Britvic — H1 2009 Earnings Presentation
36 slides from Britvic's earnings presentation, July 2009
Slide 1: Britvic
\d BRITVIC ple Dedicated to creating and building soft-drink brands that delight consumers...always!
Slide 2: Overview of Britvic
Overview of Britvic z The investment case z The strategy z Competitive differentiation A Powerful and Resilient Brand Portfolio z In the right categories z Diversified market share z Core and seed brands z The innovation programme Britvic Ireland z A challenging market z In shape for growth Strong F
Slide 3: The Investment Case
The Investment Case Britvic is a leading branded soft drinks business in the UK and Ireland STRONG MARKET POSITIONS A POWERFUL AND RESILIENT BRAND PORTFOLIO #1 in UK stills #1 or #2 brands in the key #1 in UK Licensed On-Premise categories (with the #1 cola) Barriers to entry for entrants looking to
Slide 4: A Clear Strategy for Growth
A Clear Strategy for Growth The Preferred Brands for Consumers Drive Availability where products not sold Grow through Innovation Grow Prices Optimising Efficiency and Cash Generation Expand in Europe SHAREHOLDER RETURN 4
Slide 5: Competitive Differentiation
Competitive Differentiation 5
Slide 6: Overview of Britvic
Overview of Britvic z The investment case z The strategy z Competitive differentiation A Powerful and Resilient Brand Portfolio z In the right categories z Diversified market share z Core and seed brands z The innovation programme Britvic Ireland z A challenging market z In shape for growth Strong F
Slide 7: GB Market Volumes And Growth Rates
GB Market Volumes And Growth Rates 000’s Litres 3.1% 5.8% 4.4% -6.5% -2.9% -4.0% -7.6% -6.6% -7.1% Carbs 4.6% 2.9% 3.1% 11.6% -8.6% -2.9% 0.4% -5.3% -3.0% -5.2% -5.7% -9.0% -9.0% -3.9% -7.1% -4.9% -8.3% 1.7% -0.8% Stills -14.8%3.0% -1.8% 0.7% 1.1% -2.4% -2.4% Diet/Low Cal -36.7% -26.5% Regular / Ful
Slide 8: Strong And Growing Market Positions
Strong And Growing Market Positions Stills (£3.5bn) Carbonates (£2.6bn) Take-Home (£6.1bn) Stills (£0.8bn) Carbonates (£1.5bn) Licensed On-Trade (£2.3bn) Source: AC Nielsen Scantrack data to 11 April 2009 & Licensed On Trade data to January 2009 Total Coverage MAT 8
Slide 9: Core GB brands
Core GB brands z #1 stills brand in the take-home z # 1 cola in Licensed on-trade (2) market (1) z # 2 branded cola in take-home (1) z 10th largest UK grocery brand by value (4) z # 2 global soft drinks brand (3) z # 1 ready-to-drink kids’ stills brand (1) z #1 packaged drink in On-Premise (2) z Now
Slide 10: Seed GB brands
Seed GB brands z World’s number one sports drink z Ambition to be the #2 GB sports drink by summer 2011 z Juicy drench added in 2009 z 201% volume growth YOY (1) z Acquired by PepsiCo in 2008 z A small category that Britvic can build z Genuine cola innovation z Into Take-Home this year z A year of c
Slide 11: 2009 Brand Investment
2009 Brand Investment Heavyweight TV 2 major campaigns Wimbledon On TV for the first campaign z Twenty20 Cricket in z An on-pack to win time z Back on TV across market now. tickets to the z Olympic gold the summer championships medallist Tim z Tie-in with Nokia still to come z Laura Robson signed Br
Slide 12: 2009 Innovation & Product Launches
2009 Innovation & Product Launches H1 H2 Great Innovation Delivery Through The Year 12
Slide 13: Overview of Britvic
Overview of Britvic z The investment case z The strategy z Competitive differentiation A Powerful and Resilient Brand Portfolio z In the right categories z Diversified market share z Core and seed brands z The innovation programme Britvic Ireland z A challenging market z In shape for growth Strong F
Slide 14: Irish Soft Drinks Market Volume
Irish Soft Drinks Market Volume 2007/08 2008/09 Macro Conditions Impacting The Soft Drinks Category Source: Total Scantrack ROI (grocery multiples and forecourts) 14
Slide 15: Britvic Ireland - In Shape For Growth
Britvic Ireland - In Shape For Growth Faster, Simpler, The number 1 The number 1 Winning water orange carbonate z Investing in our z “Bodies never lie” TV z New TV campaign production facilities campaign z Delivering its z SAP implementation z New packs and message through underway flavours humour z
Slide 16: Overview of Britvic
Overview of Britvic z The investment case z The strategy z Competitive differentiation A Powerful and Resilient Brand Portfolio z In the right categories z Diversified market share z Core and seed brands z The innovation programme Britvic Ireland z A challenging market z In shape for growth Strong F
Slide 17: Half-Year Headlines
Half-Year Headlines H109 H108 % £’m £’m change Revenue 483.2 454.7 6.3 EBIT 31.9 31.4 1.6 EBIT Margin 6.6% 6.9% (30)bps Profit After Tax 14.8 13.0 13.8 Free Cashflow (24.6) (10.5) (134.3) Adjusted Net Debt (442.7) (454.1) 2.5 Basic Earnings Per Share 6.9p 6.1p 13.1 Interim Dividend Per 4.1p 3.8p 7.9
Slide 18: Cashflow
Cashflow H109 H108 % £m £m change Operating profit pre-exceptionals 31.9 31.4 1.6 Depreciation & amortisation 21.6 23.8 (9.2) EBITDA 53.5 55.2 (3.1) Working capital (23.9) (31.4) 23.9 Capital expenditure (26.5) (12.1) (119.0) Pension contribution (10.0) (10.0) 0.0 Other (17.7) (12.2) (45.1) Free cas
Slide 19: A Strong Refinancing Result
A Strong Refinancing Result z New £283M bank facility in z US private placement debt of place £229M Forward start facility Fully hedged and agreed April 2009 swapped into sterling in February 2007 5 out of 6 banks retained All-in swapped fixed coupon rate of 6% Abbey Santander joins our ba
Slide 20: Summary
Summary Britvic is a Leading Branded Soft Drinks Business in the UK and Ireland z Strong and Growing Market Positions z A Powerful and Resilient Brand Portfolio z An Ever-Expanding Relationship with PepsiCo z Consistently Deliver on Key Metrics A Solid Investment Case in Challenging Times 20
Slide 21: Britvic
\d BRITVIC ple Dedicated to creating and building soft-drink brands that delight consumers...always!
