Britvic — Investor Day (2012)
86 slides from Britvic's investor day presentation, 2012
Slide 1: Investor Seminar 2012
Investor Seminar 2012 Britvic plc
Slide 2: Agenda
Agenda • Financial update John Gibney 30mins • Markets overview Simon Stewart 30mins • Break 15mins • GB marketing & innovation Simon Litherland 60mins • International brand development Paul Moody 30mins
Slide 3: Financial update
John Gibney Group Finance Director – Britvic plc Financial update
Slide 4: Agenda
Agenda • Reiterate guidance • Raw materials– a secure platform for 2012 • Cash priorities - invest for growth, shareholder return and pay down debt • Secure medium-term funding platform O
Slide 5: Guidance - unchanged
Guidance - unchanged Revenue Cost Capital Volume 2-3%, less in Raw material inflation GB £50-55m 2012 of mid-single digit 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 1-2% 5% of revenue to the top line
Slide 6: Revenue Guidance - medium term versus near term
Revenue Guidance - medium term versus near term Medium Term Near Term Near Term GB GB Ireland & France Volume 2-3% Volume 0-1% Ireland Continuation of Minimum ARP growth Minimum underlying recent trends of 1% ARP growth of 2% France Innovation adds 1-2% Innovation adds 1-2% 2012 strong price to the
Slide 7: Guidance
Guidance Revenue Cost Capital Volume 2-3%, less in Raw material inflation GB £50-55m 2012 of mid-single digit 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 1-2% 5% of revenue to the top line Improving F
Slide 8: Raw materials – a secure platform for 2012
Raw materials – a secure platform for 2012 • All key raw materials now hedged for fiscal 2012 • Fixed contracts to supply, not financial derivatives • Current year guidance remains unchanged at mid-single digit • Near-term expectation is for mid single digit inflation • Driven by demand from BRIC ec
Slide 9: Guidance
Guidance Revenue Cost Capital Volume 2-3%, less in Raw material inflation GB £50-55m 2012 of mid-single digit 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 1-2% 5% of revenue to the top line Improving F
Slide 10: Guidance
Guidance Revenue Cost Capital Volume 2-3%, less in Raw material inflation GB £50-55m 2012 of mid-single digit 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 1-2% 5% of revenue to the top line Improving F
Slide 11: Capital Guidance
Capital Guidance Underlying Plus in 2012 Plus in 2013 GB £40-45m GB additional £10m France €6m SAP driving £8m PVO cost saving implementation France €6m, SAP France €12m for France €6m driving synergies capacity expansion programme (e.g. Fruit Shoot) Ireland €4m – Ireland €4m concentrate plant (fran
Slide 12: Cash priorities – invest for growth, shareholder return and pay down debt
Cash priorities – invest for growth, shareholder return and pay down debt • Business is cash generative • Averaged in excess of £60m over the last 5 years • Improving free cash flow conversion in the medium term • Invest in the organic business for organic growth • Dividend payout ambition remains a
Slide 13: 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
Slide 14: Operating zone for debt leverage
Operating zone for debt leverage (adjusted net debt / EBITDA) 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 3.3 3.2 3.1 1.5 3.0 2.8 1.5 3.0 2.5 2.7 2.5 2.7 2.5 2.4 2.4 2.4 2.4 1.0 1.0 0.5 0.5 0.0 0.0 HY07 FY07 HY08 FY08 HY09 FY09 HY10 FY10 HY11 FY11 2007 2008 2009 2010 2011 FY Net Debt/EBITDA
Slide 15: Summary
Summary Secure raw materials platform for 2012 Business well funded for the medium term Improving free cash flow generation and debt pay down Underpinned progressive dividend policy
Slide 16: Market overview
Simon Stewart Group Marketing Director – Britvic plc Market overview
Slide 17: Agenda
Agenda • Overview of the Britvic soft drinks markets • A resilient performance • Shopper trends • How consumers are controlling what they spend and where • 2012 Outlook • 2011 into 2012, the impact of macro factors in our core markets • New group developments
Slide 18: GB soft drinks market 2011 – a resilient performance
GB soft drinks market 2011 – a resilient performance • GB market grew volume by 1% and value by 4% including the VAT increase of 2.5% • Carbonates performing better than stills • Take-home growing, on-premise continued to decline • Total soft drinks market value £9.7bn and growing • Cola still the l
Slide 19: GB - market growth in Take-Home led by the multiples
