Britvic — Non-Deal Roadshow (December 2007)
38 slides from Britvic's roadshow presentation, December 2007
Slide 1: Investor Roadshow
Investor Roadshow December 2007
Slide 2: Agenda
Agenda • About Britvic • Market Dynamics • Strategy • Financial Headlines • Investment Highlights
Slide 3: Overview
Overview • Britvic is one of the two leading branded soft drinks business in Great Britain and Ireland: • Broad portfolio of market leading brands with rich heritage and high brand recognition • #1 in stills (1), the faster growing part of the market (1) • #2 in carbonates (1) • #1 in Licensed On-Tr
Slide 4: Branded Soft Drinks – An Evolving Portfolio
Branded Soft Drinks – An Evolving Portfolio Britvic has a leading portfolio of owned brands in Great Britain, including: # 1 stills brand in the take-home market (1) # 1 adult soft drinks brand (1) # 3 soft drinks brand in take home by volume (1) # 10th UK grocery brand by value (2) Launched summer
Slide 5: Successful Long Term Relationship with PepsiCo
Successful Long Term Relationship with PepsiCo Volume Growth (UK) • Exclusive rights to PepsiCo carbonated products 603 700 • Pepsi – #2 global soft drinks brand (1) 3.5x Volume (million litres) 600 500 • 7Up – #2 global lemon / lime brand (1) 400 300 • PepsiCo new carbonate pipeline 172 200 • Britv
Slide 6: Soft Drinks Market Volume
Volume Thousand Litres W E 08 .1 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 W 0 .0 E 6 29 .1 W 0 .0 E 6 19 .1 W 1 .0 E 6 10 .1 W 2 .0 E 6 31 .1 W 2 .0 E 6 21 .0 W 1 .0 E Soft Drinks Market Volume 11 7 .0 W 2 .0 E 7 04 .0 W 3 Source: AC Nielsen Scan Track - Take Home to 29.09.2007
Slide 7: Relative Size of Categories and Growth
Relative Size of Categories and Growth Cola -0.8% -0.8% -0.8% Lemonade -5.3% -8.8% -7.0% Fruit Carbs -8.1% -9.2% -8.8% Diet/ Low Cal Carbs Functional +17.7% Regular/ Full Sugar Non Fruit Carbs +6.4% -2.9% -1.0% Water -5.6% Pure Juice -4.0% Squash +2.6% -12.1% -2.5% Juice Drinks -7.3% -0.9% -2.4% Mix
Slide 8: Strategy focused on delivering shareholder value
Strategy focused on delivering shareholder value
Slide 9: FY07 Innovation
FY07 Innovation Aseptic line installed Planned innovation delivered on time
Slide 10: Driving Profitable Revenue: Pepsi & 7UP
Driving Profitable Revenue : Pepsi & 7UP • Further volume market share gains in H2 consolidating the strong start to the year • An increase of 1.6%pts on last year • Redesign of brand Pepsi capitalising on the trend for personal customisation • Supported by strong promotional levels • Pepsi Max cont
Slide 11: Driving profitable revenue: Robinsons Smooth Juice and Fruit Shoot 100% Juice
Driving profitable revenue: Robinsons Smooth Juice and Fruit Shoot 100% Juice • Performed in line with management expectations given the poor weather • Both products play completely to the ‘natural agenda’ with no artificials • Robinsons Smooth Juice: • Rapid distribution build • £2.6m marketing inv
Slide 12: Britvic Ireland – Infrastructure and brands
Britvic Ireland – Infrastructure and brands • #2 cola brand with c.8% share • Established soft drinks production infrastructure • #1 lemon / lime brand with c. 77% share • Ballygowan water source in the West of Ireland • #1 fruit flavoured brand (orange) with c. 37% share Carbs • Logistics centre an
Slide 13: Britvic Ireland – transition and synergies
Britvic Ireland – transition and synergies Transition • Completion 29th August 2007 • Retention of functional management teams successfully achieved • Transitional Services in place • Britvic International (Ireland) integration on target for 31st Jan • Group Business Support Structure and Operating
Slide 14: Britvic Ireland – Exciting opportunities for J2O
Britvic Ireland – Exciting opportunities for J2O • Real opportunities to grow and develop the adult soft drink category • Three flavours launched in ROI Licensed Trade and Grocery Foodservice in Oct 07 • Apple & Mango, Orange & Cranberry, Orange & Passion Fruit • 275ml Glass • Distribution achieved
Slide 15: Financial Headlines
Financial Headlines GB & Impact of Britvic Intl FY07 Britvic Ireland Group FY07 FY06 % Change £’m £’m £’m £’m Branded Revenue 702.5 13.8 716.3 677.7 5.7 EBIT 79.2 0.8 80.0 73.7 8.5 EBIT Margin 11.3% 5.8% 11.2% 10.9% 30bpts Profit after tax 44.0 - 44.0 39.6 11.1 Free cash flow 75.1 (167.7) (92.6) 48.
