Britvic — H1 2020 Earnings Presentation
27 slides from Britvic's earnings presentation, May 27, 2020
Slide 1: Britvic plc Interim Results 2020
Britvic plc Interim Results 2020 27 MAY 2020
Slide 2: Simon Litherland – Chief Executive Officer
Simon Litherland – Chief Executive Officer A robust start to the year, well‐ placed to navigate the pandemic
Slide 3: Recognising people during this humanitarian crisis
RECOGNISING PEOPLE DURING THIS HUMANITARIAN CRISIS THANK YOU TO: • The Britvic team Enjoying life’s • Our customers everyday moments has never been so • Our suppliers important • Everybody working to keep us safe and well 3
Slide 4: Interim Results Presentation agenda
INTERIM RESULTS PRESENTATION Simon Litherland • Update on the impact of Covid‐19 Well‐placed to weather the storm Joanne Wilson • Financial performance Strong momentum going into this period Robust liquidity position Covid‐19 modelling assumptions unchanged Simon Litherland • Strategic priorities Cl
Slide 5: A track record of delivery and strong momentum going into the crisis
A TRACK RECORD OF DELIVERY AND STRONG MOMENTUM GOING INTO THE CRISIS 2013 to 2019 H1 2020 REVENUE +1.4% Revenue CAGR + 3.9% Margin +350 bps MARGIN +80 bps EBIT +9.4% EPS +2.7% EPS CAGR + 9.2% DPS CAGR + 8.5% 5
Slide 6: Covid-19 update
COVID‐19 UPDATE Well‐placed to weather the storm Clear priorities from the very start • A robust multi‐channel business, operating in • Safeguarding our people a resilient category • Maintaining operational agility • Broad portfolio of trusted family favourite brands • Supporting our customers, supp
Slide 7: Safeguarding our people
SAFEGUARDING OUR PEOPLE • Following Government and Public Health Authority guidelines in all our markets • Protecting vulnerable employees and supporting those ill with Covid‐19 • Ensuring the highest standards of safety and hygiene at all sites • Enabling flexible working from home for all roles th
Slide 8: Maintaining operational agility
MAINTAINING OPERATIONAL AGILITY • Maintaining high service levels to customers to ensure brand availability remains consistent • Adapting our commercial plans to respond to channel shifts and reflect the changed environment • Business Capability Programme has facilitated greater flexibility to focus
Slide 9: Supporting our customers and communities
SUPPORTING OUR CUSTOMERS AND COMMUNITIES • Early signatory of the Justine Greening C‐19 Business pledge 9
Slide 10: Financial strength and disciplined action taken
FINANCIAL STRENGTH AND DISCIPLINED ACTION TAKEN Financial Strength Disciplined action taken • Supportive banking syndicate • Cut all non‐essential discretionary spend • Long‐term USPP debt holders • Reviewed marketing spend to optimise ROI • Business remains highly cash generative • Reduced capital
Slide 11: Well-placed to respond to the impact of Covid-19 on the consumer
WELL‐PLACED TO RESPOND TO THE IMPACT OF COVID‐19 ON THE CONSUMER Consumer trends: Britvic’s opportunity • Return of the big weekly shop, limited top‐up shopping • Strong market positions in at‐home • Increased demand for online delivery and click & collect • An over‐index on share in e‐commerce • Li
Slide 12: GB & Ireland multi-channel presence, Brazil and France predominantly At-Home
GB & IRELAND MULTI‐CHANNEL PRESENCE, BRAZIL AND FRANCE PREDOMINANTLY AH MARKET At‐Home volume % Out‐of‐Home volume % April volume % YOY GB 59% 41% GB & Ireland – At‐Home & Out‐of‐Home IRELAND 60% 40% FRANCE 91% 9% 12 12 BRAZIL 90% 10% INTERNATIONAL 31% 69% • Shift towards large packs in the At‐Home
Slide 13: Out-performing the At-Home channel in GB
OUT‐PERFORMING THE AT‐HOME CHANNEL IN GB GB weekly value change % YoY • At‐Home market saw strong volume – Nielsen Total Coverage and value growth in March as Lockdown starts Easter customers stocked up 2019 • Followed by a decline as people consumed stockpile • Taking out Easter year on year variab
Slide 14: Positive At-Home channel volume, driven by value pack formats
