Britvic — H1 2021 Earnings Presentation
28 slides from Britvic's earnings presentation, May 18, 2021
Slide 1: Interim Results 18 May 2021
INTERIM RESULTS 18 MAY 2021
Slide 2: Today's webcast
Today’s webcast •Simon Litherland •H1 highlights •Joanne Wilson •Financial performance •Simon Litherland •Emerging strongly and confident in our strategy for growth 2
Slide 3: H1 highlights
H1 highlights BUILD LOCAL FLAVOUR •A strong performance in challenging conditions, FAVOURITES & BILLIONS OF demonstrating the resilience and agility of Britvic GLOBAL PREMIUM WATER BRANDS OCCASIONS •Responding to evolving consumer trends and winning in the channels open to us •Significant progress a
Slide 4: Britvic has responded with agility to the changing landscape
Britvic has responded with agility to the changing landscape Channel Performance Britvic Response •At-Home channel sales continued to benefit with •Maintaining high service levels and continuity of supply consumers: •Strengthening our customer relationships •Turning to trusted family favourites •Par
Slide 5: Winning share in two of our key growth markets, GB and Brazil
Winning share in two of our key growth markets, GB and Brazil • Consistent market outperformance in GB: • Britvic GB At-Home channel RSV* +6.2% vs soft drinks market +1.6% • Pepsi MAX #1 cola variant by volume in At-Home • 7UP #1 lemon/lime brand by value & volume in At-Home • Tango grew value at 4x
Slide 6: Flavouring billions of water occasions
Flavouring billions of water occasions •Estimated 1 in 4 water occasions are currently flavoured - significant headroom to grow •Concentrates is a key category for the future of soft drinks: •Healthy hydration – low calorie, real fruit, added health benefits and no artificial colours or flavours •Gr
Slide 7: Continued progress on our 'Healthier People, Healthier Planet' sustainable business strategy
Continued progress on our ‘Healthier People, Healthier Planet’ sustainable business strategy Healthier People Healthier Planet 100% rPET rollout underway c.90% portfolio will be below HFSS threshold Diversity & Inclusion KPIs in every market CDP Supplier Now with Engagement Leader added vitamins & z
Slide 8: We continue to build our presence in new growth spaces
We continue to build our presence in new growth spaces Digital Beyond the Bottle •360˚ marketing campaigns across the portfolio •Combining The Boiling Tap Company’s equipment expertise with Britvic’s know-how in flavouring water •Over-indexing in online Grocery and Wholesale •Range of equipment solu
Slide 9: Today's webcast
Today’s webcast •Simon Litherland •H1 highlights •Joanne Wilson •Financial performance •Simon Litherland •Emerging strongly and confident in our strategy for growth 9
Slide 10: Resilient first half performance despite the continued impact on key finance metrics from COVID-19
Resilient first half performance despite the continued impact on key finance metrics from COVID-19 Metric Reported Adjusted Var Revenue £617.1m (6.3)% Adjusted EBIT £60.1m (15.4)% Adjusted EBIT margin 9.7% (110)bps Adjusted EPS 15.2p (20.0)% Dividend per share 6.5p - Free cash flow £1.9m +£53.7m Adj
Slide 11: Lockdowns have continued to impact channel performance and mix
Lockdowns have continued to impact channel performance and mix Britvic H1 revenue YOY % Britvic Group Q1 & Q2 volume, price/mix and revenue Oct‐Dec Jan‐Mar 15.2% some restrictions national lockdowns 11.5% Q1 Q2 ‐1.1% ‐4.8% ‐2.7% ‐3.1% ‐15.9% ‐5.4% ‐5.8% ‐34.3% ‐6.5% Total GB GB At‐Home GB Out‐of‐Hom
Slide 12: Business unit H1 performance
Business unit H1 performance GB BRAZIL REST OF WORLD GROUP Volume (6.1)% +13.7% (8.5)% (4.2)% ARP per litre +1.3% +1.3% 0.1% 0.0% Revenue (4.8)% +15.2% (15.9)% (6.3)% Brand contribution (1.8)% (4.1)% (14.0)% (4.7)% Brand margin % 120bps (420)bps 70bps 60bps GB Brazil Rest of World • Continued to gro
Slide 13: Disciplined management of fixed costs continued
Disciplined management of fixed costs continued % constant HY 2021 exchange rate Total A&P spend £19.6m 18.1% A&P as a % of revenue 3.2% (30)bps Non-brand A&P £4.3m 28.3% Fixed supply chain £62.6m (12.8)% Selling costs £36.0m 8.1% Overheads & other costs £59.8m 3.7% Total fixed cost base £162.7m 0.0
Slide 14: Adjusting items
Adjusting items £m Strategic restructuring costs – primarily (3.2) Counterpoint closure Pension past service cost (0.7) Other (0.2) Total excluding acquisition-related (4.1) amortisation Acquisition-related amortisation (3.9) Total included in profit before tax (8.0) 14
Slide 15: Disciplined cash management delivering strong FCF and debt reduction
