Britvic — FY2023 Earnings Presentation
31 slides from Britvic's earnings presentation, Nov 22, 2023
Slide 1: Investing to accelerate growth – Preliminary Results
Investing to accelerate growth Preliminary Results 22 November 2023
Slide 2: Agenda
Agenda Simon Litherland Chief Executive Officer Strategic & operational review Strong performance & excellent progress Rebecca Napier Chief Financial Officer Financial review A confident financial performance Simon Litherland Chief Executive Officer Looking ahead Continuing to deliver superior growt
Slide 3: Strategic & operational review
Simon Litherland Chief Executive Officer Strategic & operational review Strong performance & excellent progress
Slide 4: Strong performance and excellent progress
Strong performance and excellent progress • Once again delivering, in another challenging year • Winning portfolio of trusted, family favourite brands • Investing to accelerate growth • Our business strategy continues to underpin superior and sustainable returns • Identified clear and compelling dri
Slide 5: Delivering across People, Planet and Performance
Delivering across People, Planet and Performance Revenue Margin Adjusted EPS Cash returned +6.6% (10)bps +6.5% £149.2m 1.9x adjusted net 78 employee 22 calories per 33% carbon debt leverage engagement serve average reduction* 5 * Reduction in Scope 1 and 2 since 2017
Slide 6: 2023 highlights
2023 highlights Leading the market Bolt-on acquisitions Successfully scaling Leveraging capability in low & no sugar to access fast- premium brands in new growth spaces carbonates growing categories 6
Slide 7: Winning in low and no sugar carbonated brands
Winning in low and no sugar carbonated brands Pepsi MAX Tango • No. 1 soft drink brand in GB retail • Fastest-growing fruit flavoured carbonate • Taste preferred by 70% of consumers • Increased, multi-channel marketing investment • Proven marketing platforms (football and music) • 'Get Tango’d' camp
Slide 8: Successfully scaling our premium brands
Successfully scaling our premium brands LONDON ESSENCE MATHIEU TEISSEIRE • 7.4k new distribution points across GB retail and hospitality • Growth across Europe, Brazil, Asia and Middle East • 1,500 Freshly Infused founts in GB • New pack formats and flavours • Listed in 38/100 World’s best bars & 15
Slide 9: Leveraging our capability to scale new growth spaces
Leveraging our capability to scale new growth spaces PLENISH AQUA LIBRA • Distribution gains: M*lks +72%*, Shots +463%** • 4 distinct product areas – packaged and infused, flavour tap, commercial taps and table bottling • M*lks #4 brand in the category • Account wins across major corporates, retail
Slide 10: Leveraging our capability to scale new growth spaces
Leveraging our capability to scale new growth spaces BRAZIL – ACQUISITION OF EXTRA POWER GB – ACQUISITION OF JIMMY’S ICED COFFEE • Access to fast-growing, high-margin energy category • Access to fast-growing UK ready-to-drink iced coffee category • Improved route to market into Mid-West • Fastest gr
Slide 11: People and Planet at the heart of our business
People and Planet at the heart of our business HEALTHIER PEOPLE HEALTHIER PLANET Healthier consumer choices Decarbonisation roadmap Employee belonging Community Water Reimagining and wellbeing partnerships stewardship packaging 11
Slide 12: Financial review
Rebecca Napier Chief Financial Officer Financial review A confident financial performance
Slide 13: A confident financial performance
A confident financial performance 2023 % vs 2022 Volume 2,463.1m (2.2)% Net Revenue £1,748.6m +6.6% Year on year % H1 H2 Adjusted EBIT £218.4m +5.9% Adjusted EBIT margin 12.5% (10)bps 7.8% 5.6% Adjusted EPS 61.0p +6.5% DPS 30.8p +6.2% FCF £129.8m +£1.0m Debt leverage 1.9x - -1.8% -2.5% ROIC 17.9% +1
Slide 14: GB - Growth across Britvic and Pepsi brands
GB - Growth across Britvic and Pepsi brands 2023 % Vs 2022 Revenue % year on year Volume 1,750.2m (2.3)% Average Realised Price (ARP) 67.9p +10.6% Net revenue £1,187.7m +7.9% 8.9% 7.2% Brand contribution £479.6m +12.6% Brand contribution margin 40.4% +170bps Retail Hospitality • Marginal volume decl
Slide 15: Brazil – Brands delivering robust volume and revenue growth
Brazil – Brands delivering robust volume and revenue growth 2023 % Vs 2022 Volume (0.9)% Revenue % year on year 296.5m Average Realised Price (ARP) 52.7p +1.0% Net revenue £156.2m — Brand contribution £36.2m +2.2% 56.8% 46.8% Brand contribution margin 23.2% +50bps 38.0% 8.7% 10.1% 5.9% • Poor yield
