Britvic — Non-Deal Roadshow (November 2011)
41 slides from Britvic's roadshow presentation, November 2011
Slide 1: Britvic plc Investor presentation
Britvic plc Investor presentation 1
Slide 2: The Britvic investment case
The Britvic investment case Britvic is a leading European branded soft drinks business GB £50-55mTRACK A STRONG STRONG MARKET AN EVER-EXPANDING POSITIONS IN 24-YEAR RELATIONSHIP France €12m RECORD A RESILIENT CATEGORY WITH PEPSICO OF GROWTH Ireland €8m #2 in British branded soft drinks A number of b
Slide 3: A strategy for organic growth
A strategy for organic growth GB • Market volume growth • Innovation growing the top line • Driving on-the-go distribution • Improving ARP through revenue management France • Delivery of the €17M synergies by 2013 • Innovation growing the top line • Exploiting group brands and capability • Launching
Slide 4: Market performance 2011
Market performance 2011 Take-home Grocery Pubs & clubs market volume market volume market volume growth decline decline of 2.2% of 2.6% of 2.2% Take-home Pub & club Take-home market value market volume market volume growth decline growth of 4.3% of 8.7% of 0.8% Source: IRI Census September 2011 Niel
Slide 5: A strategy for international expansion
A strategy for international expansion International • Building the European footprint through the acquisition of assets •Franchising the Britvic-owned brands •Continued collaboration with PepsiCo 5
Slide 6: Britvic-owned brands with global appeal
Britvic-owned brands with global appeal 6
Slide 7: Building momentum in current franchise markets
Building momentum in current franchise markets Volume up 32% Vs LY Available in 2,800 C&G outlets Available in over 2,200 outlets Distribution growth in grocery and foodservice Already the number 2 with 17% market share 1 Expanding its presence in impulse Source: Nielsen Grocery September 2011 7
Slide 8: Major new developments in the US
Major new developments in the US New distribution agreement with Gross & Jarson Launched in Kentucky Summer 2011 Long-term distribution agreement now in place North American manufacture to begin H2 2012 Able to supply other US bottlers and support expansion plan Wholly-owned manufacturing, sales and
Slide 9: Franchise growth guidance
Franchise growth guidance Move to local manufacture creates a new landscape • Transition to a “concentrate” model; revenue versus margin dynamic changes • Single-serve remains the focus • PBV able to supply other US bottlers • Medium to long-term opportunity is material International revenue guidanc
Slide 10: Group performance
Group performance +14.6% +4.3% (110)bps £59M (8.2)% +6.0% FCF Group Group Group Continued Adjusted Continued revenue EBITA EBITA cash EPS dividend generation margin growth EBITA is defined as operating profit before exceptional and other items and amortisation. In a change to last year only amortisa
Slide 11: Cashflow
Cashflow 2011 2010 % £’m £’m Change EBIT 135.0 134.6 0.3 Depreciation & amortisation 50.7 44.3 (14.4) EBITDA 185.7 178.9 3.8 Working capital (13.5) (11.1) (21.6) Capital expenditure (49.0) (45.3) (8.2) Pension contributions (11.4) (13.2) 13.6 Other (52.5) (41.5) (26.5) Underlying free cashflow 59.3
Slide 12: Britvic GB Pension scheme
Britvic GB Pension scheme • Agreement reached for payments by end of each calendar year of: • 2011 - £10m : 2012 - £12.5m : 2013 -17 inc. £20m p.a • This includes the income from a Pension Funding Partnership (PFP) which will continue to 2026 • Subject to triennial valuation • The PFP is an asset-ba
Slide 13: Guidance
Guidance Revenue Cost Capital Minimum ARP growth Raw material inflation GB £50-55m of 1% of mid-single digit France €12m Ireland €8m Premium categories PVO saving of £8m under continued pressure Other A&P maintained at 5% of revenue Innovation adds 1-2% Progressive to the top line dividend policy In
