Britvic — H1 2012 Earnings Presentation
40 slides from Britvic's earnings presentation, 2012
Slide 1: Britvic plc Interim results 2012
Britvic plc Interim results 2012
Slide 2: Gerald Corbett, Chairman
Gerald Corbett Chairman Ce, (ic : mpto™} ee ecg 2 tog eric ads “e2 Dea BT 70 We ee v7 Mh AS le PS] BRITVIC
Slide 3: Agenda
Agenda Financial performance John Gibney Britvic and the market review Paul Moody
Slide 4: John Gibney, Group Finance Director
John Gibney Group Finance Director
Slide 5: Group performance
Group performance +1.7% (6.9)% (60)bps (8.7)% +26.6% £21.6m +3.9% Group Group EBITA Group EBITA Adjusted Improved cash Reduction in Continued revenue margin EPS of generation net debt to dividend £41.9m 6.5% 8.4p (£47.1m) £534.4m growth to £641.1m 5.3p EBITA is defined as operating profit before exc
Slide 6: GB carbonates
GB carbonates H112 H111 % £’m £’m Change Volume (m. litres) 595.0 561.1 6.0 ARP per litre (pence) 44.1p 43.8p 0.7 Revenue 262.1 245.7 6.7 Brand contribution 91.1 93.3 (2.4) Brand contribution margin 34.8% 38.0% (320) bps Pepsi grows both volume Margin decline due to and value share high raw material
Slide 7: GB stills
GB stills H112 H111 % £’m £’m Change Volume (m. litres) 234.0 244.2 (4.2) ARP per litre (pence) 72.1p 71.7p 0.6 Revenue 168.8 175.1 (3.6) Brand contribution 74.2 73.4 1.1 Brand contribution margin 44.0% 41.9% 210 bps Adverse channel and Margin benefit from product mix continues favourable A&P phasin
Slide 8: International
International H112 H111 % £’m £’m Change Volume (m. litres) 19.4 16.7 16.2 ARP per litre (pence) 74.2p 77.8p (4.6) Revenue 14.4 13.0 10.8 Brand contribution 3.7 4.8 (22.9) Brand contribution margin 25.7% 36.9% (1120) bps Quarter 2 revenue Investment in the US growth of 18.1% growth impacting margin
Slide 9: Ireland
Ireland % Change H112 H111 % constant £’m £’m Change currency Volume (m. litres) 106.5 106.0 0.5 - ARP per litre (pence) 53.4p 58.5p (8.7) (7.5) Revenue 72.7 81.9 (11.2) (10.0) Brand contribution 22.1 28.4 (22.2) (21.1) Brand contribution margin 30.4% 34.7% (430) bps (430) bps ARP adversely affected
Slide 10: France
France % Change H112 H111 % constant £’m £’m Change currency Volume (m. litres) 142.3 149.1 (4.6) - ARP per litre (pence) 86.5p 78.7p 9.9 11.5 Revenue 123.1 117.4 4.9 6.4 Brand contribution 27.1 27.6 (1.8) (0.4) Brand contribution margin 22.0% 23.5% (150) bps (150) bps Q1 price increases driving Und
Slide 11: A&P and fixed costs
A&P and fixed costs H112 H111 % £’m £’m Change Total A&P spend 33.0 35.4 6.8 A&P as a % of revenue 5.3% 5.8% 50 bps Non-brand A&P 5.2 4.4 (18.2) Fixed supply chain 59.5 61.1 2.6 Selling costs 63.3 64.8 2.3 Overheads & other 49.8 53.6 7.1 TOTAL FIXED COSTS 177.8 183.9 3.3 Lower A&P due to phasing, St
Slide 12: EBIT to earnings
EBIT to earnings H112 H111 % £’m £’m Change EBIT 40.4 43.6 (7.3) Interest (15.6) (15.9) 1.9 Profit before tax 24.8 27.7 (10.5) Tax (6.1) (6.9) 11.6 Effective tax rate 24.6% 24.9% 30 bps Profit after tax 18.7 20.8 (10.1) Note: All numbers are on a pre-exceptional and other items basis unless stated o
Slide 13: Exceptional and other items
Exceptional and other items £’m Other fair value movements (2.4) GB 3.8 Corporate advisory fees 2.1 Ireland (2.8) Total (pre-tax) 0.7 Tax (0.7) Total (post-tax) -
Slide 14: Britvic Ireland pension funding agreement secured
Britvic Ireland pension funding agreement secured Key changes • Agreement reached with stakeholders to address the pension deficit and future pension provisions. • Introduction of an annual salary cap to the defined benefit (DB) scheme • DB scheme remains in place with a cap on salary • DC scheme ef
Slide 15: Cash flow
Cash flow H112 H111 % £’m £’m Change EBIT 40.4 43.6 (7.3) Depreciation & amortisation 23.3 24.8 (6.0) EBITDA 63.7 68.4 (6.9) Working capital (49.7) (71.4) 30.4 Capital expenditure (20.4) (23.9) 14.6 Pension contributions (10.8) (11.7) 7.7 Other (29.9) (25.6) (16.8) Underlying free cash flow (47.1) (
Slide 16: Medium-term and 2012 guidance remains unchanged
Medium-term and 2012 guidance remains unchanged Revenue Cost Capital Raw material inflation Volume-led growth in of mid-single digit GB £50-55m 2012 subdued France €12m 2012 PVO saving of Ireland €8m Minimum ARP growth £8m of 1% Other Progressive dividend Net A&P maintained at policy Innovation adds
Slide 17: Interims summary
Interims summary Strong management of the cost base Margin impacted by raw material inflation, recovering in H2 Improved FCF and reduction in net debt Dividend growth of 3.9%
Slide 18: Paul Moody, Chief Executive
Paul Moody Chief Executive langy S<sy 9 % ey 8 PO ea tunis
Slide 19: 2012 GB soft drinks market
2012 GB soft drinks market Take-home Carbonates Stills Take-home Q2 volume growth volume growth volume decline volume of 0.8% of 2.2% of 0.5% declined 0.6% Source” Nielsen take-home scantrack 14 April 2012.
