New can line and National Distribution Centre upgrade cost and add capacity in GB • Mitigating CO2 risk through diversified supply, • Two add
Slide 9: Investing in ESG to deliver sustainable growth
Investing in ESG to deliver sustainable growth Healthier People • Maintained industry-leading low average calories per serve at just 24 • Added health benefits such as vitamins and minerals • Partnered with The Prince’s Trust to improve young adult opportunity and wellbeing • Promoting employee well
Slide 10: Financial Review
Financial Review An excellent year across all key metrics Joanne Wilson CFO
Slide 11: Positive trajectory across all financial metrics
Positive trajectory across all financial metrics Reported Versus FY21 Volume 2,518.1m +6.0% Net Revenue 1,618.3m +15.5% Adjusted EBIT 206.0m +16.0% Adjusted EBIT Margin 12.7% +10bps Adjusted EPS 57.3p +29.3% DPS 29.0p +19.8% FCF £128.8m (£3.9m) Adjusted Net Debt £475m £14m lower ROIC 16.4% +140bps R
Slide 12: Business Unit highlights
Business Unit highlights Volume +5.5% Volume +3.8% Volume +9.8% ARP +9.1% ARP +11.4% ARP +6.1% Revenue +15.1% Revenue +15.7% Revenue +16.5% Brand +11.8% Brand (0.9)% Brand +3..0% Contribution Contribution Contribution Brand (110)bps Brand (260)bps Brand (370)bps Margin Margin Margin • Retail channel
Slide 13: Disciplined approach to managing cost inflation
Disciplined approach to managing cost inflation Cost Outlook Britvic Actions • Higher year on year raw material costs reflecting hedging • Physical and financial hedges through fixed price contracts cover secured at higher prices vs FY22 and derivatives • Impacts from elevated energy costs seen acro
Slide 14: Underpinned by strong fundamentals
Underpinned by strong fundamentals Free Cash Flow ROIC Leverage Adjusted Net Debt Relentless focus on cash BCP investment enabling Leverage peaked during the Long-term USPP debt profile. management has delivered platform to drive increasing pandemic as EBITDA declined. Strong cash management annual
Slide 15: Disciplined capital allocation policy
Disciplined capital allocation policy CAPEX M&A Investment in organic growth & Value-adding M&A innovation STRONG UNDERLYING FCF DIVIDENDS CONVERSION DEBT Progressive dividend policy – 50% payout Maintain long-term debt leverage within ratio 1.5x to 2.5x range RETURN EXCESS CASH TO SHAREHOLDERS 15 P
Slide 16: 2023 trading environment and modelling considerations
2023 trading environment and modelling considerations • Anticipate price/mix led revenue growth though RGM price realisation • COGS inflation expected to be low double-digit • Will continue to invest in future growth drivers - brands, supply chain, sustainability and technology • Continued focus on
Slide 17: Looking Ahead
Looking Ahead A winning growth strategy Simon Litherland CEO
Slide 18: Strong track record of underlying growth & superior shareholder returns
Strong track record of underlying growth & superior shareholder returns Strong Underlying Growth Total shareholder return: • 5-year volume CAGR +2.2% Consistently out-performing the FTSE250 • 5-year revenue CAGR +5.1% 170.0% • Average FCF conversion over 90% last 5 years 10 year 76.4% • 5-year FCF o
Slide 19: The soft drinks category is resilient and offers significant headroom for growth
The soft drinks category is resilient and offers significant headroom for growth Total £ Sales – indexed to 2010* A resilient growth category 150.0 140.0 130.0 • Soft drinks growth continues to outperform 120.0 wider consumer goods 110.0 • Consistent growth in per capita consumption 100.0 90.0 • Val
Slide 20: Britvic's strategy will continue to deliver sustainable, long-term growth
Britvic’s strategy will continue to deliver sustainable, long-term growth STRATEGIC PRIORITIES BUILD LOCAL FLAVOUR HEALTHIER ACCESS FAVOURITES & BILLIONS PEOPLE, NEW GLOBAL PREMIUM OF WATER HEALTHIER GROWTH BRANDS OCCASIONS PLANET SPACES MARKET FOCUS GLOBALISE PREMIUM BRANDS LEAD MARKET ACCELERATE A
Slide 21: Lead Market Growth in GB
Clear growth drivers in each focus market Lead Market Growth in GB • Maintaining our carbonates momentum, through our leadership in great tasting low/no sugar • Flavouring billions of water occasions, Robinsons leading the migration towards concentrated soft drinks • Leveraging our dispense expertis
Slide 22: Accelerate and Expand in Brazil
Clear growth drivers in each focus market Accelerate and Expand in Brazil Category expansion Regional expansion • Rejuvenating concentrates for the Brazilian consumer • Consolidating strength in Sao Paulo, Rio, MG & NE • Building our global premium portfolio • Accelerating share in under-indexed reg
Slide 23: Globalise Premium Brands and Improve Profitability in Western Europe
Clear growth drivers in each focus market Globalise Premium Brands and Improve Profitability in Western Europe Global Premium Western Europe • Further acceleration of London Essence and Mathieu Teisseire • Building profitable local brands and accessing new, around the world higher margin growth spac
Slide 24: Clear strategic priorities in FY23
Clear strategic priorities in FY23 Compelling brand activation A major brand development Leverage brand partnerships, New flavour innovation eg. Pepsi Christmas activation planned for Robinsons, eg. Ballygowan Irish Rugby across core brands ‘Make the MAX OF IT’ watch this space… sponsorship to drive
Slide 25: In Summary – A stronger, better Britvic
In Summary – A stronger, better Britvic • Excellent year, continued strategic progress despite significant headwinds • Positive trajectory across all key metrics, continuing long term track record of growth and superior shareholder returns • Weathering inflation through brand strength, revenue manag
Slide 26: Thank you
«AKE THE TAS
Slide 27: Appendix
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Slide 28: Britvic delivers long-term, sustainable growth
Looking Ahead | Britvic delivers long-term, sustainable growth OPERATING IN A RESILIENT, A PORTFOLIO OF A WELL-INVESTED LONG-TERM PEPSICO GROWING CATEGORY LEADING BRANDS INFRASTRUCTURE PARTNERSHIP COMMITTED, AGILE HEALTHIER PEOPLE, A PROVEN TRACK WELL-FINANCED AND AND ENGAGED TEAM HEALTHIER PLANET R
Slide 29: Financial Review - Cost Base
Financial Review - Cost Base REPORTED VAR TO 2021 Total A&P spend 61.7 6.4% A&P as a % of revenue 3.8% (30)bps Non-brand A&P 10.3 (24.1%) Fixed supply chain 126.0 (3.2%) Selling costs 82.0 (9.2%) Overheads and other costs 131.4 (3.9%) Total fixed cost base 349.7 (5.3%) 29 Prelims 2022 presentation
Slide 30: Financial Review – Technical Guidance
Financial Review – Technical Guidance • Effective tax rate 22.5% to 23.5% in FY23 • Expected net interest cost of £22.5m to £23.5m • Continued £5m pension contribution • Capital spend £85m to £95m • Adjusting items £12m to £14m, of which £8m recurring non- cash acquisition-related amortisation 30 Pr
Slide 31: Financial Review – Adjusting Items
Financial Review – Adjusting Items £m Implementation of SaaS accounting guidance 7.5 Strategic restructuring costs (1.0) Strategic M&A activity (1.0) Other (0.3) Total excluding acquisition-related amortisation 5.2 Acquisition-related amortisation 8.4 Total adjusting items pre-tax 13.6 31 Prelims 20