Slide 14: Markets Summary
Markets Summary Strong brands in a resilient category Resilient underlying growth Maintaining price discipline Exciting International developments 14
Slide 15: Appendix
Appendix Owes © ae
Slide 16: The ADR programme
The ADR programme Britvic’s shares trade on the US Over the-counter market under the following information ADR benefits to US investors: Symbol BTVCY ADRs give access to cross‐border CUSIP 111190104 market liquidity ADRs are cost‐effective Ratio 1 ADR : 2 ORD Country UK ADRs are convenient to ow
Slide 17: 2011 Innovation
2011 Innovation Another year of successful innovation 17
Slide 18: Business highlights
Business highlights • Both Teisseire and Moulin De Valdonne grew value share • Successful sponsorship of the Tour de France 18
Slide 19: Business highlights
Business highlights • On-the-go strategy builds momentum • “Reward Your Thirst” programme achieving record levels of consumer engagement • Available across the single-serve portfolio • Growing our market share in single-serve 19
Slide 20: Business highlights
Business highlights • Share of total GB carbonates grew by 20bps • Pepsi held GB value share in a competitive market • Mountain Dew builds momentum in GB 20
Slide 21: Q1 activity
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Slide 22: The dilutables market is Global BUT diverse
The dilutables market is Global BUT diverse • Mixing with water is a concept consumers are familiar with across the world • Squash • Syrups • Powders • Cordials • Market value of $16bn 22
Slide 23: Fruit Shoot a growing European footprint
Fruit Shoot a growing European footprint Ireland Netherlands France The number 2 kids A top 5 kids number 1 ROS soft-drink brand soft-drink brand where sold* Listed in McDonalds Doubled in size Major marketing plan Summer 2011 in the last 3 years to build the brand 23
Slide 24: Scale of US opportunity
Scale of US opportunity • Current focus is to build the brand credentials in the “impulse” channels • Available in excess of 5,000 outlets currently • Agreements to date create access to consumers in 6 states • Total US population 310m, and growing • Juice drinks category worth in excess of $5.4bn •
Slide 25: Market positions
Market positions GB Take-Home £6.8bn Ireland Grocery €473m France Juice €1.2bn GB Pubs & Clubs £2.7bn Ireland Licensed €306m France Syrups €249mn Source: Nielsen GB take-home scantrack October 2011. CGA pubs and clubs August 2011. Nielsen ROI grocery scantrack October 2011. Nielsen ROI licensed Sept
Slide 26: Carbs: 2011 GB soft drinks market
2011 GB soft drinks market Value Volume Cola Carbs Fruit carbs Value Lemonade Carbonates + 8.9% Non-fruit Stills + 3.1% Glucose/Stims Mixers Plain water Value growth benefited Stills Water plus from Jan 2011 VAT Juice drinks increase Pure juice Sports Squash Cold "Hot" Drinks Smoothies Dairy 0 250,0
Slide 27: Carbs: 2011 Ireland soft drinks market
2011 Ireland soft drinks market Value Volume Carbs Cola Lemon & Lime Value Carbonates + 1.8% Citrus Stills - 6.7% Other carbs Mixers Energy Stills Mineral water No improvement in Dilutes latest 12 or 4 weeks Sports Fruit juice Juice drinks 0 35,000,000 70,000,000 105,000,000 140,000,000 Volume decli
Slide 28: Carbs: 2011 France soft drinks market
2011 France soft drinks market Value Volume Carbs Cola Limonades tonics limes Fruit drinks Value Energy Carbonates + 4.4% Carbonated Water Stills + 4.3% Iced Tea Stills Fruit juice Fruit drink All key categories Sport in growth Dilutables Flavoured water Water Plain water volume +2bn o 0 500,000,000
Slide 29: Group financial headlines
Group financial headlines % Change constant 2011 2010 % currency £’m £’m Change Group Revenue 1,290.4 1,121.1 15.1 14.6 Group EBITA 138.1 131.8 4.8 4.3 Group EBITA Margin 10.7% 11.8% (110)bps (110)bps Group Profit After Tax 77.9 76.8 1.4 0.9 Underlying Free Cashflow* 59.3 67.8 (12.5) - Group Adjuste