Slide 16: Cost and Cash Management
Cost and Cash Management • Focus on costs as well as top line • Delivered an incremental £5m of cost savings as previously guided through our Business Transformation Programme: • £2m of anticipated savings in FY08 (£1m brought forward into FY07) • Total of £18m annualised costs savings on track for
Slide 17: Financial Summary
Financial Summary • Top line growth continued since the year end • We have a continuous focus on innovation • Two major launches in FY08 • Further smaller scale innovation launches • We have demonstrated the potential to add value through M&A • €14m synergies will be delivered through our Ireland ac
Slide 18: Investment Highlights
Investment Highlights • Strong Market Positions – a Leading Portfolio of Soft Drinks Brands in Great Britain and Ireland • Track Record of New Brand and Product Development • Growth through international and domestic M&A opportunities • Great Long-term relationships with PepsiCo • Strong Industry Dy
Slide 19: Supplementary Information
Supplementary Information All supplementary information pertains to the GB business and soft drinks market unless stated otherwise
Slide 20: Leading GB Carbonates Brands
Leading GB Carbonates Brands • # 2 cola in licensed on-trade (2) • # 2 branded cola in take-home (1) • # 2 global soft drinks brand (3) • # 3 fruit flavoured carbonate brand by volume in GB take- home (1) • # 2 global lemon / lime brand (3) • Launched into GB during 2006 • National rollout in 2008 •
Slide 21: Leading GB Stills Brands
Leading GB Stills Brands • # 1 pure juice brand in the licensed • # 1 stills brand in the take-home on-trade (2) market (1) • # 3 soft drinks brand in take home by volume (1) • # 10th largest UK grocery brand by value (3) • Drench rebranded and relaunched in 2007 • # 1 ready-to-drink kids’ stills br
Slide 22: Leading Irish Brands
Leading Irish Brands BRITVIC
Slide 23: Carbonates
Carbonates • Sub-sectors include cola, flavoured carbonates, lemonade and functional (sports, energy and stimulant) drinks • Number 2 in carbonates in UK Licensed on-trade 39% Take home 61% • Over 60% channelled though Take-Home market • Take-Home market dominated by CCE (52%) • GSK #2 (13%) – Lucoz
Slide 24: Stills
Stills • Sub-sectors include squash, water, fruit drinks, pure juice and mixers • Number 1 in stills in UK • Over 80% channelled through Take-Home market • Take-Home market fragmented Take home 81% Licensed on-trade 19% • Danone #1 (10%) – (Evian, Volvic, Badoit bottled waters) • Britvic #2 (10%) •
Slide 25: Channels to Market
Channels to Market 3 main channels to market: • Take Home (£6.0bn) (1) • Customers include large grocery retailers, (primarily Tesco, J Sainsbury, Asda, Wm Morrison), high street stores (for example, WHSmith, Woolworths), ‘‘impulse’’ channel retailers (convenience stores, garage forecourt sales and
Slide 26: Take home: stills segment larger and growing faster
Take home: stills segment larger and growing faster 05-07 YOY CAGR Take-Home by Retail Value Sales Stills 7.0 % 2.2 % (£6.0 billion) Pure Juice 9.8 % 7.0 % Water 3.1 % (3.3)% Non Fruit Fruit Drinks 5.7 % (0.1)% Flavoured Lemonade carbs 4% 2% Pure Juice Squash (0.5)% (4.7)% Functional 19% Dairy 1.8 %
Slide 27: On-trade: carbonates segment larger, stills growing faster
On-trade: carbonates segment larger, stills growing faster 05-07 YOY CAGR Licensed On-Trade by Retail Value Sales Stills 4.9 % 2.0 % (£2.4 billion) Pure Juice / 2.8 % 0.4 % Fruit Drinks Lemonade Flavoured Pure Juices/ Mixers 2.1 % 0.5 % 19% Carbs 7% Fruit Drinks 16% Squash 8.9 % 4.0 % Water 12.8 % 2
Slide 28: Strong Market Positions