Disciplined cash management delivering strong FCF and debt reduction • Continued focus on cash management 2 7 •Tight working capital management and prioritisation of 8 Others capex ‐52 Income Tax 55 •Positive FCF in H1 (pre-adjusting items) Adj EBIT 16 •Adjusted net debt of £570m, £94m lower than H1
Slide 16: 2021 Modelling assumptions
2021 Modelling assumptions Input cost inflation Low single digit inflation Expected margin improvement from pack/channel mix and operating leverage will be partially offset by A&P step-up in H2 Margin and investment drivers in H2 Full year capex anticipated to be £75-80m P&L £14m to £16m, including
Slide 17: Summary
Summary •A resilient H1 performance in a challenging environment •Focused cash management with long-term financing and ample headroom •Sound financial footing means we are able to invest with confidence in H2 to emerge strongly as GB re-opens •Pace of recovery across other markets remains unclear 17
Slide 18: Today's webcast
Today’s webcast •Simon Litherland •H1 highlights •Joanne Wilson •Financial performance •Simon Litherland •Emerging strongly and confident in our strategy for growth 18
Slide 19: Simon Litherland – confident we will emerge stronger
Simon Litherland – confident we will emerge stronger •Clear and compelling priorities for H2 and beyond •Continuing to win At-Home and online •Support the reopening of the Out-of-Home and on-the-go sectors Through: •Investment to deliver exciting marketing campaigns and compelling in-store execution
Slide 20: Supporting the reopening of Out-of-Home: Licensed, QSR/foodservice & on-the-go
Supporting the reopening of Out-of-Home: Licensed, QSR/foodservice & on-the-go LICENSED HOSPITALITY •Well under half of GB licensed premises open up to 16/5, outdoors only •From 17/5 c.95% outlets expected to open (indoors with social distancing restrictions), total est. turnover c.60-70% of 2019 •F
Slide 21: Exciting marketing campaigns in H2 across all channels
Exciting marketing campaigns in H2 across all channels Pepsi MAX Club relaunch Champions League in Ireland Club mixers retail activation focus in Ireland Live Nation partnership: Multi-channel 9 major festivals, 22 venues, Tango activity 44 gigs London Essence Pepsi MAX Taste Challenge returns consu
Slide 22: Exciting marketing campaigns in H2 across all channels
Exciting marketing campaigns in H2 across all channels Moulin de Valdonne print & digital campaign Teisseire Fruit Shoot ‘Back to school’ campaign Return of 'Fruit Shoot for the Teisseire TV & digital Moon' campaign campaign Dafruta Tropical Robinsons 'Let There be Fruit' campaign and 22 digital cam
Slide 23: Strong innovation launches to grow consumption and broaden appeal
Strong innovation launches to grow consumption and broaden appeal Range of new flavours and Ballygowan brand relaunch, New and New healthier options pack formats to broaden grounded in sustainability improved with added appeal credentials Purdey's range functional benefits 23
Slide 24: Relaunch of Rockstar in H2 to accelerate growth in energy
Relaunch of Rockstar in H2 to accelerate growth in energy – a big and fast-growing category •Access to #2 soft drinks category in GB, value £1.3bn and growing at +6.7% •Brand has historically underperformed the category •Re-launch in H2 •Brand repositioning to attract new consumers •New premium bran
Slide 25: Acquisition of Plenish to enable access to fast-growing plant-based category
Acquisition of Plenish to enable access to fast-growing plant-based category •Access to the fast-growing plant-based drinks category. Retail sales value of milks alone forecast to double from c.£350m by 2024 •Acquisition of PLENISH, a premium brand with a range of plant- based m*lks, cold pressed ju
Slide 26: Clear long-term growth drivers
Clear long-term growth drivers GLOBALISE PREMIUM BRANDS AND LEAD MARKET GROWTH IN GB ACCELERATE AND EXPAND IN BRAZIL IMPROVE PROFITABILITY IN WESTERN EUROPE • Outpace the category with focus on • Leverage simplified France and • Continued rejuvenation of flavour family favourites, scale innovation,
Slide 27: The pandemic has reinforced confidence in our growth strategy
The pandemic has reinforced confidence in our growth strategy STRATEGIC PRIORITIES BUILD LOCAL FLAVOUR FAVOURITES & BILLIONS OF HEALTHIER PEOPLE, ACCESS NEW GLOBAL PREMIUM WATER HEALTHIER PLANET GROWTH SPACES BRANDS OCCASIONS MARKET FOCUS LEAD MARKET GLOBALISE PREMIUM BRANDS AND ACCELERATE AND GROWT
Slide 28: Summary
Summary •A robust first half performance in a challenging macro environment demonstrates strong resilience and agility •A strong plan for H2 with clear and compelling priorities •Emerging stronger, well-positioned for the recovery •Our growth strategy is working today and is future fit for tomorrow