Britvic — H1 2024 Earnings Presentation
30 slides from Britvic's earnings presentation, May 15, 2024
Slide 1: FY24 Interim Results Presentation
FY24 Interim Results Presentation An excellent performance, confident of continued sustainable growth 15 May 2024
Slide 2: Conference call dial-in details
Conference call dial-in details Dial in UK-Wide: +44 (0) 33 0551 0200 number(s) UK Toll Free: 0808 109 0700 Password (if prompted) Quote Britvic Interim Results when prompted by the operator 2
Slide 3: Strategic and operational review
Simon Litherland Chief Executive Officer Strategic and operational review A winning growth strategy
Slide 4: Britvic is outperforming across all key metrics
Britvic is outperforming across all key metrics Volume Revenue EBIT margin Adjusted EBIT +4.4% +11.2% +60bps +17.7% Employee Calories per Carbon Adjusted EPS engagement serve average reduction* +18.5% 78 20 33% 4 * Reduction in direct emissions (SBTi Scopes 1&2 since 2017, to end FY23) All financial
Slide 5: Britvic's compelling growth algorithm continues to deliver outperformance
Britvic’s compelling growth algorithm continues to deliver outperformance ABOVE AND BEYOND CATEGORY GROWTH + + Outperforming Double-digit Strong double- the market with growth digit growth in family favourite in Brazil new spaces brands Category volume growth & price/mix 5
Slide 6: Soft drinks category offers consistent long-term growth
Soft drinks category offers consistent long-term growth FAMILY FAVOURITES + BRAZIL + NEW SPACES CATEGORY Category growth L6M GB Ireland France Brazil 13.1% • Resilient and growing category 12.2% • Low Private Label presence • Category unwinding from inflation-driven price 7.3% • Volume growth return
Slide 7: Excellent H1 revenue growth – category outperformance following our algorithm
Excellent H1 revenue growth – category outperformance following our algorithm Outperforming the market with family favourite brands + Double digit growth in Brazil + Strong double-digit growth in new spaces 63.5% 34.7% 7.0% Family favourites Brazil New growth spaces Breakdown of 11.2% H1 plc revenue
Slide 8: Our family favourite brands continue to outperform and build momentum
Our family favourite brands continue to FAMILY FAVOURITES + BRAZIL + NEW SPACES outperform and build momentum CATEGORY Pepsi revenue +8.5% Fruit Shoot revenue +7.6% • Pepsi MAX core and flavours both driving growth • #1 kids drink, with no added sugar, artificial flavours or colours • Investment in
Slide 9: Our family favourite brands continue to outperform and build momentum
Our family favourite brands continue to FAMILY FAVOURITES + BRAZIL + NEW SPACES outperform and build momentum CATEGORY Highlights… Lipton revenue +27.6% Ballygowan revenue +18.5% • Fastest growing market segment* in 2024 • Strong growth from both core and Hint of Fruit flavours • Clear category lead
Slide 10: Accelerating growth in Brazil: +34.7% revenue
Accelerating growth in Brazil: +34.7% revenue FAMILY FAVOURITES + BRAZIL + NEW SPACES CATEGORY Extra Power Growing our Investing to build scale acquisition established brands and margin outperforming • Concentrates +22% • Extra Power +34.9% • 39% merchandising increase • RTD juice +19% • Successfull
Slide 11: Building incremental growth: new spaces +63.5%
Building incremental growth: new spaces +63.5% FAMILY FAVOURITES + BRAZIL + NEW SPACES CATEGORY Aqua Libra revenue +35% Global Premium revenue +24% • Both packaged and taps in growth • London Essence winning new contracts • Packaged revenue +106.8% including Center Parcs and Miller & Carter • Taps r
Slide 12: Building incremental growth: new spaces +63.5%
Building incremental growth: new spaces +63.5% FAMILY FAVOURITES + BRAZIL + NEW SPACES CATEGORY Plenish +168.5% Jimmy’s introduction • Plenish now #3 plant-based milk brand • Expanding distribution through Britvic network • Barista range distribution +191% since September • New bigger 380ml bottle a
Slide 13: Winning strategy delivering strong growth
Winning strategy delivering strong growth • Excellent first half performance, continuing momentum across all key metrics • Growth is following our clear and compelling algorithm: • Category growth • Family favourite brands outperforming the market • Brazil and New Growth Spaces materially contributi
Slide 14: Financial review
Rebecca Napier Chief Financial Officer Financial review Record-breaking first half performance
Slide 15: Excellent progress across our key financial performance metrics
