Britvic — H1 2019 Earnings Presentation
27 slides from Britvic's earnings presentation, May 22, 2019
Slide 1: Britvic plc Interim Results 2019
Britvic plc Interim Results 2019 22 MAY 2019
Slide 2: Strong performance and progress against strategy
Simon Litherland – CEO STRONG PERFORMANCE AND PROGRESS AGAINST STRATEGY BRITVIC PLC INTERIM RESULTS 2019 2
Slide 3: 2019 – Strong performance and progress against strategy
2019 – STRONG PERFORMANCE AND PROGRESS AGAINST STRATEGY REVENUE, BRAND LOW/NO SUGAR MARGIN AND CONTRIBUTION LEADERSHIP EARNINGS GROWTH IN ALL DRIVING GROWTH GROWTH GEOGRAPHIES IN GB BCP ON-TRACK: CHAMPIONING MAINTAINING PLATFORM FOR SUSTAINABILITY: FOCUS ON BRAND ENHANCED A HEALTHIER DEVELOPMENT & G
Slide 4: GB Carbs successfully navigated the SDIL levy
GB CARBS SUCCESSFULLY NAVIGATED THE SDIL LEVY ACCELERATED CONSUMER TREND TOWARDS LOW/NO SUGAR VARIANTS ➢ Pepsi MAX generated more incremental value than any cola variant ➢ 7UP FREE generated more incremental value than any lemon & lime variant ➢ R Whites growth led by on-trade offering ➢ Tango in gr
Slide 5: GB Stills revenue in strong growth driven by Robinsons
GB STILLS REVENUE IN STRONG GROWTH DRIVEN BY ROBINSONS PREMIUMISATION AND HEALTHY HYDRATION CREDENTIALS ➢ Premiumisation strategy is working ➢ Robinsons gaining share and growing the category ➢ Creations and Cordials driving positive price/mix ➢ Significant price realisation in core range ➢ Attracti
Slide 6: Brand contribution in all geographies: Brazil, Ireland
BRAND CONTRIBUTION IN ALL GEOGRAPHIES BRAZIL IRELAND ➢ Proactive price and mix management ➢ Disciplined revenue management ➢ Growth in core and new brands ➢ Strong growth in low/no sugar ➢ Signs of market conditions improving ➢ Softening in on-trade channel BRITVIC PLC INTERIM RESULTS 2019 6
Slide 7: Brand contribution in all geographies: France, International
BRAND CONTRIBUTION IN ALL GEOGRAPHIES FRANCE INTERNATIONAL ➢ Proactive management of mix, price and COGS ➢ Benelux growth through Teisseire Zero ➢ Syrups in revenue growth ➢ Travel & Export expansion ➢ Managed decline in private label ➢ Fruit Shoot growth in USA BRITVIC PLC INTERIM RESULTS 2019 7
Slide 8: Business Capability Programme will complete by end 2019
BUSINESS CAPABILITY PROGRAMME WILL COMPLETE BY END 2019 ADDITIONAL INCREASED PRODUCTION LOWER ENVIRONMENTAL CAPACITY FLEXIBILITY EFFICIENCY COST BENEFITS Transformational platform underpins long-term growth potential BRITVIC PLC INTERIM RESULTS 2019 8
Slide 9: A Healthier Everyday - Championing Sustainability
A HEALTHIER EVERYDAY - CHAMPIONING SUSTAINABILITY HEALTHIER PEOPLE HEALTHIER COMMUNITIES HEALTHIER PLANET REFORMULATING WITHOUT COMPROMISING BUILDING A GREAT AND INCLUSIVE MINIMISING OUR ENVIRONMENTAL TASTE OR QUALITY EMPLOYEE EXPERIENCE IMPACT OVER 20BN CALORIES REMOVED OUR BRANDS INSPIRE CONSUMERS
Slide 10: New innovation and brand development to drive growth
NEW INNOVATION AND BRAND DEVELOPMENT TO DRIVE GROWTH NEW EMERGING CORE BRAND MAJOR BRAND PREMIUM BRAND EXTENSIONS RELAUNCH RANGES PORTFOLIO IMMINENT BRITVIC PLC INTERIM RESULTS 2019 10
Slide 11: Summer 2019 marketing campaigns preview
SUMMER 2019 MARKETING CAMPAIGNS PREVIEW BRITVIC PLC INTERIM RESULTS 2019 11
Slide 12: Summer 2019 marketing campaigns preview
SUMMER 2019 MARKETING CAMPAIGNS PREVIEW BRITVIC PLC INTERIM RESULTS 2019 12
Slide 13: Time to Tango
TIME TO TANGO ACCELERATING STRONG GROWTH IN FRUIT CARBONATES ➢ Fruit carbonates have been a major beneficiary of the SDIL ➢ Tango in growth ahead of the relaunch ➢ New pack design and sugar-free flavours recently launched ➢ Multi-channel marketing campaign launches May 2019 ➢ TV, Cinema and social m
Slide 14: Soft drinks is a robust and resilient category