GB - market growth in Take-Home led by the multiples • Value up 4% (underlying) and volume up 1.0% • Multiples and impulse growing at similar rates • Convenience stores out-performing the high street and out-of-town formats • The multiples winning as independents lag the market • Soft drinks in take
Slide 20: GB – Total pubs in decline but managed sector in growth
GB – Total pubs in decline but managed sector in growth • Value down by 0.6% (underlying down 3.1%) and volume down 4.0% • Mixed results by outlet type • Independents declining • The major managed pubs continue to grow • 16 pubs a week still closing, • Still soft drinks decline as carbonates holds s
Slide 21: France - a robust 2011
France - a robust 2011 • Take-home in both volume and value growth • Stills out-performing carbonates • Brands driving the growth • Sugar tax effective from Jan 2012 • Syrups category not impacted • Juice drinks are subject to the tax • Pass through to retailer • 2012 Election year Source: IRI censu
Slide 22: Ireland - consumers focus on value deepened
Ireland - consumers focus on value deepened • Take-home volume declined ahead of value • Stills driving the decline as carbonates held steady • Cola and squash in growth • Shoppers focus on value • Pub market continues to decline • Consumer confidence low • Saving more and spending less • Impact of
Slide 23: Changing shopper habits – where they shop
Changing shopper habits – where they shop Saving money on food shopping continues to be important • More so now than in the recession of 2008 Less shopping trips to the big out of town stores • Cost of fuel front of mind for shoppers Increase in local, small basket spend to “top up” main shop On-lin
Slide 24: Changing shopper habits – how they shop
Changing shopper habits – how they shop • Brands continue to grow ahead of own-label • Shoppers are increasingly working to a fixed spend • With shoppers prioritising what they need to buy the focus is shifting away from large multi-buy mechanics • Less of a desire to stock-up with incremental purch
Slide 25: 2012 macro outlook
2012 macro outlook GDP 2011 2012 2013 • 2012 likely to be another difficult UK 0.9% 0.5% 1.8% year IRELAND 1.0% 0.0% 1.0% • GDP growth rates declining FRANCE 1.6% 0.0% 1.07% Unemployment 2011 2012 2013 • Increasing unemployment likely to UK 8.1% 8.6% 8.2% further impact consumer spending IRELAND 14.
Slide 26: Consumer outlook for soft drinks in 2012
Consumer outlook for soft drinks in 2012 • Brands likely to perform relatively well • Established brands that shoppers know and trust to win through • Carbonates to continue to perform ahead of stills • Premium categories growth linked to improving consumer confidence • A continued consumer focus on
Slide 27: New group developments
New group developments = BO 777) eB! = 4
Slide 28: Stevia – an exciting development for soft drinks
Stevia – an exciting development for soft drinks • Stevia is a plant of the sunflower family, native to Paraguay • Used as a sweetener across South America for hundreds of years • A zero calorie alternative to sugar • Approved for use in Europe November 2011 • A credible alternative to artificial sw
Slide 29: Stevia to feature in SoBe V Water
Stevia to feature in SoBe V Water • Leveraging the existing expertise in Britvic France • Overcomes a barrier for consumers • Artificial avoiders • Sugar/calorie avoiders • Great taste • In the US its introduction to SoBe led to material growth of volume and brought new users into the category
Slide 30: Licensing - building brand equity
Licensing - building brand equity • A number of agreements in place and on their way for our well-known brands • Drives great brand awareness with consumers • A relatively minor source of income
Slide 31: Summary
Summary Branded soft drinks are resilient but not immune Consumer spending being managed tightly into 2012 Underlying trend favours carbs ahead of stills
Slide 32: Break
Break Britvic plc investor seminar 2012
Slide 33: GB 2012 marketing & innovation
Simon Litherland Managing Director - Britvic GB GB 2012 marketing & innovation
Slide 34: Introduction
Introduction • Joined Britvic October 2011 as GB MD • Prior to that spent 20 years at Diageo • 12 years in general management • Last role was MD Diageo GB • Before that MD at Brandhouse, a JV between Diageo, Heineken and Namibia Breweries
Slide 35: Agenda
Agenda • Driving market leading Pepsi plans • Reinforcing our number 1 stills position • Delivering our biggest ever cross-portfolio marketing campaign • Strong progress with recent innovation launches
