A.g. Barr P.l.c. · LSE:BAG
A.g. Barr P.l.c — H1 2020/21 Earnings Presentation
37 slides from A.g. Barr P.l.c's earnings presentation, September 2020
Slide 1: AG Barr plc Interim Results
AG Barr plc INTERIM RESULTS 26 weeks ended 25 July 2020 1
Slide 2: Welcome and introduction
Roger White Welcome and introduction 2
Slide 3: Contents
Contents ○ Introduction ○ Market update ○ Business update ○ Financial review ○ Summary & outlook ○ Questions Roger White Stuart Lorimer Chief Executive Finance Director 3
Slide 4: Overview: Performance headlines
Overview Financial summary Performance headlines ○ Barr Soft Drinks : Value share of total UK soft drinks market up 1.2% ○ Funkin : Sales decline of 34% driven by very challenging hospitality sector - within this retail and on-line sales grew by over 170% ○ Pre-tax exceptional charge of £11.5m relat
Slide 5: Market update
Market update AGBarr Barr BUILDING GREAT BRANDS
Slide 6: Total UK soft drinks market
Total UK soft drinks market Total UK soft drinks value Total UK soft drinks volume ▲ 0.2% ▲ 0.6% Carbonates value Carbonates volume ▲ 7.3% ▲ 8.6% Stills value Stills volume ▼ 7.8% ▼ 6.5% 6 Source: IRI Marketplace 26 weeks to 26/07/20
Slide 7: Total UK soft drinks market - sub categories
Total UK soft drinks market - sub categories Source: IRI Marketplace 26 weeks to 26/07/20 7
Slide 8: Total UK soft drinks market - retail channels
Total UK soft drinks market - retail channels Source: IRI Marketplace 26 weeks to 26/07/20 8
Slide 9: Total UK soft drinks market - formats
Total UK soft drinks market - formats Source: IRI Marketplace 26 weeks to 26/07/20 9
Slide 10: Total UK soft drinks market
Total UK soft drinks market Source: IRI Marketplace 26 weeks to 26/07/20 10
Slide 11: Barr Soft Drinks market performance
Barr Soft Drinks market performance Value share performance to 26 July 2020 52 weeks 26 weeks 13 weeks 4 weeks AG Barr year on year value share movement within total UK soft drinks market ▼3.0% ▲1.2% ▲ 3.2% ▲5.3% Barr Soft Drinks value share of total soft drinks Total UK Scotland England & Wales 3.1
Slide 12: Cocktail market dynamics
Cocktail market dynamics On-trade Value of cocktails in GB UK outlets stocking cocktails £624m 43.5k ▲ 6.4% ▲ 3.7% Off-trade Consuming cocktails at home Growth in ready to drink cocktails in cans 5.2m consumers ▲ 19% versus 3.8m pre lockdown Value of ready to drink cocktails in UK £344m Sources : CG
Slide 13: Group brand performance
Group brand performance Market measures IRN-BRU value Rubicon value Barr Flavours Rubicon value Funkin new share of share of fruit value share of share of shoppers in last OFCs drinks total carbs flavoured water 12 weeks ▲ 0.6% ▲ 3.4% ▲ 25.3% ▲ 16.3% ▲252K Revenue Funkin take IRN-BRU Rubicon Barr Fla
Slide 14: Business update
Roger White Business update 14
Slide 15: Business fundamentals
Business fundamentals OUR STRATEGIC PRIORITIES: a \¢ te) On We 138 i ee Connecting Building Building Driving with consumers | brands trust efficiency OUR BUSINESS MODEL: Make —» Move —» Market —> Sell —~ Behave Create responsibly value OUR RESPONSIBILITY COMMITMENTS: EY OW CF ‘ eS es ee Act with Res
Slide 16: COVID-19
COVID-19 Swift and pragmatic response ○ Successfully introduced range of enhanced safety and hygiene measures across all operations ○ Swift action taken to conserve cash and underpin financial stability ○ Maintained continuity of production and continued to deliver high levels of service and quality
Slide 17: COVID-19: Channel impact
COVID-19 : Channel impact 17 Source: AG Barr revenue
Slide 18: COVID-19: Format and price mix impact
COVID-19 : Format and price mix impact Average retail Index H1 20/21 vs. price per litre H1 19/20 Price per litre index 99 500ml IRN-BRU PET single £2.14 Volume index 83 Price per litre index 112 2L IRN-BRU PET single £0.69 Volume index 101 Price per litre index 109 330ml IRN-BRU can multipack £1.01
Slide 19: Connecting with consumers - H1 highlights
Connecting with consumers - H1 highlights IRN-BRU TV, social and consumer NEW Rubicon marketing engagement campaign during and national TV campaign lockdown 19
Slide 20: Building brands - H1 highlights
Building brands - H1 highlights IRN-BRU Energy outdoor marketing and Funkin Nitro Cocktails on TV for the social media campaign first time in partnership with Sky 20
Slide 21: Driving efficiency - H1 highlights
