Britvic — H1 2015 Earnings Presentation
34 slides from Britvic's earnings presentation, 2015
Slide 1: Britvic plc Interims presentation 2015
Britvic plc Interims presentation 2015
Slide 2: Gerald Corbett, Chairman
Gerald-Corbett Chairman Making life's everyday moments more enjoyable
Slide 3: John Gibney, Chief Financial Officer
John Gibney Chief Financial Officer
Slide 4: Continued strong earnings growth in challenging trading conditions
Continued strong earnings growth in challenging trading conditions -0.7% +6.2% +60bps +11.6% 0.4x +9.8% Group Group Group Adjusted Reduction in Interim Revenue EBITA EBITA EPS of net debt to DPS margin EBITDA £650.3M £64.7M 9.9% 16.4p £447.7M 6.7p Continuing to invest in long-term drivers of growth
Slide 5: GB soft drinks market grew, but was deflationary
GB soft drinks market grew, but was deflationary Deflationary consumer pricing in soft drinks in 20151 Take Home Soft Drinks Market3 Apr-15 Volume +2.4%, Value +0.5% Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Negative price/mix -1.9% Consumer Spend Growth/Decline Year on Year2 Market growth continued
Slide 6: Soft drinks market in France was subdued, whilst Ireland improved
Soft drinks market in France was subdued, whilst Ireland improved France Ireland YTD Value +0.6%, volume -0.2% Value +1.1%, volume +2.9% Q2 Value -1.4%, volume -2.4% Carbs value -2.9%, stills value +5.0% Syrups and kids drinks Growth led by plain water and juice categories grew value ahead of
Slide 7: GB Stills
GB Stills 2015 2014 % £m £m change Volume 184.5 189.6 (2.7) ARP per litre 86.9p 88.3p (1.6) Revenue 160.3 167.4 (4.2) Brand contribution 76.2 82.9 (8.1) Brand margin % 47.5% 49.5% (200)bps Major innovation and brand Competitive squash investment, will benefit category impacted in H1 revenue from H2
Slide 8: GB Carbonates
GB Carbonates 2015 2014 % £m £m change Volume 616.7 616.7 0.0 ARP per litre 46.5p 46.1p 0.9 Revenue 286.8 284.6 0.8 Brand contribution 113.1 104.8 7.9 Brand margin % 39.4% 36.8% 260bps Strong performance in a Margin benefits from competitive environment and improved pack mix lapping revenue +6.8% LY
Slide 9: France
France 2015 2014 % % constant £m £m change currency Volume 142.6 141.5 0.8 0.8 ARP per litre 83.1p 90.0p (7.7) 0.7 Revenue 118.5 127.4 (7.0) 1.5 Brand contribution 34.0 30.3 12.2 22.3 Brand margin % 28.7% 23.8% 490bps 490bps Strong branded revenue Value share growth growth offset by decline in all b
Slide 10: Ireland
Ireland 2015 2014 % % constant £m £m change currency Volume 103.0 99.5 3.5 3.5 ARP per litre 50.2p 53.1p (5.5) 0.8 Revenue 61.7 64.2 (3.9) 2.5 Brand contribution 22.1 21.0 5.2 13.9 Brand margin % 35.8% 32.7% 310bps 360bps Building momentum with Volume and value growth second quarter of ahead of the
Slide 11: International
International 2015 2014 % % constant £m £m change currency Volume 17.8 20.5 (13.2) (13.2) ARP per litre 129.2p 132.2p (2.3) 1.5 Revenue 23.0 27.1 (15.1) (11.9) Brand contribution 8.0 10.7 (25.2) (23.1) Brand margin % 34.8% 39.5% (470)bps (500)bps One-off impact due to move Continued in-market progre
Slide 12: A&P and Overheads
A&P and Overheads 2015 2014 AER % £m £m change Embedded a “cost conscious” culture Total A&P spend (35.4) (30.9) (14.6) A&P % revenue 5.5% 4.7% (80)bps On-track with delivery of (5.1) £30m cost savings Non-brand A&P (5.4) (5.9) Fixed supply chain (49.3) (54.5) 9.5 Selling costs (64.0) (65.6) 2.4 Inv
Slide 13: EBIT to Earnings
EBIT to Earnings 2015 2014 % % Interest down £m £m change constant following currency successful EBIT 63.2 59.0 7.1 6.4 bank refinancing Interest (12.2) (13.7) 10.9 10.3 Profit before tax 51.0 45.3 12.6 11.4 Strong Tax (12.0) (11.3) (6.2) (6.2) leverage through the P&L to earnings Effective tax rate
Slide 14: Cash flow and net debt
Cash flow and net debt 2015 £m 2014 £m EBIT 63.2 59.0 Depreciation and amortisation 22.3 23.6 EBITDA 85.5 82.6 £31.7m reduction in adjusted net debt, Working capital (42.4) (55.8) 0.4x reduction in leverage Capital spend (22.0) (23.4) Pension contributions (20.8) (20.8) Other spend (31.8) (13.4) Cap
Slide 15: 2015 guidance remains unchanged
2015 guidance remains unchanged Markets conditions remain challenging More favourable raw material cost environment, enabling further investment in long-term growth drivers – A&P, Innovation and International business unit Effective tax rate of 23.5% to 24.0%, coupon interest rate of 5.0% to 5