Slide 36: Driving market leading Pepsi plans
Driving market leading Pepsi plans
Slide 37: Pepsi: the driver of cola growth
Pepsi: the driver of cola growth • Pepsi has driven 63% of category volume growth in the last 3 years • Pepsi value up 25% in take-home • The number 1 soft drink in pubs & club ps • Growing the category through innovation 5 0b • Both the 600ml PET and 250ml can + 2 have brought new consumers into co
Slide 38: Pepsi - Supported by compelling consumer engagement
Pepsi - Supported by compelling consumer engagement
Slide 39: Pepsi in 2012 – Engaging and exciting consumers across 2012
Pepsi in 2012 – Engaging and exciting consumers across 2012 Major campaign to be revealed later in the year
Slide 40: 2012 Football - the Pepsi way
2012 Football - the Pepsi way • In 2011 the Pepsi & Doritos tie-in achieved double-digit growth for both brands • Linking soft drinks and snacks grows both categories • Pepsi is closely associated with football in the minds of consumers • An ability to be innovative and disruptive with its marketing
Slide 41: Linking Pepsi and Walkers with a major campaign
Linking Pepsi and Walkers with a major campaign • Snacks and soft drinks combined are a powerful combination • A cross-category opportunity with Walkers - the number 1 snacks brand. • On-pack activity, dual-brand advertising, in- store feature & display • To be revealed soon
Slide 42: Building on the success of Pepsi 250ml cans
Building on the success of Pepsi 250ml cans • Pepsi 250ml cans introduced Sep 2011 • 2/3 of the volume has been incremental to the category • Growing both the cola category and Pepsi share • Range extended to both Tango and 7UP – Spring 2012 Source: Nielsen Scantrack
Slide 43: Reinforcing our number 1 stills position
Reinforcing our number 1 stills position
Slide 44: Robinsons squash - the category leading brand
Robinsons squash - the category leading brand • The number 1 soft-drink in GB based on volume consumed • The number 12 grocery brand, with retail sales in excess of £200m • 3.5X bigger than the number 2 squash brand Source: Nielsen Scantrack
Slide 45: An opportunity to grow - the family drink
An opportunity to grow - the family drink that is always top of the shopping list • Grow value through enhanced brand preference • Making water more fun • Best tasting • Consistent brand campaign • Reinvigorate the squash category through format and product development • Pack and price architecture
Slide 46: Double concentrate - a catalyst to grow the category
Double concentrate - a catalyst to grow the category • Robinsons introduced DC in 2011 • DC households buy more squash • Having more squash in the home increases consumption • an expandable category • Major opportunity to bring more households into DC
Slide 47: Connecting with consumers all year round
Connecting with consumers all year round
Slide 48: Fun freebies to connect with consumers
Fun freebies to connect with consumers • A range of Robinsons-branded collectibles from cups to fridge coolers • Making consuming squash just a little easier • Leaving a Robinsons legacy across the country
Slide 49: Wimbledon and the Royal Jubilee celebrated
Wimbledon and the Royal Jubilee celebrated • A jubilee-themed limited edition to capitalise on the Royal Jubilee celebrations - Strawberries & Cream • Sampling campaigns and in-store activity across the Wimbledon tournament
Slide 50: Fruit Shoot - the leading children’s brand
Fruit Shoot - the leading children’s brand • The number 1 children’s soft drink • In market now for over 10 years • A must-stock in all channels • Its premium position built from a foundation of innovative packaging and engaging marketing Source: Nielsen Scantrack
Slide 51: Fruit Shoot - ready for the next generation
Fruit Shoot - ready for the next generation • New bottle design • New, patented, magi-cap • A major brand investment to refresh the number 1 children’s soft drink • Positioning Fruit Shoot for the future
Slide 52: New packs across the portfolio
New packs across the portfolio • New 15 bottle “party-pack” • New 8 pack of mini bottles for Hydro • New 275ml single bottle • New bottle design and cap for My5 range • More affordable entry point for impulse
Slide 53: J20 - the number 1 adult soft drink
J20 - the number 1 adult soft drink • The leading adult juice drinks • The biggest packaged drink in the licensed trade • Highest share in 3 years achieved at Christmas 2011 Source: Nielsen Scantrack MAT December CGA Brand index total pubs & clubs MAT November 2011
