Britvic — FY2014 Earnings Presentation
43 slides from Britvic's earnings presentation, Nov 26, 2014
Slide 1: Britvic plc Prelims presentation 2014
Britvic plc Prelims presentation 2014
Slide 2: Gerald Corbett
q i Gerald Corbett \ : *\, a | ii = li zg Making life's gveryday moments more enjoyable BRITVIC |
Slide 3: John Gibney, Chief Financial Officer
John Gibney Chief Financial Officer
Slide 4: Group performance
Group performance +2.4% +17.3% +150bps +18.8% 0.3x +13.6% Group revenue Group Group EBITA Adjusted Improved Net Full year EBITA margin EPS of Debt/EBITDA DPS of £1,344.4m £161.0m 12.0% 41.8p 1.9x 20.9p Strong progress on all key metrics EBITA is defined as operating profit before exceptional and oth
Slide 5: Soft drinks markets have remained challenging
Soft drinks markets have remained challenging • GB GB Take-home soft drinks market • Volume down 0.5% with Q4 down 4.4% 5.0% Q3 YTD Q4 FY 2.3% • Value up 1.1%, led by carbonates up 1.4% 1.1% 0.2% • Stills category excluding plain water value down 0.0% 1.2%, volume down 4% -0.5% • France • Volume up
Slide 6: GB Stills
GB Stills 2014 £m 2013 £m % change Volume 378.9 398.7 (5.0) ARP per litre 88.5p 85.3p 3.8 Revenue 335.2 340.1 (1.4) Brand contribution 159.4 154.5 3.2 Brand margin % 47.6% 45.4% 220bps Take-home stills value, SQUASH’D attracting new excluding water, down 1.2% consumers into category 6
Slide 7: GB Carbonates
GB Carbonates 2014 £m 2013 £m % change Volume 1,204.7 1,153.9 4.4 ARP per litre 47.1p 46.5p 1.3 Revenue 567.8 536.4 5.9 Brand contribution 222.4 200.1 11.1 Brand margin % 39.2% 37.3% 190bps Growth in both ARP and Market share gains, led by volume, through disciplined Pepsi revenue management 7 7
Slide 8: France
France 2014 £m 2013 £m % change % change constant currency Volume 273.6 272.1 0.6 0.6 ARP per litre 93.2p 94.9p (1.8) 0.6 Revenue 254.9 258.2 (1.3) 1.2 Brand contribution 67.1 63.2 6.2 8.9 Brand margin % 26.3% 24.5% 180bps 180bps Poor weather impacted Q4, Fruit Shoot No 1 in especially the syrups ca
Slide 9: Ireland
Ireland 2014 £m 2013 £m % change % change constant currency Volume 197.0 199.0 (1.0) (1.0) ARP per litre 54.1p 56.8p (4.8) (2.9) Revenue 128.3 136.9 (6.3) (4.5) Brand contribution 47.0 49.0 (4.1) (1.7) Brand margin % 36.6% 35.8% 80bps 100bps Fixed costs savings have Aggressive competitive returned I
Slide 10: International
International 2014 £m 2013 £m % change % change constant currency Volume 44.3 43.2 2.5 2.5 ARP per litre 131.4p 116.4p 12.9 14.0 Revenue 58.2 50.3 15.7 16.9 Brand contribution 21.0 18.8 11.7 12.3 Brand margin % 36.1% 37.4% (130)bps (150)bps Driving underlying Fruit Shoot launched into profitability
Slide 11: A&P and Overheads
A&P and Overheads 2014 £m 2013 £m % change Majority of strategic Total A&P spend 72.0 70.3 (2.4) cost initiatives realised in cost base A&P % revenue 5.4% 5.4% - 2014 £m 2013 £m % change Overheads includes increase in Non-brand A&P 9.9 7.3 (35.6) trade marketing spend Fixed supply chain 101.8 100.7
Slide 12: EBIT to Earnings
EBIT to Earnings 2014 £m 2013 £m % change % change constant currency EBIT 158.1 135.0 17.1 17.6 Interest (25.2) (26.9) 6.3 6.0 Profit before tax 132.9 108.1 22.9% 23.5 Tax (33.0) (25.5) (29.4) (32.0) Effective tax rate 24.8% 23.6% (120)bps (160)Bps Profit after tax 99.9 82.6 20.9% 20.9 12
Slide 13: Exceptional costs and other items
Exceptional costs and other items Item 2014 £M Strategic restructuring costs (14.1) Other fair value movements 2.3 Write-off of unamortised financing fees (1.0) Total exceptional and other items before tax (12.8) Cash impact £18.9m 13
Slide 14: Cash flow and net debt
Cash flow and net debt 2014 £m 2013 £m EBIT 158.1 135.0 Depreciation and amortisation 43.0 47.5 EBITDA 201.1 182.5 £21.4m reduction in Working capital (1.6) (6.2) adjusted net debt Capital spend (57.3) (34.9) Pension contributions (20.8) (14.0) Other spend (32.5) (23.9) Increase of capital spend Und
Slide 15: GB Pension scheme funding finalised