Slide 16: Summary - continued momentum in creating shareholder value
Summary - continued momentum in creating shareholder value Continued strong earnings growth in challenging trading conditions Deleveraging the balance sheet and strong cash flow generation to deliver superior shareholder returns Major marketing campaigns and innovations launched will benefit r
Slide 17: Simon Litherland, Chief Executive Officer
Simon Litherland Chief Executive Officer 17
Slide 18: Agenda
Agenda Executing our strategy – two years of strong progress Focused on delivering future growth Growing our portfolio of leading brands Investing to realise our international ambitions Summary 18
Slide 19: Executing our strategy – two years of strong progress
Executing our strategy – two years of strong progress 19
Slide 20: We have made strong progress in the last two years
We have made strong progress in the last two years Leverage portfolio Global opportunities Culture & efficiency Trust & respect Invested in innovation Established Completed bulk of Achieved 2 star and marketing International business programme to deliver “Business In The unit £30m cost savings Commu
Slide 21: This has translated to a very strong 2 year financial performance
This has translated to a very strong 2 year financial performance EBITA EBITA EPS DPS +20.3% MARGIN +30.3% +24.1% +140BPS NET FCF INTERNATIONAL NET DEBT DEBT/EBITDA GENERATION FRUIT SHOOT DOWN 11.1% down 0.7X £185.3M REVENUE + 33% Source: Britvic interim results 2013 to 2015 and management data 21
Slide 22: Focused on delivering future revenue and profit growth
Focused on delivering future revenue and profit growth Revenue & margin accretion through growth of our owned-brand portfolio Launch margin-enhancing innovation that drives category growth Continue to eliminate unnecessary cost through a cost conscious culture Private Label > Bottlers > Brand
Slide 23: Growing our portfolio of leading brands
Growing our portfolio of leading brands 23
Slide 24: An extensive marketing and innovation programme in 2015
An extensive marketing and innovation programme in 2015 TO DELIVER GROWTH IN THE SECOND HALF 24
Slide 25: We have a clear framework to deliver long-term growth in dilutes
We have a clear framework to deliver long-term growth in dilutes DELIVER QUALITY CREATE DELIVER SOLUTIONS DELIVER SHOPPER PRODUCTS ‘WORTH EXCITEMENT FOR WHICH CREATE NEW ENGAGEMENT PAYING MORE FOR’ KIDS & ADULTS OCCASIONS 25
Slide 26: We began the journey with Squash'd and Teisseire
We began the journey with Squash’d and Teisseire Launched “on-the-go” consumption solutions “Squash’d” in GB and Ireland, Teisseire “MIX & GO” in mainland Europe New flavours to extend consumer appeal Opportunity to capitalise on growth of plain water category Extended into mixing with alc
Slide 27: Now we are rejuvenating Robinsons to drive long-term growth
Now we are rejuvenating Robinsons to drive long-term growth Reformulated to create the best tasting liquid and deliver significant taste preference versus competitors Adding 4 exciting new flavours to the range that tap into emerging flavour trends Compelling pack design that creates stronger
Slide 28: World class consumer and shopper engagement
TV OUTDOOR DIGITAL World class In-store sampling consumer and Social Media shopper engagement Retailer online In-store POS 28
Slide 29: Communicating our health credentials
Communicating our health credentials 29
Slide 30: Investing to realise our international ambitions
Investing to realise our international ambitions 30
Slide 31: Fruit Shoot in the USA
Fruit Shoot in the USA Single-serve momentum continues Every region delivered Fruit Shoot #2 in the category single-serve value share growth. Total Share by region continued to grow share up 240bps vs LY In-market sales up circa 1/3 on last year Potential for strong future growth Optimis
Slide 32: Summary
Summary A strong first half performance and confident in our second half plans Great progress executing our strategy Investing in the long-term drivers of revenue growth Confident of continued margin and profit progression Driving improved shareholder returns
Slide 33: Appendix
Appendix 33
Slide 34: Exceptional costs and other items
Exceptional costs and other items Item 2015 £M Financial derivatives 0.8 Strategic cost programme related (3.3) Gain on held for sale property in Northern Ireland 0.8 Gain on disposal of impaired assets 0.4 Total (1.3) Cash impact £0.2m 34