Driving efficiency - H1 highlights Business re-engineering Technology and programme system improvements Phase 1 complete ○ online ordering project completed for ○ portfolio simplification wholesale customers - now turning to ○ brand development prioritisation Barr Direct channel ○ Commercial function r
Slide 22: Building trust - H1 highlights
Building trust - H1 highlights Playing our part in a time of crisis - over 250,000 Continued climate change bottles donated focus ✓ Increased use of recycled PET - Rubicon Spring now in 50% rPET bottles ✓ Strong RECYCLE ME message now going on all PET bottle caps ✓ Continuing to work in partnership
Slide 23: DRS in Scotland
DRS in Scotland ○ Go-live date now July 2022 ○ Legislation places obligations on both individual producers and retailers ○ Producers can appoint not-for-profit Scheme Administrator to collectively discharge obligations ○ Continuing to work collaboratively to facilitate Scheme Administrator applicatio
Slide 24: Financial review
Stuart Lorimer Financial review 24
Slide 25: H1 2020/21 profit overview
21 profit overview 20.0 15.0 0.4 13.5 13.9 10.0 = Gt 5.0 soe wot? on™ sor® & o® ‘ 46 ee Ne roi?" ge wy Fs eo eon AGBarr BUILDING GREAT BRANDS 25
Slide 26: Financial scorecard
Financial scorecard H1 20/21 v H1 19/20 % v H1 19/20 Case volumes (million cases) 24.0 (1.7) (6.4) % Net revenue (£m) 113.2 (9.3) (7.6)% Profit before tax and exceptionals (£m) 16.6 2.7 19.4% Exceptional items before tax (£m) (11.5) 11.1 Statutory profit before tax (£m) 5.1 (8.4) (62.2)% Gross margin
Slide 27: Gross margin (%)
Gross margin (%) Carbonates Strong performance in a challenging ▲ ▼ ▼ ▲ environment. Pricing gains across core 0.9pp 2.3pp 6.4pp 1.3pp brands, particularly IRN-BRU, more than offset negative format mix. Stills & water Reduction in ‘on the go’ consumption disproportionately impacts Rubicon stills. On
Slide 28: Commodities and currencies
Commodities and currencies Commodities Largely stable costs across all commodities Cover secured in full for current financial year and extending well into 2021 for several key categories Focus is on mitigating Brexit disruption and ensuring supply security Full year outlook anticipates overall stabl
Slide 29: Operating costs and margin
Operating costs and margin Significant cost savings : ○ Logistics related - driven by volume ○ Discretionary spend controls including headcount and travel & expenses ○ Reduced overall marketing costs while maintaining core brand investment in IRN-BRU and Rubicon 29
Slide 30: Exceptional costs: £11.5m
Exceptional costs : £11.5m Business re-engineering programme - cash Total FY 19/20 H1 20/21 H2 20/21 programme Portfolio & RTM : simplification and rationalisation £1.1m - - £1.1m Reorganisation £0.7m £1.5m £1.5 - £2m £3.7 - £4.2m Total spend * £1.8m £1.5m £1.5 - £2m £4.8 - £5.3m * Excludes £1.8m one
Slide 31: Cash and cash flow
Cash and cash flow Strong cash management in a challenging external environment 31
Slide 32: Balance sheet: Key ratios
Balance sheet : Key ratios Strong funding platform Net cash (£m) Continued cash generation with banking facilities available to 2022 (£60m) and 2024 (£20m) CCFF funding accessible until March 2021 Well invested asset base Net assets (£m) Impact of Strathmore impairment more than offset by increase i
Slide 33: Full year financial guidance
F20 Full year financial guidance Current scenario planning and underlying assumptions continue to indicate Revenue full year revenue c.12-15% below the prior year recognising loss of the Rockstar franchise Flat gross margin in the full year however decline in operating margin from Margins operational
Slide 34: Summary and outlook
Roger White Summary and outlook 34
Slide 35: H1 summary
H1 summary ○ Given the difficult prevailing circumstances the business has responded well to the challenges faced - safe operations; supporting customers; financially secure ○ Creditable financial performance in the first 6 months of trading, notwithstanding the relatively weaker comparatives of the prio
Slide 36: Looking forward...
Looking forward... ○ Confident we will weather this storm ○ Core soft drinks brands in good health and expected to grow through rate of sale, distribution and innovation ○ ”Reset” activity across the business to right-size our operating/overhead base and to drive focus on margin improvement ○ Funkin
Slide 37: Questions
AGBarr BUILDING GREAT BRANDS 37