Britvic — FY2007 Earnings Presentation
34 slides from Britvic's earnings presentation, Nov 29, 2007
Slide 1: Preliminary Results
Preliminary Results Presentation 29 November 2007
Slide 2: John Gibney, Finance Director
John Gibney Finance Director
Slide 3: 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 4: 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 5: Stills
Stills FY07 FY06 % Change £’m £’m Volume (million litres) 463.4 446.5 3.8 ARP per litre 72.1p 72.1p 0.0 Revenue 334.3 321.7 3.9 Brand Contribution 154.7 152.0 1.8 Brand Contribution Margin 46.3% 47.2% (90)bps Direct product costs increased by 0.6%
Slide 6: Carbonates
Carbonates FY07 FY06 % Change £’m £’m Volume (million litres) 865.3 848.3 2.0 ARP per litre 39.6p 39.2p 1.0 Revenue 342.6 332.5 3.0 Brand Contribution 136.4 130.1 4.8 Brand Contribution Margin 39.8% 39.1% 70bpts Direct product costs increased by 0.9%
Slide 7: International
International FY07 FY06 % Change £’m £’m Volume (million litres) 37.7 35.8 5.3 ARP per litre 68.0p 65.6p 3.7 Revenue 25.7 23.5 9.4 Brand Contribution 8.3 7.0 18.6 Brand Contribution Margin 32.3% 29.8% 250bpts Direct product costs increased by 4.9%
Slide 8: 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 9: 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 10: Exceptional Items
Exceptional Items FY07 £’m Cash items Restructuring costs 8.1 Acquisition of Britvic Ireland 1.2 Share items Transitional Share Awards 3.1 Non cash items Profit on sale of Tamworth Depot (3.4) Pension adjustment re distribution outsourcing (5.6) Returnable Bottle impairment 2.1 Wind up of IHG share
Slide 11: 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 12: Guidance FY08
Guidance FY08 • FY07 poor summer weather: • Estimated £(6)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 BTP
Slide 13: Summary
Summary • Strong top line growth from increases in both volume and ARP despite difficult trading conditions in H2 • Timely management action to reduce costs in response to poor summer weather • EBIT margin up 40bps* • Strong underlying free cash flow • Full year dividend of 11.0 pence up 10.0% * Bef
Slide 14: Paul Moody, Chief Executive
Paul Moody Chief Executive
Slide 15: Agenda
Agenda • Market • Current trading • Strategy • Driving profitable revenue growth • Innovation • Driving efficiency • Expansion into Europe – Britvic Ireland
Slide 16: 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 17: 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 18: Stills Market Volume
Volume Thousand Litres W E 22 65,000 75,000 85,000 95,000 105,000 115,000 125,000 W .0 E 4. 29 0 7 W .0 4 E . 06 0 7 W . 05 E .0 13 7 W . 05 E . 20 0 7 W . 05 E .0 27 7 . Stills Market Volume W 05 E . 03 0 7 W .0 6 E .0 10 7 W .0 6 E . 17 0 7 W .0 6 E . 24 0 7 W . 0 E 6. 07 01 Source: AC Nielsen Sca
Slide 19: Strategy focused on delivering shareholder value
Strategy focused on delivering shareholder value
Slide 20: 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 21: Driving Profitable Revenue: Robinsons
Driving Profitable Revenue : Robinsons • Robinsons squash – consolidating its number one position, despite difficult trading conditions for squash • New large pack production facilities driving volume share • Launch of re-designed ‘no artificial colours and flavours’ family squash range: • Enhances
Slide 22: Driving Profitable Revenue: J2O
Driving Profitable Revenue : J20 • J20 continues to lead and drive growth in its category • 7% year-on-year growth • Strongest ever Christmas • Successful ‘if H20 were J20’ campaign • FY08 plans: • Continued communications with consumers in key periods • Expansion into more sociable occasions with n
Slide 23: Driving Profitable Revenue: Water
Driving Profitable Revenue : Water • Fruit Shoot H2O • Consolidates position as number one kids water brand • Strong distribution at 77% • Excellent repeat rates at 41% • 50% of buyers are new to the Fruit Shoot brand • Drench – a focus on take home • Successfully re-launched in Convenience and Impu
Slide 24: Driving Profitable Revenue: Innovation
Driving Profitable Revenue: Innovation Aseptic line installed Planned innovation delivered on time
Slide 25: 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 26: Driving Profitable Revenue: Britvic
Driving Profitable Revenue : Britvic • Britvic mixers and juices: • Continue to strengthen their overall position • Number one brand in juices - 31% market share • Level with the main competitor in the mixers category • Key initiatives driving performance: • Launch in non-returnable bottles (transis
Slide 27: Driving Profitable Revenue: International
Driving Profitable Revenue: International • Fruit Shoot in the Netherlands continues to perform strongly • Volumes up 38% despite the poor summer weather • New TV campaign ‘GO EXPLORE’ on air for 12 weeks • Brand awareness up from 29% to 39% following campaign • Robinsons High Juice in Denmark and S
Slide 28: Driving efficiency
Driving efficiency • 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 end of FY08 • Delivered a further £2m of PV
Slide 29: Britvic Ireland – Infrastructure and brands
Britvic Ireland – Infrastructure and brands • #2 cola brand with c.8% share • 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 and Wholesale
Slide 30: 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 31: 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 • Strong growth in distr
Slide 32: Summary – well positioned for the year ahead
Summary – well positioned for the year ahead • 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 deliv
Slide 33: Supplementary slides
Supplementary slides BRITVIC
Slide 34: 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, EBITDA of €24.7m, and EBIT of €15.0m • Britvic Ireland to be disclosed in total at revenue and brand contribution level from Interims 08 • 3-yr historic CCSD rev