Britvic — Investor Presentation (2013)
27 slides from Britvic's investor presentation, 2013
Slide 1: Britvic plc Investor Presentation Spring 2013
Britvic plc Investor Presentation Spring 2013
Slide 2: Agenda
Agenda Update on proposed merger with AG Barr PLC Near-term priorities 2013 Guidance 2
Slide 3: Merger update
Merger update •On 13th February 2013, the OFT referred the merger to the Competition Commission (“CC”) •Offer has therefore lapsed and the scheme will not proceed •Britvic is no longer in an Offer Period •OFT concerned that the merger could reduce competition between certain brands of A.G. Barr and
Slide 4: Summary
Summary • Simon Litherland appointed CEO • Clear near-term priorities are delivering an improved business performance in the core portfolio • Strong Q1 performance • Fruit Shoot return to market remains on track • Emerging US franchise business gaining momentum • Guidance for 2013 4
Slide 5: Clear near-term priorities remain unchanged
Clear near-term priorities remain unchanged Priorities 1. Continue to drive an improved performance from the core brand portfolio 2. Re-establish Fruit Shoot following the recall in July 3. Support the acceleration of the US Fruit Shoot business 4. Realise additional cost savings 5. A continued focu
Slide 6: 1. Continue to drive an improved performance from the core brand portfolio
1. Continue to drive an improved performance from the core brand portfolio
Slide 7: 2012 market overview
2012 market overview GB France Ireland Take-home Take-home Take-home market volume market volume market volume growth growth decline of 0.3% of 1.8% of 2.2% In GB carbonates grew whilst stills declined In France the sugar tax hit carbonates volumes whilst stills grew Ireland has remained under
Slide 8: Q1 2013 market overview
Q1 2013 market overview GB France Ireland Take-home Take-home Take-home market volume market volume market volume decline decline decline of 2.4% of 1.7% of 7.6% In GB the high street saw declining footfall in December In France post-election austerity is starting to impact consumers Ireland h
Slide 9: Q1 2013 – strong group revenue growth of 4.8%
Q1 2013 – strong group revenue growth of 4.8% GB revenue growth of 5.4%, outperforming the market Driven by carbonates revenue growth of 9.2% With both price and volume growth Stills in growth ex-Fruit Shoot France revenue growth of 4.3%, Driven by price increase and pack innovation Agains
Slide 10: Ireland - restructuring the business to improve profitability
Ireland - restructuring the business to improve profitability Value packs and affordable innovation have led to significant share gains in the impulse channel MiWadi squash has taken a 1000bps of share in 2 years as a result of DC launch Sales of 3rd party brands sold in licensed wholesale is
Slide 11: France – strong response to the macro challenges
France – strong response to the macro challenges Strong price increases secured and new pack formats introduced in response to high raw material inflation Successfully developing the juice category with the Pressade brand Fruit Shoot recovery plan on-track All major listings secured “Multi
Slide 12: 2012 – a year of great success for GB carbonates
2012 – a year of great success for GB carbonates In a year of major sporting activity Pepsi has achieved substantial volume and value share growth New pack innovation in 250ml cans has grown the category “Power of One” joint initiatives with PepsiCo have driven category growth Marketing camp
Slide 13: Returning GB stills to growth
Returning GB stills to growth Robinsons A successful media campaign to improve the double concentrate (DC) message Consumers switching to DC is margin accretive DC is increasing overall squash consumption Growing market share* Robinsons – defining the squash category * Source: Nielsen Dece
Slide 14: Returning GB stills to growth
Returning GB stills to growth J20 Gaining share with a successful Christmas plan Premium categories under pressure but J20 in YOY growth Lipton Ice Tea Category in value growth +30% The number 1 “ice tea” brand Stevia Introduced to the SoBe and Juicy drench ranges * Source: Nielsen D
Slide 15: 2. Re-establish Fruit Shoot following the recall in July
2. Re-establish Fruit Shoot following the recall in July
Slide 16: Fruit Shoot recovery is on-track
Fruit Shoot recovery is on-track In-store within the expected 6 week timeframe Returned to historical supply levels Brand measures are back towards pre-recall levels GB Distribution and frequency measures have returned to pre-recall levels. Market share continues to recover Running a full
Slide 17: 3. Support the acceleration of the US Fruit Shoot business
3. Support the acceleration of the US Fruit Shoot business
Slide 18: Acceleration of the US Fruit Shoot business
Acceleration of the US Fruit Shoot business Agreements now in place with 5 PepsiCo bottlers PCVA announced at prelims Distribution agreements for 9 states Achieved 20,000 points of distribution Manufacture in-market by PBV began May 2012 18
Slide 19: Step-changing the footprint across the US in 2013
Step-changing the footprint across the US in 2013 • Additional 21 states by summer 2013 with PAB • Profits re-invested to support the brands development • Focus continues to be convenience & gas channel 19
Slide 20: Agreement with Pepsi South West Europe for distribution of Fruit Shoot in Spain
Agreement with Pepsi South West Europe for distribution of Fruit Shoot in Spain Initial agreement for supply of finished goods from the UK Following the model used to supply the US Cost to serve will restrict profitability initially Distribution will be in both the grocery and convenience ch
Slide 21: Developing the franchise business
Developing the franchise business Dedicated team established in the US Britvic North America LLC up and running Combination of UK and experienced local talent recruited Leveraging Britvic strength of children’s juice drinks category with US partners Resource in place in south-east Asia to
Slide 22: 4. A focus on additional cost savings
4. A focus on additional cost savings
Slide 23: Reducing the cost base
Reducing the cost base Focus on sustained reduction of non value-add cost across the group Underlying group overheads down 3.9% in FY12 Continued to invest in the future growth drivers of the business A&P % of revenue maintained in 2012 Franchise – development of the US business Continue
Slide 24: 5. Improving cash generation and FCF conversion
5. Improving cash generation and FCF conversion
Slide 25: A greater focus on cash generation
A greater focus on cash generation FY12 profits and FCF were materially impacted by the Fruit Shoot recall Despite this the business generated FCF up 5% up on FY11 and as a result adjusted net debt was reduced by over £5m in FY12 Improved profit to cash conversion allowed the full year DPS to
Slide 26: 2013 Guidance
2013 Guidance EBIT to be in the range of £125m to £131m Including the remaining £8m cost associated to Fruit Shoot recall Raw material inflation will be low single digit Interest rate of 5.5% to 6%, reflecting bank facility and USPP debt Effective tax rate expected to be 24% to 25% Capit
Slide 27: Summary
Summary Core brands winning in market across the group Re-establishing Fruit Shoot is on-track The franchise business is building momentum Improving FCF generation and a focus on the cost base 27