Britvic — Investor Day (April 2006)
54 slides from Britvic's investor day presentation, Apr 5, 2006
Slide 1: Britvic Educational Day 5 April 2006 - Introduction and Welcome
Britvic Educational Day 5 April 2006 Introduction and Welcome 1
Slide 2: Agenda for the day
Agenda for the day Rugby Factory Tour Market Performance 2005 2006 What we are doing Business Transformation Programme (BTP) Product Value Optimisation Programme (PVO) Tour of National Distribution Centre 2
Slide 3: Soft Drinks Category Report 2005
Soft Drinks Category Report 2005 3
Slide 4: Overall Market Performance
Overall Market Performance 4
Slide 5: Take Home
Take Home • Britvic and CCE continued to lead the market with over 50% of all value sales • Soft drinks was the largest FMCG category with the highest growth rate at 5% • Out of town led channel growth with value up 6% to over £2.4 billion 5
Slide 6: Take Home Sub-category performance
Take Home Sub-category performance 6
Slide 7: Pubs and Clubs
Pubs and Clubs Britvic retained its top UK supplier ranking: 44% value share 43% volume share Soft drinks growth out performed beer and spirits Independent pubs showed 8% value gains with the leased and tenanted sector up by 4% 7
Slide 8: Pubs and Clubs Sub-category performance
Pubs and Clubs Sub-category performance 8
Slide 9: "Better for you" - Key trend for 2005
“Better for you” - Key trend for 2005 Health and well-being trend extended to all sectors Carbonates growth driven by NAS variants Water remains a key growth driver Indulgent products showed huge growth New legislation focused on several areas On trade: smoking ban Take home: provision of nutritiona
Slide 10: Summary
Summary Stills market in good growth particularly adult and functional Trend towards “better for you” driven by dairy, and water resultant movement away from full sugar carbonates 10
Slide 11: Current trading
41 Current trading I BRITVIC soft drinks
Slide 12: Depressed Carbonates Market
Depressed Carbonates Market “Better for you” trend continues into March Rate of decline in sales of full sugar carbonates is stabilising Overall stills market continues to show growth 12
Slide 13: 24 Weeks trading to 20 March 2006
24 Weeks trading to 20 March 2006 A quieter time of the year for trading Branded revenue performance: Total down 3.4% Carbonates down 7.3% Stills up 1.3% Trading in the last 4 weeks influenced by: Easter falling 3 weeks later in 06 than 05 Unseasonably cold weather Recent structural changes in the c
Slide 14: First half 06 guidance
First half 06 guidance Net margins impacted by: A marginally negative pricing backdrop Lower volumes Increases in input and energy costs Cost saving initiatives offsetting some of the impact Expect EBIT margins to be 1 percentage point down on last year 14
Slide 15: Managements focus
Managements focus Driving revenue through: Core brand activity Successful new product launches Increasing average realised price Reducing costs – full year target of at least £10m Improving our cash position Reducing working capital 15
Slide 16: Summary
Summary Continuing to maintain a strong market share performance in many of our key categories Looking forward to a stronger second half – our most significant trading period Confident of delivering earnings within the range of market expectations On basis of anticipated recovery 16
Slide 17: Business Transformation
17 Business Transformation I BRITVIC soft drinks
Slide 18: Our systems were complicated, inefficient and very old
Our systems were complicated and very inefficient, they were also very old 18
Slide 19: Business Transformation Program - What we told you
Business Transformation Program – What we told you: 90% Paid For – 80% Done – Full Benefits Not Yet Realised Remove internal barrier to growth Enhance capability, functionality and efficiency Objective Alignment and simplification of processes One source of in depth accurate in depth information Fun
Slide 20: Our Vision is about …..