Slide 22: Supplementary Information
\d BRITVIC ple Supplementary Information
Slide 23: A Strong Track Record Since Flotation
A Strong Track Record Since Flotation GB/INTL REVENUE £m GB/INTL EBIT £m EPS FREE CASH FLOW £m Consistent Delivery Of Key Metrics 23
Slide 24: Core Brands Review
Core Brands Review • 4.4% category • 4.0% fruit carbonates • 4.0% category volume growth category volume volume decline decline, lemon & lime in growth • 7.9% outperformance • 6.3% out of the category performance in • 21.5% outperformance the last 12 weeks of the category • Volume share gain of 1.7%
Slide 25: Core Brands Review
Core Brands Review z Remaining in z Category in 4.9% z Category in 3.6% growth in Grocery volume decline volume decline z Still the number 1 z Robinsons z Value share up 0.9% packaged drink in outperforming the Licensed On- category by 8.2% Premise z Reformulation and repackaging to z Last 12 weeks
Slide 26: The GB Carbonates Market
The GB Carbonates Market Sub-sectors include cola, flavoured carbonates, lemonade, mixers and glucose/stimulant drinks Over 60% channelled though Take-Home Take home 62% Licensed On-Premise 38% market Take-Home market dominated by CCE (53%) Britvic #2 (12.5%) GSK #3 (8%) – Lucozade GB’s le
Slide 27: Seed Brands Review
Seed Brands Review z Plain-water category down 9% z Category in value growth of 1.8% (MAT) z Drench outperforming category by 225% z Volume share of z Juicy Drench launched 5.0% in last 12 Spring 2009 weeks z 12 weeks after launch has the 2nd highest ROS z Ambition to be the in the adult juice- numb
Slide 28: Seed Brands Review
Seed Brands Review z New pack formats z Broadening the z A year of to drive in-home footprint beyond consolidation to availability London bring the brand in- house z Listing confirmed in z Production brought in-house January z Production in-house major multiples 2009 early 2010 z In Boots it achieve
Slide 29: Flawlessly-Executed Brand Equity Programmes…
Flawlessly-Executed Brand Equity Programmes… 29
Slide 30: …Coupled With Successful In-Store Execution
…Coupled With Successful In-Store Execution 30
Slide 31: GB Soft Drinks Market Volume
GB Soft Drinks Market Volume 000’s Litres 2006/07 2007/08 200,000 2008/09 190,000 180,000 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 08 08 08 08 08 09 09 09 09 09 09 09 09 09 09 09 09 09 0. 0. 1. 2. 2. 1. 2. 2. 3. 4. 5. 5. 6. 7. 7. 8. 9. 9. .1 .1 .1 .1 .1 .0 .0 .0 .0 .0 .0 .0 .0
Slide 32: The Stills Market in GB
The Stills Market in GB Sub-sectors include squash, water, fruit drinks, pure juice and sports drinks Number 1 in stills in UK Over 80% channelled through Take-Home market Take-Home market fragmented Britvic #1 (10.7%) Take home Licensed On-Premise 18% Danone #2 (9.5%) – (Evian, Volvic, Badoit 8
Slide 33: Channels to Market in GB
Channels to Market in GB 3 main channels to market: Take Home (£6.1bn) (1) Customers include large grocery retailers, (primarily Tesco, J Sainsbury, Asda, Wm Morrison), high street stores (for example, WHSmith), ‘‘impulse’’ channel retailers (convenience stores, garage forecourt sales and off-lice
Slide 34: The GB Take-Home Market
The GB Take-Home Market Take-Home by Retail Value Sales (£6.1 billion) 07-09 YOY CAGR Stills (2.4)% (4.6)% Pure Juice 0.6 % (4.0)% Juice Drinks (1.1)% (2.2)% Plain Water (8.7)% (10.5)% Squash (1.6)% 3.6 % Dairy (0.6)% 1.6 % Smoothies (10.2)% (30.0)% Water Plus (8.4)% (7.6)% Sports Drinks 9.1 % 1.0 %
Slide 35: The GB Licensed On-Premise Market
The GB Licensed On-Premise Market Licensed On-Trade by Retail Value Sales (£2.3 billion) 07-09 YOY CAGR Stills (2.2)% (2.0)% Pure Juice / (2.0)% (1.2)% Fruit Drinks Mixers (2.3)% (2.7)% Squash (1.1)% (0.7)% Water (7.4)% (6.4)% Carbonates (3.1)% (2.8)% Cola (2.0)% (1.6)% Lemonade (3.7)% (4.1)% Flavou
Slide 36: Guidance for 2009
Guidance for 2009 Additional revenue: Total innovation this year to add ~1% to the GB top line Costs: Raw materials inflation guidance remains unchanged at 4.0 to 4.5% Interest similar to 2008. 2009 sees lower LIBOR but higher pricing Tax rate similar to H1 Savings: GB £1.0-1.5m in 2009, £