Nichols Plc · LSE:NICL
Nichols — FY2023 Earnings Presentation
33 slides from Nichols's earnings presentation, March 2024
Slide 1: Full Year 2023
FULL YEAR 2023 PRESENTED MARCH 2024
Slide 2: Welcome to our Full Year Presentation
W elcome TO OUR FULL YEAR PRESENTATION Full Year 2023 Presentation | March 2024 | 2
Slide 3: Agenda
AGENDA ANDREW MILNE CHIEF EXECUTIVE OFFICER STRATEGIC & OPERATIONAL REVIEW 2023 DAVID TAYLOR INTERIM CHIEF FINANCIAL OFFICER FINANCIAL REVIEW 2023 ANDREW MILNE CHIEF EXECUTIVE OFFICER LOOKING AHEAD – FOCUS FOR 2024 Full Year 2023 Presentation | March 2024 | 3 3
Slide 4: 2023 Highlights
2023 HIGHLIGHTS • Adjusted PBT above expectations +8.7% vs FY22 • Strong sales growth delivered on total Packaged business +6.1% vs FY22 • Continued momentum in International Packaged business +16.8% vs FY22 • Accelerated bottom line value from our Out of Home (“OoH”) business post strategic review
Slide 5: Our Strategy
OUR STRATEGY ACCELERATE GROWTH IN OUR PACKAGED BUSINESS AND DRIVE BOTTOM LINE VALUE FROM OUR OUT OF HOME BUSINESS Accelerating organic growth through core brands, categories, channels and geographies GROWTH PILLARS Driving incremental growth through innovation, acquisition and geographic expansion F
Slide 6: Strategy in Action: More from the Core
STRATEGY IN ACTION: MORE FROM THE CORE INTERNATIONAL PACKAGED – AFRICA INTERNATIONAL PACKAGED – MIDDLE EAST UK PACKAGED • Growth in Africa of +17.6% vs FY22 • Growth in Middle East of +10.3% vs FY22 • Growth in UK of +1.3%, highest ever brand value £107m1 • +70% growth in last 5 years • Celebrated 1
Slide 7: Strategy in Action: Thirst for New
STRATEGY IN ACTION: THIRST FOR NEW INTERNATIONAL PACKAGED – AFRICA INTERNATIONAL PACKAGED – MIDDLE EAST UK PACKAGED • New partner in key West African market of Ivory Coast • Focus on driving year round consumption • Innovation is vital to drive growth in UK • Exceptional growth delivered in FY23 • S
Slide 8: Strategy in Action: Fuel for Growth
STRATEGY IN ACTION: FUEL FOR GROWTH OUT OF HOME BUSINESS TRANSFORMATION OPERATIONAL CHANGE PROGRAMME • Focus on driving bottom line contribution +43% vs FY22 • Business transformation programme underway • Enhanced procurement team to drive buying efficiencies • Strategic review actions implemented w
Slide 9: Strategy in Action: Happier Future
STRATEGY IN ACTION: HAPPIER FUTURE EVERYONE MATTERS PRODUCTS WE’RE PROUD OF OWNING OUR CLIMATE IMPACT • Employee Wellbeing Forum • DRS Scotland & UK • Reduction of Scope 1 & 2 carbon impact by 30% in UK vs 25% target 2025 • Community partnerships • Vimto Zero Middle East • SBTI medium term targets a
Slide 10: Financial Review
F inancial REVIEW Full Year 2023 Presentation | March 2024
Slide 11: Highlights
HIGHLIGHTS 1 Excluding exceptional items 2 Free Cash Flow is the net increase in cash and cash equivalents before acquisition funding and dividends 3 Adjusted return on capital employed is the adjusted operating profit divided by the average period-end capital employed Full Year 2023 Presentation |
Slide 12: Revenue
REVENUE 1.1 1.7 3.3 170.7 • Revenue +3.5% at £170.7m (2022: £164.9m) 1.2 (1.5) 164.9 • Overall Packaged business revenue increased by +6.1% - International Packaged revenue increased by +16.8% with double digit growth in all geographic segments - ME +10.3% at £13.0m £m - Africa +17.6% at £22.2m - RO
Slide 13: Adjusted PBT
ADJUSTED PBT • Adjusted Profit before Tax +8.7% to £27.2m 1.1 1.6 27.2 • Gross Profit of £72.2m (2022: £71.0m) 1.2 - Price increases to recover significantly higher material input costs 25.0 early in the year where we were unable to mitigate these costs (1.7) • Gross Margin of 42.3% (2022: 43.1%) -
Slide 14: Segmental Reporting
SEGMENTAL REPORTING Packaged Regions • Revised segmental disclosure for FY23 Total Out of Total UK International Packaged Home Central Group - Identifying operating profit arising from our Packaged and OoH 2023 £m £m £m £m £m £m businesses alongside shared Central expenses Continuing operations Reve
Slide 15: PBT - Exceptionals
PBT - EXCEPTIONALS • Total Exceptional costs £2.9m (2022: £11.1m) £m Out of Home Strategic Review and Restructuring 1.8 • Out of Home Strategic Review and Restructuring £1.8m - Implementation of 2022 Strategic Review Business Change Programme and Systems Development 1.7 - Costs incurred to restructu
Slide 16: Net Assets and Capital Employed
NET ASSETS AND CAPITAL EMPLOYED 24.7 0.4 2.0 67.0 • EBITDA £24.7m (2022: £26.9m) (10.2) (1.4) 56.3 (4.8) • Strong Free Cash Flow of £20.9m (2022: £14.6m) - Cash and cash equivalents of £67.0m (2022: £56.3m) £m • Capital expenditure at £0.5m (2022: £1.2m) - The reduction largely a result of lower inv
Slide 17: Dividend and Capital Allocation
DIVIDEND AND CAPITAL ALLOCATION • Dividend policy remains at broadly 2x cover • Adjusted Earnings per Share (basic) of 56.41p • Final dividend proposed 15.6p - Total dividend for 2023 of 28.2p - Ex-dividend date will be 21 March 2024 - Payment will be made on 2 May 2024 subject to shareholder approv