Our Vision is about ….. Redesigning Redesigning our our Providing Providing usus with with the the business to be simpler business to be simpler right information to right information to Delivering Delivering improved improved and and even even more more make make smarter smarter decisions decisions
Slide 21: Business Transformation Programme scope
Workstream Programme Stream Commercial Asset Management Commercial Asset Management Logistics Execution Logistics Execution Planning&&Production Planning Production Core SAP Stream Business Transformation Programme Finance Finance Procurement Procurement OrdertotoCash Cash Order Field Execution Fiel
Slide 22: The original Business Transformation Roadmap is nearly complete
The original Business Transformation Roadmap is nearly complete 2002 2003 2004 2005 2006 R10 Jan Jan 08: 08: NDC NDC R7 October October 06: 06: SNP SNP Phase Phase 22 R6 R5 R4 R3 R2 R1 Jan 2004 Common June 2003 design Set up April 2002 and mobilisation Issues analysis and kick off We are here 22
Slide 23: All these key process streams have been implemented
All these key process streams have been implemented Commercial Optimisation All Other Processes SIEBEL SAP Contact Centre Production (7 factories) Promotions Management Supply Planning Account Management Procurement Field Execution Demand Planning Order Management Logistics Warehousing (depots & NDC
Slide 24: Clear project success criteria
Clear project success criteria Savings At flotation TY £6m, 07 £9m, 08 £12m Now TY £10m, 07 £15m, 08 £18m Costs controlled within budget Growth – better sales capability and more effective innovation ARP – Greater visibility on Actual Realised Price through ability to model and evaluate promotion ef
Slide 25: Driving adoption and changing behaviours is critical
Driving adoption and changing behaviours is critical to our success Pre Cut-Over Cut-Over Post Cut-Over Business 22 Cut-Over & Contingency Plan As Usual (BAU) 33 Stabilisation Plan 44 Change Readiness Plan 55 Benefits Realisation Plan Operational Performance Contingency Period System Downtime •Conti
Slide 26: A lot has been achieved, but there are still areas to work on
A lot has been achieved, but there are still areas to work on Against this we have made strong progress - Logistics Execution, Planning and production - Cost reduction and Working Capital Improvements including procurement - Improved Innovation Process - KPI reporting framework We have the following
Slide 27: Commercial Optimisation
27 Commercial Optimisation soft drinks
Slide 28: The Commercial Vision for Business Transformation
The Commercial Vision for Business Transformation Increased Increased agility agility and and ability ability to to get get to to market market CULTURE faster faster Increased Increased Culture Culture of of TECHNOLOGY BEHAVIOURS focus focus on on continuous continuous total total value value learni
Slide 29: Commercial Stream Scope
Commercial Stream Scope Account Management 1 Account Management 2 Optimisation Promotions 1 Processes Enabled: Processes Enabled: Processes Enabled: • New Business Development • Customer New • Customer Contact Centre (R3) • Account Opening & Credit Product Introduction • Asset Compliance (R6) Checki
Slide 30: Promotional Effectiveness
Promotional Effectiveness 30
Slide 31: Promotions are at the heart of the soft drinks business
Promotions are at the heart of the soft drinks business % Volume Sold on Promotion 38.6 Total Soft Drinks 43.5 53.8 Fruit Carbs 60.1 51.6 Cola 57 38.2 Adult 56.7 37.2 Dairy 46.6 40.5 Juice Drinks 45.3 36.5 Squash 43.8 18.4 Smoothies 37.9 31.9 Pure Juice 36.5 36.1 Functional 36.2 Water 25 MAT TO WE 2
Slide 32: The opportunity is significant, the biggest challenge is cultural
The opportunity is significant, the biggest challenge in achieving them is cultural Opportunities Improved ARP for the same volume is the biggest prize Improved Return on Revenue Investment Improved forecasting Reduction in non value adding data entry, manipulation and admin Achieved through Auto ca
Slide 33: Logistics Execution, Planning and Production
Logistics Execution, Planning and Production 33
Slide 34: Improvements in tools and processes drive the savings
Improvements in tools and processes drive the savings Opportunities Improved Forecast accuracy Reduction of full good stock (& postponing Capital investment) Reduced movement of stock Reduction in wastage Achieved through Improved sales and operation planning Delivery of end to end supply network pl
Slide 35: Cost Reduction and Working Capital Improvements
Cost Reduction and Working Capital Improvements 35