BRITVIC: A FLEXIBLE, CASH GENERATIVE BUSINESS CONFIDENT OF FUTURE GROWTH CATEGORY IS SOFT DRINKS IS A ROBUST AND RESILIENT CATEGORY CONSUMERS INCREASINGLY VALUING DEMANDING SEEKING HEALTH PREMIUM GREATER ARE MORE CHOICE CONSCIOUS EXPERIENCES CONVENIENCE BRITVIC CATEGORY BROAD PORTFOLIO HEALTHY SALES
Slide 15: A strong financial performance
CHRIS HANCOCK STRATEGY DIRECTOR A STRONGFINANCIAL PERFORMANCE BRITVIC PLC INTERIM RESULTS 2019 15
Slide 16: A strong financial performance
A STRONG FINANCIAL PERFORMANCE Metric Reported % Organic* % Revenue 4.9% 1.9% Adjusted EBIT 4.0% 5.0% Adjusted EBIT Margin (10) bps + 30 bps Adjusted EPS 22.3p 5.2% DPS 8.3p 5.1% Adjusted Net Debt/EBITDA 2.4x 0.1x Adjusted EBIT is a non-GAAP measure and is defined as operating profit before adjustin
Slide 17: Business unit highlights
BUSINESS UNIT HIGHLIGHTS GB STILLS GB CARBS TOTAL GB IRELAND Volume 0.8% (4.5%) (3.4%) (4.5%) ARP per litre 4.0% 7.2% 6.8% 4.1% Revenue 4.9% 2.2% 3.1% (0.9%) Brand contribution 5.7% (0.9)% 1.1% 2.4% Brand margin % 30 bps (110) bps (80) bps 90 bps STILLS CARBS IRELAND ➢ All three core brands in reven
Slide 18: Business unit highlights
BUSINESS UNIT HIGHLIGHTS FRANCE BRAZIL INTERNATIONAL Volume (8.4%) 1.5% 20.3% ARP per litre 2.9% 6.6% (0.1%) Revenue (5.8%) 8.0% 20.2% Brand contribution 9.3% 3.8% 33.3% Brand margin % 440 bps (80) bps 180 bps FRANCE BRAZIL INTL ➢ ARP improvement through proactive ➢ ARP growth through brand and pack
Slide 19: Modest increase in overheads due to investment in A&P and selling costs
MODEST INCREASE IN OVERHEADS DUE TO INVESTMENT IN A&P AND SELLING COSTS % Organic Constant ➢ Continued focus on cost H1 19 Exchange Rate efficiency to support reinvestment in growth drivers Total A&P spend 32.6 (10.5) A&P as a % of revenue 4.6% +40 bps ➢ A&P increased as we lap delay in spend pre-le
Slide 20: Confident of continued improvement in FCF
CONFIDENT OF CONTINUED IMPROVEMENT IN FCF H1 2019 H1 2018 £m £m FUTURE DRIVERS OF FCF Adjusted EBIT 83.7 80.5 ➢ Organic profit growth Depreciation 29.1 23.4 Amortisation (non-acq related) 3.8 4.0 ➢ Delivery of remaining BCP cost benefits guidance Adjusted loss on disposal of PPE 0.9 1.1 Adjusted EBI
Slide 21: Full year guidance
FULL YEAR GUIDANCE ➢ Input costs Low single digit inflation ➢ Capital spend Guidance remains at £70m to £80m ➢ Adjusting items £35m to £40m, reflecting inclusion of GMP pension equalisation ➢ Pension deficit contributions £20m contribution ➢ Effective tax rate Guidance remains at 21% to 22%, subject
Slide 22: Summary
SUMMARY REVENUE, BRAND DISCIPLINED MARGIN AND CONTRIBUTION REVENUE EARNINGS GROWTH IN ALL MANAGEMENT GROWTH GEOGRAPHIES CONFIDENT OF EXCELLENT A SUSTAINABLE DELIVERING LONG-TERM BUSINESS FULL YEAR GROWTH MODEL EXPECTATIONS PROSPECTS BRITVIC PLC PRELIMINARY RESULTS 2018 22
Slide 23: Questions?
QUESTIONS? BRITVIC PLC INTERIM RESULTS 2019 23
Slide 24: Appendix
APPENDIX BRITVIC PLC INTERIM RESULTS 2019 24
Slide 25: A solid financial platform underpinning the strategy
A SOLID FINANCIAL PLATFORM UNDERPINNING THE STRATEGY VOLUME PRICE PROFITABLE GROWTH STRONG UNDERLYING FCF CONVERSION PROGRESSIVE INVEST IN BUSINESS SELECTIVE M&A MAINTAIN LONG-TERM DIVIDEND POLICY CAPABILITY ACTIVITY DEBT LEVERAGE 50% PAY OUT RATIO CAPEX 3.5% TO 4.5% WITHIN OF REVENUE 1.5X TO 2.5X R
Slide 26: A solid financial platform underpinning our growth strategy
A SOLID FINANCIAL PLATFORM UNDERPINNING OUR GROWTH STRATEGY ▶ £545m equivalent of USPP debt (at contracted rates) ▶ £77m equivalent of USPP notes matured in February 2019 ▶ USPP notes issued in GBP and EUR for fixed and floating rates ▶ £400m revolving credit facility in place to November 2021 ▶ Cir
Slide 27: ADR Programme
ADR PROGRAMME ▶ ADRs give access to cross-border market liquidity ▶ Cost effective and convenient to own ▶ Quoted in U$D ▶ Dividends paid in U$D ▶ Symbol - BTVCY ▶ CUSIP - 111190104 ▶ Ratio - 1ADR = 2 ORD ▶ Underlying SEDOL : BON8QD5 ▶ Underlying ISIN : GB00B0N8QD54 ▶ Depositary : BNY MELLON BRITVIC