Slide 18: Looking Ahead
L ooking AHEAD Full Year 2023 Presentation | March 2024 | 18
Slide 19: Our Strategy: Focus for 2024
OUR STRATEGY: FOCUS FOR 2024 MORE FROM THE CORE THIRST FOR NEW FUEL FOR GROWTH HAPPIER FUTURE Accelerating organic growth through Driving incremental growth through Fuel growth through efficiencies and Building a happier future for people and core brands, categories, channels and innovation, acquisi
Slide 20: Strategic Focus: More from the Core
STRATEGIC FOCUS: MORE FROM THE CORE Focus for 2024: Accelerating organic growth through core brands, categories, channels and geographies DRIVING GROWTH IN AFRICA • Strong presence in vast majority of countries in West Africa - 13 • Strong growth has been delivered over the last 5 years (+70%) - pre
Slide 21: Strategic Focus: Thirst for New
STRATEGIC FOCUS: THIRST FOR NEW Focus for 2024: Innovation will play a key role in driving growth across our Packaged business in the UK and Middle East • Entering new categories and consolidating our current position will be fundamental to win in the Packaged business in the UK UK CARBONATES UK SQU
Slide 22: Strategic Focus: Thirst for New
STRATEGIC FOCUS: THIRST FOR NEW Focus for 2024: Innovation will play a key role in driving growth across our Packaged business in the UK and Middle East • Continuing to launch new flavours and drive execution of the zero ranges will increase penetration into the categories in the Middle East MIDDLE
Slide 23: Strategic Focus: Thirst for New
STRATEGIC FOCUS: THIRST FOR NEW Focus for 2024: Driving incremental growth through selective geographic expansion GEOGRAPHIC EXPANSION - AFRICA • West African stronghold has been a major driver of growth and will continue to be over the next 5 years • Present in 13 countries in West Africa - Major c
Slide 24: Strategic Focus: Thirst for New
STRATEGIC FOCUS: THIRST FOR NEW Focus for 2024: Driving incremental growth through acquisition ACQUISITION PLAN • Key part of capital allocation strategy • UK Packaged focused in line with our strategic intent - soft drinks focused • Portfolio expansion to access growth categories • More important t
Slide 25: Strategic Focus: Happier Future
STRATEGIC FOCUS: HAPPIER FUTURE Focus for 2024: Embedding our ESG principles into our everyday decision making will be fundamental to us delivering our commitments EVERYONE MATTERS PRODUCTS WE’RE PROUD OF OWNING OUR CLIMATE IMPACT • Deepening of Inclusion Plan • Squash Concentration Strategy • Inter
Slide 26: Summary and Outlook
SUMMARY AND OUTLOOK • A resilient soft drinks category • Clear and focused strategy - Accelerate growth in Packaged business - Drive bottom line value from OoH - Continued focus on driving efficiencies through Operational Change and Business Transformation • Profitable and cash generative • 2024 tra
Slide 27: Appendices
A ppendices Full Year 2023 Presentation | March 2024 | 27
Slide 28: UK Soft Drinks Market
UK SOFT DRINKS MARKET PERFORMANCE Total ‘take home’ Soft Drinks Value £11.4bn Value Volume Volume 7.5bn litres +8.4% -3.2% • A resilient soft drinks market WINNERS • Inflation driving value over volume ENERGY SPORTS COLA +4.6% • Energy consistently performing well, attracting VALUE: +15.3% +70.2% VO
Slide 29: Vimto Growing in Still Sub-Categories
VIMTO GROWING IN STILL SUB-CATEGORIES SQUASH VALUE: +2.7% +1.1% VOLUME: -7.7% -8.2% • UK Vimto Brand Value £107m - Value +1.1%, Volume -8.2% RTDs STILL JUICE • Value over volume strategy VALUE: +3.9% +2.4% VOLUME: -4.9% -11.6% • No. 2 Squash brand • 7 consecutive years of growth in Squash FLAVOURED
Slide 30: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT Audited Audited Year ended Year ended 31 December 2023 31 December 2022 £’000 £’000 Continuing operations Revenue 170,741 164,926 Cost of sales (98,565) (93,905) Gross profit 72,176 71,021 Distribution expenses (9,567) (10,677) Administrative expenses (40,323) (46,888)
Slide 31: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Audited Audited 31 December 31 December Audited Audited 2023 2022 31 December 31 December ASSETS £’000 £’000 2023 2022 LIABILITIES £’000 £’000 Non-current assets Property, plant and equipment 9,457 10,958 Current liabilities Intangibles 256 88 Trade and o
Slide 32: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS Audited Audited Year ended Year ended 31 December 2023 31 December 2022 £’000 £’000 £’000 £’000 Cash flows from operating activities Profit for the financial year 18,362 11,635 Adjustments for: Depreciation and amortisation 2,343 4,521 Impairment losses on intang
Slide 33: Laurel House, Woodlands Park, Ashton Road, Newton-Le-Willows, WA12 0HH. 01925 22 22 22 www.nicholsplc.co.uk
Laurel House, Woodlands Park, Ashton Road, Newton-Le-Willows, WA12 0HH. 01925 22 22 22 www.nicholsplc.co.uk