POSITIVE AT‐HOME CHANNEL VOLUME, DRIVEN BY VALUE PACK FORMATS GB At‐Home April GB April pack volume % YOY volume % YOY Mix trends dilutive for ARP and margin 43.2 24.9 69 16.4 12.1 10.1 11 ‐8.2 ‐10.9 ‐20.5 ‐64 ‐99 Total GB Robs Pepsi 7UP Tango Fruit Shoot J20 Lipton Small PET Dispense Large PET MP C
Slide 15: Joanne Wilson - Chief Financial Officer
Joanne Wilson ‐ Chief Financial Officer Strong momentum going into Covid‐19 Robust liquidity position
Slide 16: A strong first half going into Covid-19
A STRONG FIRST HALF GOING INTO COVID‐19 Metric Reported Adjusted % Revenue 698.8 +1.4% Adjusted EBIT 75.7 +9.4% Adjusted EBIT Margin 10.8% +80bps Adjusted EPS 19.0p 2.7% Dividend per share ‐ ‐ Adjusted Net Debt/EBITDA 2.5x ‐ Adjusted EBIT is a non‐GAAP measure and is defined as operating profit befo
Slide 17: Business unit highlights: GB and Ireland
BUSINESS UNIT HIGHLIGHTS GB STILLS GB CARBS TOTAL GB IRELAND Volume (1.0)% +7.9% +6.0% +6.4% ARP per litre +0.5% (3.0)% (2.7)% (2.2)% Revenue (0.4)% 4.6% +3.1% (1.9)% Brand contribution +11.4% (3.6)% +1.1% (1.3)% Brand margin % +500 bps (300) bps (80) bps +10 bps GB IRELAND • Pepsi, 7UP and Tango le
Slide 18: Business unit highlights: France, Brazil, International
BUSINESS UNIT HIGHLIGHTS FRANCE BRAZIL INTERNATIONAL Volume (9.7)% +17.3% (8.0)% ARP per litre +0.7% (0.4)% (0.5)% Revenue (8.9)% +17.0% (8.5)% Brand contribution (2.6)% +36.4% +47.1% Brand margin % +220 bps +350 bps +960 bps FRANCE BRAZIL INTERNATIONAL • EGalim law adversely impacting brand • Now d
Slide 19: Underlying fixed costs down despite additional sustainability costs
UNDERLYING FIXED COSTS DOWN DESPITE ADDITIONAL SUSTAINABILITY COSTS % Organic Constant • A&P reduction driven by H1 2020 Exchange Rate original media plan Total A&P spend 23.8 19.0% skewed to H2 to support A&P as a % of revenue 3.5% 110 bps sporting events, plus Covid‐driven action in Non‐brand A&P
Slide 20: Modelling considerations
MODELLING CONSIDERATIONS Input costs Reduced – now expect low single digit inflation Capital spend Reduced – now expected to be circa £50m Adjusting items Increased £12m to £15m (cash impact £7m to £10m including PY effect) Pension deficit cash contributions Reduced ‐ £15m with £5m deferred to Q1 FY
Slide 21: Robust balance sheet and liquidity position
ROBUST BALANCE SHEET AND LIQUIDITY POSITION • Successful recent re‐financing strengthens our ability to navigate the pandemic • Access to £1bn of debt facilities; undrawn facilities of approximately £300m • Headroom on banking covenants (3.5x Net Debt to EBITDA and 3.0x EBITDA to Net Interest Expens
Slide 22: Simon Litherland – Chief Executive Officer
Simon Litherland – Chief Executive Officer Good progress made on our strategic priorities Already planning for the future
Slide 23: A clear strategic framework for the future
A CLEAR STRATEGIC FRAMEWORK FOR THE FUTURE Build local favourites Healthier people, Flavour Innovate to STRATEGIC and global premium Healthier planet billions of access new PRIORITES brands water occasions spaces MARKET FOCUS ROW Lead market Globalise premium brands Accelerate and growth & improve p
Slide 24: Focused near-term priorities to successfully navigate the pandemic
FOCUSED NEAR‐TERM PRIORITIES TO SUCCESSFULLY NAVIGATE THE PANDEMIC Build local favourites and global premium brands Healthier people, Healthier planet • Leverage supply chain investment • Competitive edge from leadership and pack flexibility to realise in low/no sugar brands increased At‐Home channe
Slide 25: Confidence in delivering value for stakeholders
CONFIDENCE IN DELIVERING VALUE FOR STAKEHOLDERS • Track record of delivery and strong first half momentum • Purpose‐driven | Consumer‐centric • Beneficial category trends • A portfolio of enduring, trusted brands • Focus on Healthier People | Healthier Planet • Financial strength and operational agi
Slide 26: Q&A participation
Q&A PARTICIPATION 1. WEBCHAT ‐ Ask a question though the webcast online chat. The call host will read the questions out 2. IN PERSON ‐Dial the following numbers and enter the access code 888150 United Kingdom 0800 640 6441 United Kingdom (Local) 020 3936 2999 United States 1 855 9796 654 United Stat
Slide 27: Thank you
Thank you 27 MAY 2020