Slide 36: Key cost reduction areas
Key cost reduction areas Total centralisation and automation of our procurement processes onto EBP (SAP) has delivered significant savings in indirect procurement Reduced number of suppliers Visibility of all transactions Better terms from key contracts Headcount reduction across the business Reduct
Slide 37: SRM - Enterprise Buyer screenshot
2 SRM - Enterprise Buyer - Microsoft Internet Explorer provided by Britvic Soft Drinks File Edit View Favorites Tools Help ay Ox Of) AG Dawn Yervone Que © 2 SEBI0 3 Address | 2) http://brsapprditplt .britvic.bsddrinks net :61 /scripts/wgate/bbpstart?1b61013} = mySAP SRM Home | Help | Settings | Supp
Slide 38: Working capital reduction areas
Working capital reduction areas Better visibility of spend Reduction in number of suppliers Improved terms for supplier payments From bespoke sales ledger to fully integrated Control of customer prices Better visibility of terms Fully integrated Planning and Production process Reduced stock cover Re
Slide 39: Innovation Process
39 Innovation Process I BRITVIC soft drinks
Slide 40: We are Focusing on Five Areas
We are Focusing on Five Areas Convenience Changing Families Changing Roles Time Elaboration Indulgence Better for you 40
Slide 41: Finalised Stage-Gate Process
Finalised Stage-Gate Process Decision Getting Launching & Stages Generating Refining Finalising Commercialising Ready Evaluating Key Prioritised Preliminary Viable 85% Finished 99% Finished Product Ready to Product in Themes/ Concepts Concepts Concepts Concept, Market Launch Market Outputs Opportuni
Slide 42: New Process Achievements
New Process Achievements Reduced Time to Market Took a 1/3rd of the time out of the process Better Decision-making Objective decision criteria Improved Execution Increased briefing timescales + improved tools Better Resource Allocation Introduction of aggregate project plan Improved Efficiency Singl
Slide 43: Numerous examples demonstrate the benefit of the new system
There are numerous examples which demonstrate the benefit of the new system 43
Slide 44: KPI Reporting Framework
44 KPI Reporting Framework I BRITVIC soft drinks
Slide 45: Value Driver Framework and KPI Framework
Value Driver Framework provided direction to construct the KPI Framework and the supporting suite of management reports KPI Framework Corporate Level KPI Management key performance indicators based upon the value driver framework, Dashboards Value Drivers aligned to the key business (snr mngt) proce
Slide 46: Summary
46 Summary I BRITVIC soft drinks
Slide 47: Our Vision is about …..
Our Vision is about ….. Redesigning Redesigning our our Providing Providing usus with with the the business to be simpler business to be simpler right information to right information to Delivering Delivering improved improved and and even even more more make make smarter smarter decisions decisions
Slide 48: PVO Update
PVO Update wo BRITVIC soft drinks
Slide 49: Product Value Optimisation - Definition
Product Value Optimisation - Definition Jan 07 Systematic approach to optimising the unit cost of a product versus its perceived consumer value Involves product ingredients and packaging Juice content Sweetener systems Pack design (weight, colours on label etc.) Helps mitigate margin pressure over n
Slide 50: PVO Update - £2m delivered this year
PVO Update - £2m delivered this year Vertical Integration Savings £0.5m Norwich/Rugby bottle blowing Productivity Savings £1.5m Sugar reduction Flavour Simplification Primary & Secondary Packaging Total £2.0m 50
Slide 51: PVO Update - 2006-7 further savings opportunities
PVO Update - 2006-7 provides full year and additional savings opportunities of at least a further £2m Vertical Integration Savings 05-06 Full year Widford L5 bottle blowing Project Big Foot Total >£4.0m per annum 51
Slide 52: PVO Update - Other areas under consideration
PVO Update - Other areas under consideration Further Vertical Integration; Moving final bottle blowing performed externally in-house: Norwich Line 7 – Fruit Shoot Norwich Line 11 – 1 Litre CSD Productivity Savings; Continued flavour simplification, sugar reduction & packaging savings 52
Slide 53: PVO Update - Energy Saving Opportunities
PVO Update - Energy Saving Opportunities • Background • Total group energy cost has increased by £3 - 4m • Continued pressure on energy costs expected • Focused activity on-going to identify energy reduction opportunities e.g. Saving Capital Replace boiler plant £400k £700k Heat recovery £150K £200k
Slide 54: Britvic Educational Day 5 April 2006 Summary
Britvic Educational Day 5 April 2006 Summary 54