Excellent progress across our key financial performance metrics H1 2024 Vs H1 2023 Volume 1,204.7m +4.4% Net Revenue £880.3m +11.2% A&P investment £30.2m +38.9% Adjusted EBIT £100.4m +17.7% •Britvic’s best ever H1 performance Adjusted EBIT margin 11.4% +60bps •Positive cascade through key financial
Slide 16: Winning across the portfolio in GB
Winning across the portfolio in GB LEAD MARKET GROWTH IN GB 2024 ∆ Vs 2023 Volume 841.9 +2.6% •Positive volume performance •Revenue growth in both retail and Average Realised Price (ARP) 70.3p +6.0% hospitality Net revenue £592.2m +8.8% •Margin expansion, while increasing A&P Brand contribution £248
Slide 17: Brazil brands delivering outstanding volume and revenue growth
Brazil brands delivering outstanding volume ACCELERATE AND and revenue growth EXPAND IN BRAZIL H1 2024 Vs H1 2023 Volume 175.3 +22.3% •Strong growth in both existing and acquired brands driven by a laser focus on execution Average Realised Price (ARP) 58.2p +10.2% •Extra Power acquisition: Net reven
Slide 18: International markets growth
GLOBALISE PREMIUM BRANDS International markets growth & IMPROVE PROFITABILITY IN WESTERN EUROPE H1 2024 Vs H1 2023 Volume 187.5 (1.3)% •France, Ireland and International markets all grew revenue at c.8% Average Realised Price (ARP) 99.2p +9.6% •Ireland strong despite DRS introduction Net revenue £18
Slide 19: Targeted investment to support sustainable growth
Targeted investment to support sustainable growth TECHNOLOGY & DIGITAL BRAND-BUILDING CAPACITY • SAP EWM rollout complete in GB&I • A&P spend +38.9% in H1 • GB: new can line operational in Rugby • E-commerce: Tango in TikTok shop • Pepsi brand refresh • Ireland: ramping up Hint of Fruit production i
Slide 20: Targeted investment to support sustainable growth
Targeted investment to support sustainable growth PEOPLE PLANET • Expansion of field sales force • PPA to supply 75% GB factory grid electricity from solar • New online learning platform • Beckton heat recovery system fully operational • Expanded graduate and apprenticeship schemes • Water process p
Slide 21: Managing cash and interest, to translate strong profit growth into earnings progression
Managing cash and interest, to translate strong profit growth into earnings progression 17.7% 18.5% • Net interest cost £14.9m = lower than prelims 11.2% guidance range, careful cash management • Positive translation through to earnings • £150m USPP refinancing completed Revenue growth EBIT growth E
Slide 22: Delivering on our capital allocation priorities
Delivering on our capital allocation priorities CAPEX DIVIDEND (4-5% of revenue) (50% PAYOUT POLICY) Strong H1 £32.9m Interim dividend of 9.5p (+15.9%) Underlying ACCRETIVE M&A Cash DEBT Generation (Full year range 1.5x – 2.5x) Extra Power acquisition completed October Leverage 2.3x despite H1 peak
Slide 23: Guidance and Outlook
Guidance and Outlook • Effective tax rate 23% to 24% • Net interest cost £30m to £32m (updated) • £5m cash pension contribution • Capital spend £75m to £85m • Adjusting items £13m to £15m, most of which is recurring non-cash acquisition-related amortisation • Cost inflation low to mid-single digit %
Slide 24: H2 Marketing and Innovation Highlights
H2 Marketing and Innovation Highlights 24
Slide 25: H1 outperformance and momentum set us up for a strong full year
H1 outperformance and momentum set us up for a strong full year • Record breaking first half performance as strategy continues to deliver • Balanced revenue growth across volume and price, in line with algorithm • Margin expansion, while investing to accelerate growth • Strong conversion to earnings
Slide 26: Thank you
Ww BRITVIC Thank you
Slide 27: Conference call dial-in details
Conference call dial-in details Dial in UK-Wide: +44 (0) 33 0551 0200 number(s) UK Toll Free: 0808 109 0700 Password (if prompted) Quote Britvic Interim Results when prompted by the operator 27
Slide 28: Appendix
Ww BRITVIC APPENDIX
Slide 29: Our strategy continues to deliver growth
Our strategy continues to deliver 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 GROWTH ACCELERATE AND & IMPROVE PROFITABILITY
Slide 30: A disciplined and balanced capital allocation policy
A disciplined and balanced capital allocation policy CAPEX DIVIDENDS c.4-5% investment in Progressive dividend policy organic growth and innovation STRONG 50% payout ratio UNDERLYING FREE CASH FLOW MERGERS & ACQUISITIONS DEBT CONVERSION Accretive opportunities Maintain long-term debt leverage to acc