Slide 30: GB stills
GB stills 2011 2010 % £’m £’m Change Volume (m. litres) 493.5 514.4 (4.1) ARP per litre (pence) 71.2p 70.5p 1.0 Revenue 351.2 362.7 (3.2) Brand contribution 150.1 169.0 (11.2) Brand contribution margin 42.7% 46.6% (390)bps ARP growth constrained Significantly by product and impacted by raw material
Slide 31: GB carbonates
GB carbonates 2011 2010 % £’m £’m Change Volume (m. litres) 1,130.5 1,097.4 3.0 ARP per litre (pence) 44.5p 42.7p 4.2 Revenue 502.6 468.4 7.3 Brand contribution 189.1 183.5 3.1 Brand contribution margin 37.6% 39.2% (160)bps Grew market value share Strong ARP growth of total carbonates Note: All numb
Slide 32: France
France 12 months 4 months 2011 2010 £’m £’m Volume (m. litres) 286.0 104.5 ARP per litre (pence) 85.6p 81.5p Revenue 244.7 85.2 Brand contribution 62.0 24.1 Brand contribution margin 25.3% 28.3% High single digit Strong launch of revenue growth Teisseire Fruit Shoot Note: All numbers are pre-excepti
Slide 33: Ireland
Ireland % Change constant 2011 2010 % currency £’m £’m Change Volume (m. litres) 210.8 229.1 (8.0) (8.0) ARP per litre (pence) 58.7p 58.4p 0.5 0.0 Revenue 162.8 179.0 (9.1) (9.6) Brand contribution 57.8 64.1 (9.8) (9.8) Brand contribution margin 35.5% 35.8% (30)bps (10)bps Revenue down as ARP flat a
Slide 34: International
International 2011 2010 % £’m £’m Change Volume (m. litres) 37.8 35.0 8.0 ARP per litre (pence) 77.0p 73.7p 4.5 Revenue 29.1 25.8 12.8 Brand contribution 10.9 9.0 21.1 Brand contribution margin 37.5% 34.9% 260bps Established franchises Maintained double-digit building momentum revenue growth Note: A
Slide 35: A&P and fixed costs
A&P and fixed costs 2011 2010 % £’m £’m Change Total A&P spend 62.8 56.7 (10.8) A&P as a % of revenue 5.0% 5.3% (30)bps Non-brand A&P 8.0 10.4 23.1 Fixed supply chain 111.1 94.9 (17.1) Selling costs 121.7 116.2 (4.7) Overheads & other 94.1 98.6 4.6 TOTAL FIXED COSTS 334.9 320.1 (4.6) Full year of fi
Slide 36: EBIT to earnings
EBIT to earnings 2011 2010 % £’m £’m Change EBIT 135.0 129.6 4.2 Interest (29.9) (25.0) (19.6) Profit before tax 105.1 104.6 0.5% Tax (27.2) (27.8) 2.2 Effective tax rate 25.9% 26.6% 70bps Profit after tax 77.9 76.8 1.4 Interest Interest increase increase due due Effective Effective tax tax rate rat
Slide 37: Exceptional and other items
Exceptional and other items £’m Net pension curtailment gain 13.2 Group data centre outsourcing (3.9) Vending operation outsourcing (6.5) Restructuring costs (14.6) Fair value movement of financial instruments (10.6) Refinancing fees write-off (1.5) Head office relocation (1.3) Total exceptional and
Slide 38: GB Britvic Pension scheme
GB Britvic Pension scheme 2 • 15 year pension funding partnership expected in place by end of calendar year • Trustees will have an interest in a limited partnership • Intended to give income of a minimum of £5m pa to the Pension Plan • Final payment of up to £105m depending on funding position in 2
Slide 39: Debt refinancing
Debt refinancing Revolving Credit Facility US Private Placement • New £400M RCF agreed • £490m of USPP notes • £229m raised in Feb 2007 • Matures March 2016 • £149m raised in Dec 2009 • £113m raised in Dec 2010 • 6 out of 7 banks retained • Swapped to fixed & floating sterling & euros • Dec 2010 iss
Slide 40: FY 2011 debt structure
FY 2011 debt structure Facility Size Maturities Drawing Headroom (£m) (£m) (£m) Bank Loans 400.0 2016 ‐ 400.0 US PP Issued 2007 228.5 2014, 2017, 2019 228.5 - US PP Issued 2009 149.8 2014, 2016, 2017, 2019 149.8 - USPP Issued 2010 113.0 2017, 2020, 2022 113.0 - (Cash)/Overdraft/Other ‐ - (39.3) 39.3
Slide 41: Debt repayment profile
Debt repayment profile Bank Facilities USPP 41