Slide 54: Refreshed for future growth
Refreshed for future growth • New packaging • Redesigned bottle • Standout branding • New formulation • More refreshing • Less sweet • Range optimised • Supported by limited editions
Slide 55: Limited editions to support the core
Limited editions to support the core • Papaya Punch in-store for the summer • Diamond Berry to capitalise on the Jubilee celebrations • Glitter Berry back for Christmas • In 2011 it brought new shoppers into the category • Limited editions generate interest and incremental feature & display in-store
Slide 56: Delivering our biggest ever cross portfolio marketing campaign
Delivering our biggest ever cross portfolio marketing campaign
Slide 57: Every purchase helps transform outdoor spaces
EVERY PURCHASE HELPS TRANSFORM OUTDOOR SPACES AN x ge i= BRITVIC ~ PEPSICO Mace a
Slide 58: An integrated plan to motivate both consumers and retailers
An integrated plan to motivate both consumers and retailers The Shopper The Retailer / H.O. The Store Team To motivate purchase To secure great portfolio F&D To drive excellent execution At home Exclusive’s & linking to Communication, incentives corporate agenda’s & community champions In store Port
Slide 59: Giving consumers the chance to support their local projects
Giving consumers the chance to support their local projects that they value
Slide 60: Britvic’s biggest-ever campaign
Britvic’s biggest-ever campaign On pack TV Brand home page takeovers Feb 1st – Oct 31st 2012 Feb 11th ‐ April Feb 11th ‐ April Customer overlays & www.transformyourpatch.com Digital & social media POS / Premiums Feb‐Oct
Slide 61: Strong progress with recent innovation launches
Strong progress with recent innovation launches
Slide 62: Glucose category continues to grow strongly
Glucose category continues to grow strongly • Glucose category is 40% of total Energy drinks • In 2011 the glucose category grew value by nearly 16% • Now worth over £300m in retail sales • Price and margin accretive • Britvic entered the market in 2010 with Mountain Dew • Product Launch of the Year
Slide 63: Mountain Dew 2012
Mountain Dew 2012 • Sampling campaigns at both music festivals and gaming events • A new limited edition flavour • A major tie-up with XBOX for the launch of Halo 4 - one of 2012’s biggest gaming launches
Slide 64: Establishing Ice Tea in the UK is a huge opportunity
Establishing Ice Tea in the UK is a huge opportunity Ice Tea share of Total Soft Drinks by Market UK market value doubled in 2 years 15% 13% £9,000,000 11% £8,000,000 10% £7,000,000 £6,000,000 £5,000,000 Lipton 6% 5% £4,000,000 Ice Tea 4% 4% £3,000,000 3% 3% 3% 3% 3% 3% 2% £2,000,000 1% 1% 1% £1,000
Slide 65: Lipton - the no.1 brand in the fastest growing category
Lipton - the no.1 brand in the fastest growing category • A major global brand • Category in GB growing +40% Year on Year • Lipton has +60% volume share in GB • Doubled in size since Britvic acquired the bottling rights to the brand in 2009 • Sampling campaign and money-back pledge for 2012 Source:
Slide 66: A comprehensive plan across the year
A comprehensive plan across the year +25% +18% +22%
Slide 67: An exciting year of activity across the portfolio
An exciting year of activity across the portfolio
Slide 68: Summary
Summary A compelling marketing plan across the year to continue Pepsi momentum A major investment in the stills portfolio The biggest ever cross-portfolio campaign A compelling plan to drive the GB business
Slide 69: International brand development
Paul Moody Chief Executive - Britvic plc International brand development
Slide 70: Agenda: Progress of our International brand development
Agenda: Progress of our International brand development • Ireland 2012: A major brand re-launch • Britvic France • Teisseire Fruit Shoot Year 1:Growing the children’s category • France 2012: Broadening the core branded portfolio • Franchise progress: Momentum building and new developments
Slide 71: Britvic Ireland: marketing across the leading portfolio
Britvic Ireland: marketing across the leading portfolio MiWadi will give children the chance to create a new flavour Club Orange will continue to cause a stir with its irreverent campaigns 7UP will offer consumers the chance to share the Craic with friends
Slide 72: Britvic Ireland: reinvigorating the number 1 water brand