Slide 16: Other International – growth in Ireland offset by challenges in France
Other International – growth in Ireland offset by challenges in France 2023 % Vs 2022 Volume 416.5m (2.7)% Regional revenue % year on year Average Realised Price (ARP) 97.2p +8.6% Net revenue £404.7m +5.7% 24.7% Brand contribution £99.6m (8.7)% Brand contribution margin 24.6% (390)bps 13.1% • Advers
Slide 17: Adjusting items, primarily due to non-cash adjustments
Adjusting items, primarily due to non-cash adjustments 2023 £m 2023 £m 2023 £m Cash Non-cash Total Strategic restructuring costs 5.2 5.2 M&A related costs 2.4 2.4 Ireland DRS 0.5 0.5 Acquisition related amortisation 8.3 8.3 Pension past service cost 20.5 20.5 Total EBIT adjusting items 8.1 28.8 36.9
Slide 18: Successfully managing input costs to ensure availability and cost visibility
Successfully managing input costs to ensure availability and cost visibility • Supply resilience of key components secured through supplier relationship management • Sustainability credentials key to supplier partnerships • Rolling 18 month hedging policy with >80% coverage in FY24, where hedgeable,
Slide 19: Targeted investment to accelerate our growth
Targeted investment to accelerate our growth CAPACITY & BRAND PEOPLE & INFRASTRUCTURE BUILDING CAPABILITY • New capacity added in GB, Ireland & Brazil • c.9% increase in A&P spend behind our • Additional field sales resource to support • Digitising manufacturing network brands growth in immediate co
Slide 20: A disciplined capital allocation policy
A disciplined capital allocation policy CAPEX DIVIDENDS Investment in organic growth & innovation, Progressive dividend policy 5.0% to 5.5% of revenue STRONG 50% payout ratio UNDERLYING FREE CASH FLOW MERGERS & ACQUISITIONS DEBT CONVERSION Accretive opportunities Maintain long-term debt leverage to
Slide 21: Guidance
Guidance • Effective tax rate 23% to 24% • Net interest cost of £34m to £36m, reflecting increased cost of borrowing • £5m cash pension contribution • Capital spend £75m to £85m • Adjusting items £13m to £15m, most of which is recurring non-cash acquisition-related amortisation • Inflation low to mi
Slide 22: Looking ahead
Simon Litherland Chief Executive Officer Looking ahead Continuing to deliver superior growth & shareholder returns
Slide 23: Soft drinks is a resilient growth category
Soft drinks is a resilient growth category Continued category Soft drinks outperforming wider Brands driving the growth forecast* FMCG in value and volume** growth Value and Unit growth vs 2YA Total FMCG Soft Drinks • Private label presence in 21.0% soft drinks lower than 2-4% most FMCG categories •
Slide 24: Consistent track record of superior shareholder returns
Consistent track record of superior shareholder returns • 5-year revenue CAGR 5.2% • Consistently outperformed FTSE and soft drinks peer set Soft Drinks TSR* Britvic FTSE250 FTSE100 peer set* 1 Year 19.4% -1.3% 7.0% 10.7% 5 Year 23.7% 2.8% 23.8% -4.9% 24 *Total shareholder return to 31 Oct 2023. Sof
Slide 25: Our strategy continues to drive growth
Our strategy continues to drive 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 AND & IMPROVE PROFITABILITY GROWTH I
Slide 26: Compelling future growth drivers
Compelling future growth drivers Category Family favourite Double digit Strong double volume growth brands in targeted growth digit growth in & price/mix channels in Brazil new spaces 26
Slide 27: Leading market growth through family favourites
Leading market growth through family favourites Rev Growth 5Y CAGR +7.4% +14.2% +20.8% Market Share 32.0% 9.4% 66.6% 27 Sources: Internal net revenue; market share = Nielsen total coverage to 23.09.23
Slide 28: Brazil delivering double-digit top line growth
Brazil delivering double-digit top line growth 2019-2023 CAGR 12.0% 7.5% Strong Britvic presence Medium Britvic presence Lower Britvic presence Volume Revenue Low priority region 28
Slide 29: Scaling new spaces will deliver accelerated growth
Scaling new spaces will deliver accelerated growth Global Premium Water + Plant-based Iced Coffee Energy Combined portfolio worth >£70m Revenue in 2023 29
Slide 30: In Summary
In Summary • Another year of strong delivery and market outperformance • Operating in a resilient and growing category • Our strategy continues to deliver market-beating returns • Continuing to invest in our brands, people, technology, supply chain and sustainability • Clear and compelling future gr
Slide 31: Thank you
BRITVIC Thank you