Strong Market Positions Stills (£3.5bn) Carbonates (£2.5bn) Take-Home (£6.0bn) Danone, 10% GSK, 13% GSK, 8% Britvic, 11% Britvic, 10% Britvic, 12% All Other, Danone, Tropicana, 44% 6% 8% Tropicana, All Other, CCE, 52% Red Bull, 5% 57% CCE, 7% 7% Barrs, 4% GSK, 4% Innocent, All Other, CCE, 26% 4% 12%
Slide 29: Well-Invested Infrastructure, Strong Asset Base
Well-Invested Infrastructure, Strong Asset Base • £113 million invested in supply chain over last 5 years • £56 million additional investment in systems and process design over last 5 years • 7 factories • National Distribution Centre • Strong customer service focus
Slide 30: Financial Snapshot
Financial Snapshot Revenue by Segment (£m) Brand Contribution (£m) (1) 23.6 25.7 5.7 8.3 24.7 23.5 8.2 19.6 5.3 7.0 152.8 143.3 130.1 136.4 376.2 356.9 342.6 332.5 149.5 367.6 148.1 147.5 152.0 154.7 309.5 314.3 321.7 334.3 126.7 275.7 FY03 FY04 FY05 FY06 FY07 FY03 FY04 FY05 FY06 FY07 Stills Carbona
Slide 31: Segment Performance
Segment Performance Carbonates Stills International FY 07 FY 06 % Change FY 07 FY 06 % Change FY 07 FY 06 % Change £’m £’m £’m £’m £’m £’m Volume (million liters) 865.3 848.3 2.0 463.4 446.5 3.8 37.7 35.8 5.3 ARP per liter 39.6p 39.2p 1.0 72.1p 72.1p 0.0 68.0p 65.6p 3.7 Revenue 342.6 332.5 3.0 334.3
Slide 32: Summary FY07 – EBIT
Summary FY 07 – EBIT FY07 FY06 % Change £’m £’m Branded Volume (million litres) 1,366.4 1,330.6 2.7 Average Realised Price (ARP) per litre 51.4 50.9 1.0 Branded Revenue 702.5 677.7 3.7 Brand Contribution 299.4 289.1 3.6 Non brand A&P (7.0) (6.1) (14.8) Fixed Supply Chain (66.2) (68.0) 2.6 Selling Co
Slide 33: Overheads and other costs
Overheads and other costs FY07 FY06 % Change £’m £’m Non Brand A&P (7.0) (6.1) (14.8) Total A&P spend (46.7) (44.6) (4.7) A&P as % Net Revenue 6.6% 6.6% - Fixed Supply Chain (66.2) (68.0) 2.6 Selling Costs (85.7) (86.0) 0.3 Overheads & Other (61.3) (55.3) (10.8) Total (220.2) (215.4) (2.2) Note: all
Slide 34: EBIT to Earnings
EBIT to Earnings FY07 FY06 % Change £’m £’m EBIT 80.0 73.7 8.5 Interest (18.7) (17.8) (5.1) Profit before tax 61.3 55.9 9.7 Tax (17.3) (16.3) (6.1) Tax rate 28.2% 29.2% Profit after tax 44.0 39.6 11.1 Note: all numbers are before exceptional costs
Slide 35: Improving Cash Position and Reducing Working Capital
Improving Cash Position and Reducing Working Capital FY07 FY06 % Change £’m £’m Operating Profit pre exceptionals 80.0 73.7 8.5 Depreciation 46.3 47.3 (2.1) EBITDA 126.3 121.0 4.4 Working Capital 11.2 12.3 (8.9) Capital Expenditure (18.7) (33.0) 43.3 Pension contribution (10.0) (30.0) 66.7 Acquisiti
Slide 36: Guidance FY08
Guidance FY08 • FY07 poor summer weather : • Estimated £(5)m impact at EBIT level for FY07 (15m litre in stills; 10m litre in carbonates) • Strong management action to reduce costs in response– expect to reinstate c£5m around A&P spend, vacancies etc • Brand Contribution margin: • £18m of planned BT
Slide 37: Britvic Ireland guidance and ongoing disclosure
Britvic Ireland guidance and ongoing disclosure • Britvic Ireland to be disclosed in total at revenue and brand contribution level from Interims 08 • 3-yr historic CCSD revenue of CAGR of 2.5% • A&P spend - traditionally around 7% as a proportion of soft drinks revenue (total CCSD) • Similar seasona
Slide 38: Britvic Ireland guidance and ongoing disclosure
Britvic Ireland guidance and ongoing disclosure • On an IFRS basis, for the year ended 27 February 2007, CCSD had net turnover of €269.9m and EBITDA of €24.7m, EBIT of €15.0m • Britvic Ireland to be disclosed in total at revenue and brand contribution level from Interims 08 • 3-yr historic CCSD reve