Slide 20: 2012 Ireland soft drinks market
2012 Ireland soft drinks market Take-home Take-home Grocery Convenience value value decline market value market value declined 2.0% down 3.6% in Q2 increased grew 0.4% to 3.9% Source: Nielsen ROI scantrack 25 March 2012. Nielsen ROI licensed data March 2012
Slide 21: Restructuring programme underway in Ireland
Restructuring programme underway in Ireland Market conditions remain challenging • Structural changes have impacted the market and consumer base • Population has contracted • Property-based economic growth has eroded • Disposable income has been squeezed 2011 saw successive quarters of value decline
Slide 22: 2012 France soft drinks market
2012 France soft drinks market Take-home Take-home Syrups Fruit juice market volume market value market value market value growth growth growth growth of 1.0% of 6.3% Of 10.3% of 7.5% Source: IRI Census March 2012
Slide 23: 2012 innovation
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Slide 24: A strategy for international expansion
A strategy for international expansion International •Building the European footprint through the acquisition of assets •Franchising the Britvic-owned brands •Continued collaboration with PepsiCo
Slide 25: Agreement reached for Fruit Shoot distribution in Texas
Agreement reached for Fruit Shoot distribution in Texas • 3rd state distribution with PBC can now be confirmed as Texas • PBC now known as PepsiCo Americas Beverages (PAB) • PAB account for 75% of Pepsi beverages distribution in the US • Focus remains on convenience & gas channel
Slide 26: A growing US footprint
A growing US footprint • The manufacture of Fruit Shoot concentrate in Dublin is now fully operational • Manufacture has now commenced in the US • Changes the dynamic of revenue & margin from H2 • Fruit Shoot has grown its distribution access from 1 state to 8 in just over 12 months • Combined popul
Slide 27: Franchise momentum continues to build
Franchise momentum continues to build x Strong marketing & innovation programme for 2012 Soft drinks resilient but not immune Soft drinks resilient but not immune
Slide 28: Soft drinks resilient but not immune
Soft drinks resilient but not immune • Wettest April on record and the coldest in over 20 years • May weather has been poor to-date and the outlook is mixed • Nielsen data to 5 May shows the GB take-home soft drinks market down by over 12% in volume in the last 4 weeks • Britvic has grown share in t
Slide 29: H1 Summary
H1 Summary Franchise momentum continues to build x Strong marketing & innovation programme for 2012 Soft drinks resilient but not immune Soft drinks resilient but not immune
Slide 30: Q&A
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Slide 31: Appendix
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Slide 32: Business very well financed for the medium term
Business very well financed for the medium term £400M revolving credit facility (RCF) in place • Matures March 2016 • 6 out of 7 banks retained • Commitments scaled back • Reduced fees and margin £490m of USPP notes • £229m raised in Feb 2007 • £149m raised in Dec 2009 • £113m raised in Dec 2010 • S
Slide 33: GB on-the-go portfolio
GB on-the-go portfolio 2012 2005
Slide 34: GB soft drinks market volume
GB soft drinks market volume 190,000 2008/09 2009/10 2010/11 180,000 170,000 Volume Thousand Litres 160,000 150,000 140,000 130,000 120,000 110,000 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Source: Nielsen Scantrack April 2012: Take Home
Slide 35: France soft drinks market volume
France soft drinks market volume 1000000 2008/09 2009/10 2010/11 900000 Volume Thousand Litres 800000 700000 600000 500000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Source: IRI Census data (Total Suppliers - THG) MAT April 2012
Slide 36: Ireland soft drinks market volume
Ireland soft drinks market volume 2008/09 2009/10 2010/11 30,000.00 Volume Thousand Litres 27,500.00 25,000.00 22,500.00 20,000.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Source: Nielsen ROI grocery scantrack April 2012
Slide 37: Market positions
Market positions GB Take-Home £6.8bn Ireland Grocery €473m France Juice €1.2bn GB Pubs & Clubs £2.7bn Ireland Licensed €306m France Syrups €249mn Source: Nielsen GB take-home scantrack October 2011. CGA pubs and clubs August 2011. Nielsen ROI grocery scantrack October 2011. Nielsen ROI licensed Sept
Slide 38: A strategy for organic growth
A strategy for organic growth GB • Market volume growth • Innovation growing the topline • Driving on-the-go distribution • Improving ARP through revenue management France • Delivery of the €17M synergies by 2013 • Innovation growing the topline • Exploiting group brands and capability • Launching i
Slide 39: 2012 marketing programme
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Slide 40: HY 2012 debt structure
HY 2012 debt structure Facility Size (£m) Maturities Drawing Headroom (£m) (£m) Bank Loans 400.0 2016 35.1 364.9 US PP Issued 2007 228.5 2014, 2017, 2019 228.5 - US PP Issued 2009 149.7 2014, 2016, 2017, 2019 149.7 - USPP Issued 2010 113.0 2017, 2020, 2022 113.0 - (Cash)/Overdraft/Other ‐ - 8.1 (8.1