GB Pension scheme funding finalised • 2010 funding agreement structure remains in place • Pension Funding Partnership remains in place with a £105m asset-backed plan if funding level not reached by 2026 • No increase in cash contributions commitment • Cash payments remain stable at £15m pa 2014 to 2
Slide 16: Robust long term capital structure
Robust long term capital structure • Adjusted net debt of £380.9m Facility profile (£m) • £400m revolving credit facility successfully refinanced in November 2014 • Matures November 2019 • Mechanism to request extensions for up to 2- years • Mechanism to request increased facility size to £600m • Re
Slide 17: 2015 guidance
2015 guidance • Increasingly challenging market conditions • Favourable raw material cost environment, offset by expected rise in other costs • Effective tax rate of 23.5% to 24.0%, coupon interest rate of 5.0% to 5.5% • Capital spend in the range of £80m to £90m • Minimum underlying free cash flow
Slide 18: Summary
Summary Strong financial performance in a year of significant change Delivered ahead of guidance on all key financial metrics Strong balance sheet and funding platform Further investment behind key drivers of future growth 18
Slide 19: Simon Litherland, Chief Executive Officer
Simon Litherland Chief Executive Officer
Slide 20: Agenda
Agenda • Review of 2014 • Progress against our strategy • Update on our international markets • Winning in GB, Ireland and France 20
Slide 21: 2014 – a significant year for Britvic
2014 – a significant year for Britvic • A strong financial performance in a challenging environment • Strategic cost initiatives delivered ahead of schedule • Internal change programme with new operating model and ways of working • Fully resourced international business unit • Strategic marketing fu
Slide 22: Progress against our strategy
Progress against our strategy
Slide 23: We have a clear purpose and aspirational vision
We have a clear purpose and aspirational vision Making life’s everyday moments more enjoyable The most dynamic, creative and admired soft drinks company in the world Being the most An inspiring place Delivering consistently Building iconic brands Trusted and respected valued by our to be for our sup
Slide 24: Our strategic focus areas are clear
Our strategic focus areas are clear Leverage our Exploit global Embed a Build trust and portfolio in GB & opportunities in kids, winning culture respect in our Ireland family and adult communities categories Improve operating Innovate to meet margin changing consumer needs 24
Slide 25: Update on our international markets
Update on our international markets
Slide 26: Fruit Shoot momentum builds in Europe
Fruit Shoot momentum builds in Europe • Teisseire Fruit Shoot driving category growth in France • Launched in 2011, now the number 1 kids juice drink brand1 • Over 60% volume and value growth in 20141 • Good progress in Spain • New leisure outlet wins • Continued double-digit market volume and value
Slide 27: Fruit Shoot India launch on track
Fruit Shoot India launch on track July Four flavours launched in three key cities 2014 (Bangalore, New Delhi and Mumbai) August Available in 10 cities and 11,000 outlets 2014 Focused visibility drive in 1,500 key stores September Distribution in 20,000 outlets, with major retail 2014 listings Market
Slide 28: Another year of major milestones for Fruit Shoot in USA
Another year of major milestones for Fruit Shoot in USA 2012 2013 2014 Distribution agreement with 15 year agreement with Pepsi National distribution for Pepsi Bottling Ventures Americas Beverages single-serve: 50 states In market manufacture starts Multiple independent bottler Multiple independent
Slide 29: Growing single-serve category and optimising multi-pack solution
Growing single-serve category and optimising our multi-pack solution USA Fruit Shoot Volume Index 5X in 2 years 6 • Already #3 brand in single-serve category 4 • Fruit Shoot value sales nearly doubled in the last year 2 • Category in decline without Fruit Shoot 0 • All regions growing double-digit a