Britvic Ireland: reinvigorating the number 1 water brand • Re-launched in 2012 • New bottle, new look • Major campaign to support the brand • Pack architecture innovation to meet consumer needs • Reinforcing the long-term ambition of Ballygowan
Slide 73: Britvic France: Teisseire Fruit Shoot - a strong start in year 1
Britvic France: Teisseire Fruit Shoot - a strong start in year 1 • Children’s category in strong growth, value growth of 15.4% • Fruit drinks is leading that growth, up 26% in take-home • Distribution in excess of 60%, rate of sale comparable with the leading brand • Listed in all of the major retai
Slide 74: Britvic France: Building awareness with consumers and a new flavour
Britvic France: Building awareness with consumers and a new flavour for 2012 • Sponsorship of Caroline Costa – a teen sensation with over 50m hits on YouTube and 0.5m friends on Facebook • On TV, in print, digital PR and sampling • A new flavour specifically for the French market (March 2012)
Slide 75: Britvic France: Syrups innovation
Britvic France: Syrups innovation • Extending the range of Teisseire with 2 new flavours • New smaller pack introduced to Teisseire range • Introducing lemon and orange to the Moulin de Valdonne “Classiques” range • Extending Moulin de Valdonne into the milk category
Slide 76: Britvic France: Syrups marketing
Britvic France: Syrups marketing • Teisseire sponsorship of the popular TV show “Plus Belle La Vie” • Watched by over 5m viewers in France • Tour de France sponsorship in 2012 • Over 1m samples given away • Watched by 12m in France • 3rd biggest sporting event in the world • Moulin de Valdonne digit
Slide 77: Britvic France: Juice innovation
Britvic France: Juice innovation • A new opportunity exploited with the introduction of Fruité O • A juice-based drink for consumption throughout the day • Less sugar than pure juice • A new range of Pressade “le BIO” • An affordable organic 100% fruit juice • 3 flavours to meet 75% of consumer need
Slide 78: Britvic France: Juice marketing
Britvic France: Juice marketing • Pressade on television for the first time • Sponsorship of “Un diner presque parfait” The French “Come dine with me” • On air from April • Core audience of the show is aligned with the target Pressade consumer
Slide 79: Australia - Demonstrating why the franchise model works
Australia - Demonstrating why the franchise model works In Australia we launched Fruit Shoot in November 2010 • Achieved 17% market share in Year 1 • The number 2 children’s soft drink • Secured listings with main retailers - Coles, Woolworths and Metcash Source: Nielsen Australia pop tops category
Slide 80: Fruit Shoot - growing the category
Fruit Shoot - growing the category • Fruit Shoot is growing and developing the category • Has delivered 30% of the category growth • Success in Year 1 has led to increased space and distribution for 2012 • Britvic now helping retailers to plan shelf space • New flavour launch in 2012
Slide 81: Australia: a marketing campaign aimed at both parents and children
Australia: a marketing campaign aimed at both parents and children Mums and Children’s TV Experimental Sampling – Little Nippers, Beaches, sport events & Easter show Integrated campaign with Nickelodeon ONLINE & TV
Slide 82: US - Increasing distribution and in-market production
US - Increasing distribution and in-market production commences May 2012 • The momentum continues with distribution now in 12,000 outlets versus 5,000 in November. • Distribution continues to grow rapidly • In-market production commences May 2012 Source: Internal Britvic data
Slide 83: Fruit Shoot - Two new agreements in the US
Fruit Shoot - Two new agreements in the US • Agreement reached to launch Fruit Shoot into 2 additional states • 3rd state agreement with PBC • Ohio with Gross & Jarson • Distribution now in 8 states • Growing evidence of Fruit Shoot building success in the US • 2012 guidance of international revenue
Slide 84: Fruit Shoot – building its international credibility
Fruit Shoot – building its international credibility • In the US it is now grown from 1 state to 8 in a year • Distribution in 12,000 outlets and growing US weekly sales growth 2009 to 2012 • Growing the category in Australia Weekly Sales Progression in USA 2009-2012 PBC Launch G&J Launch • Distribu
Slide 85: Summary
Summary Investing in the core brands in Ireland and France Continued success for Fruit Shoot in the US and Australia Agreements reached for Fruit Shoot in two additional states Growing the group-owned brands internationally
Slide 86: Q & A
Q&A Britvic plc investor seminar 2012