Slide 30: Winning in GB, Ireland and France
Winning in GB, Ireland and France
Slide 31: Increasingly challenging GB & Ireland retail and shopper environment
Increasingly challenging GB & Ireland retail and shopper environment Macro Retail Shopper Economic recovery not Polarisation in the market Shoppers economising not feeding through to food & compromising Convenience & Impulse beverage spend out-performing grocery Shopping little and often to Demand f
Slide 32: We are well positioned for success
We are well positioned for success • A broad market leading portfolio that meets changing consumer needs • Strong route to market and sales capability • Disciplined revenue management and cost control • Flexible price and pack architecture to support multi-channel growth, investment in new high-spee
Slide 33: Market leading and fast growing brands
Market leading and fast growing brands Kids Family Adult Full portfolio offering in GB & Ireland 33
Slide 34: A balanced portfolio to meet changing needs
A balanced portfolio to meet changing needs • Many low calorie options Glass of • Sales heavily biased towards low calorie options Robinsons for core brands including Robinsons, Fruit Shoot, NAS c 5 Pepsi Max calories • Strong track record of reformulation and low Can of Pepsi calorie innovation, co
Slide 35: A clear approach to win with consumers
A clear approach to win with consumers QUALITY EXCITING AND INNOVATIVE COMPELLING PRODUCTS INSPIRATIONAL SOLUTIONS TO SHOPPER ‘WORTH PAYING EXPERIENCES MEET THEIR ENGAGEMENT IN MORE FOR’ NEEDS ALL CHANNELS 35
Slide 36: A winning partnership with Pepsi
A winning partnership with Pepsi Pepsi 7UP Energy Stills Investing in growth Brand and pack categories solutions to meet New cherry flavour Max consumer needs in the New packaging Global re-launch Music experiences energy category New flavours Major media campaign Digital campaigns Lower calorie Lip
Slide 37: A strong innovation plan
A strong innovation plan Kids Family Adult 37
Slide 38: J20 – innovation that created a new category
J20 – innovation that created a new category • Launched 1998, for the out of home adult social occasion • Now the biggest packaged soft drink, with retail sales in excess of £240m* • Broad consumer appeal • New limited editions planned for 2015 and onwards • A further opportunity to extend its appea
Slide 39: Introducing new J20 Spritz
Introducing new J20 “Spritz” • An exciting new range of adult soft drinks from J20 • Capitalises on the socialising occasion • Premium product with a strong adult appeal • Great taste and stylish packs • Slightly sparkling specifically blended for adult palettes • Low in both calories (<55) and suga
Slide 40: Leveraging squash leadership to grow the dilutes category
Leveraging squash leadership to grow the dilutes category • Core capability for Britvic • Number 1 brands in our markets • Strong heritage • Category expertise • Outstanding technical capability • Strong track record of innovation 40
Slide 41: An opportunity to drive dilutes beyond mixing with water
An opportunity to drive dilutes beyond “mixing with water” WITH SOFT DRINKS WITH ALCOHOL WITH HOT DRINKS WITH WATER MIXING UP FLAVOURS ENHANCING BEER, ENHANCING COFFEE IN THE COFFEE SHOP REDEFINE ADULT IN LEISURE CIDER & COCKTAILS LEISURE EXPERIENCE @ HOME DILUTE EXPERIENCE • Adult drinks are a sour
Slide 42: We have the leading brand to capitalise on this opportunity in GB
We have the leading brand to capitalise on this opportunity in GB WITH SOFT DRINKS WITH ALCOHOL WITH HOT DRINKS WITH WATER 42
Slide 43: Summary
Summary An excellent year with a strong financial performance Strong progress implementing our strategy Continued progress in our international markets Anticipate increasingly challenging trading environments We have the right strategy and plans to win 43