Britvic — H1 2008 Earnings Presentation
39 slides from Britvic's earnings presentation, 2008
Slide 1: Britvic Interim Results
\I BRITVIC INTERIM RESULTS
Slide 2: Gerald Corbett, Chairman
\I BRITVIC GERALD CORBETT airman
Slide 3: John Gibney, Finance Director
JOHN GIBNEY Finance Director 3
Slide 4: Financial Headlines
Financial Headlines H108 H107 % £’m £’m change Revenue 454.7 353.6 28.6 EBIT 31.4 24.2 29.8 EBIT Margin 6.9% 6.8% 10bps Profit after tax 13.0 10.9 19.3 Free cash flow (10.5) (12.2) 13.9 Net debt (453.8) (309.8) (46.5) Basic earnings per share 6.1p 5.0p 22.0 Dividend per share 3.8p 3.3p 15.2 Strong c
Slide 5: Summary H108 – EBIT
Summary H108 – EBIT H108 H107 % change £’m £’m Branded Volume (million litres) 834.4 696.2 19.9 Branded ARP 51.0p 50.8p 0.4 Total Revenue 454.7 353.6 28.6 Brand Contribution 176.1 148.0 19.0 Non-brand A&P (4.5) (4.4) (2.3) Fixed Supply Chain (46.9) (34.2) (37.1) Selling Costs (53.1) (46.5) (14.2) Ov
Slide 6: Stills
Stills INT'NAT H108 H107 % Change IRELAND 2.5 33.3 £’m £’m Volume (million litres) 232.0 219.0 5.9 STILLS ARP per litre (pence) 69.7 71.9 (3.1) 70.2 Revenue 161.8 157.4 2.8 Brand Contribution 70.2 72.2 (2.8) CARBS 70.1 Brand Contribution Margin 43.4% 45.9% (2.5)%pts Brand Contribution (£m) Strong vo
Slide 7: Carbonates
Carbonates INT'NAT H108 H107 % Change IRELAND 2.5 STILLS 33.3 70.2 £’m £’m Volume (million litres) 461.0 460.0 0.2 ARP per litre (pence) 40.2 40.1 0.2 Revenue 185.4 184.6 0.4 CARBS 70.1 Brand Contribution 70.1 72.7 (3.6) Brand Contribution Margin 37.8% 39.4% (1.6)%pts Brand Contribution (£m) Margi
Slide 8: Britvic Ireland
Britvic Ireland INT'NAT FY to Feb 2.5 STILLS H108 70.2 07 £’m £’m IRELAND 33.3 Volume (million litres) 129.8 266.0 ARP per litre (pence) 54.1 54.0 Revenue 99.5 208.1 CARBS Brand Contribution 33.3 74.0 70.1 Brand Contribution Margin 33.5% 35.6% Brand Contribution (£m) Fixed Costs 29.0 60.0 EBIT 4.3 1
Slide 9: International
International INT'NAT H108 H107 % Change IRELAND 2.5 STILLS £’m £’m 33.3 70.2 Volume (million litres) 11.6 9.9 17.2 ARP per litre (pence) 69.0 68.7 0.4 Revenue 8.0 6.8 17.6 Brand Contribution 2.5 1.0 150.0 CARBS 70.1 Brand Contribution Brand Contribution Margin 31.3% 14.7% 16.6%pts (£m) Brand Contri
Slide 10: Overheads and other costs
Overheads and other costs H108 (GB H108 H108 H107 % Change & Int’l) (Ireland) (group) (GB & Int’l) (GB & Int’l) £’m £’m £’m £’m Non-brand A&P (4.5) 0.0 (4.5) (4.4) (2.3) Total A&P spend (25.0) (4.1) (29.1) (24.3) (2.9) A&P as a % of net 7.0% 6.2% 6.8% 6.9% 10bps branded revenue Fixed Supply Chain (3
Slide 11: EBIT to Earnings
EBIT to Earnings H108 H107 % Change £’m £’m EBIT 31.4 24.2 29.8 Interest (14.2) (9.0) (57.8) Profit before tax 17.2 15.2 13.2 Tax (4.2) (4.3) 2.3 Tax rate 24.1% 28.2% Profit after tax 13.0 10.9 19.3 Progressive earnings growth Note: all numbers are before exceptional costs 11
Slide 12: Exceptional Items
Exceptional Items H108 £’m Cash items Restructuring costs 3.9 Acquisition costs 2.1 Share items Transitional Share Awards 1.7 Non-cash items Returnable bottle impairment 0.7 IT equipment impairment 1.7 Total exceptional items 10.1 Total exceptional items after tax 8.1 12
Slide 13: Cashflow
Cashflow H108 H107 % change £m £m Operating Profit pre-exceptionals 31.4 24.2 29.8 Depreciation & Amortisation 23.8 24.0 (0.8) EBITDA 55.2 48.2 14.5 Working capital (31.4) (16.5) (90.3) Capital Expenditure (12.1) (14.3) 15.4 Pension Contribution (10.0) (10.0) 0.0 Other (12.2) (19.6) 37.8 Free Cash F
Slide 14: Guidance FY08
Guidance FY08 Additional revenue: Total innovation this year, including V Water, to add ~1% of GB revenue 3-4m litres of incremental volume this year from new M&B contract FY07 poor summer weather: Estimated EBIT impact on FY07 of £6m (15m litres in stills; 10m litres in carbonates) Reduced
Slide 15: Summary
Summary Track record of growth continues in: Volumes Revenue EBIT Free cashflow Earnings Dividends We recognise: A challenging Licensed On-Premise environment Continuing pressures in raw materials H2 growth driven by: Our innovation and product launch programme Stills category re
Slide 16: Paul Moody, Chief Executive
PAUL MOODY Chief Executive 16
Slide 17: Agenda
Agenda z Market update and current trading z Changes in consumer demands z Driving profitable revenue Core brands Britvic International z Britvic Ireland z Efficiency and responsibility z Summary 17
Slide 18: GB Stills Market Volume
GB Stills Market Volume 000's Litres Easter 2005/06 2006/07 2007/08 120,000 100,000 80,000 60,000 40,000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Recategorisation of Sports drinks into Stills masks poor summer 07 effect Source: AC Nielsen Scantrack April 2008: Take Home 18
Slide 19: GB Stills Market Volume – excluding sports drinks
GB Stills Market Volume – excluding sports drinks 000's Litres Easter 2005/06 2006/07 2007/08 Oct Nov Dec Jan Feb Mar Apr Excluding sports drinks the poor weather effect is clearly visible Source: AC Nielsen Scantrack April 2008: Take Home 19
Slide 20: GB Carbonates Market Volume
GB Carbonates Market Volume 000's Litres Easter 2005/06 120,000 2006/07 2007/08 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 Oct Nov Dec Jan Feb Mar Apr Consistent growth of carbonate volumes throughout H1 Source: AC Nielsen Scantrack April 2008: Take Home 20
Slide 21: GB Soft Drinks Market Volume
GB Soft Drinks Market Volume 000's Litres Easter 2005/06 2006/07 220,000 2007/08 200,000 180,000 160,000 140,000 120,000 100,000 80,000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Benefit from Easter dynamic not felt this year Source: AC Nielsen Scantrack April 2008: Take Home 21
Slide 22: Relative Size of Categories & Growth – H108
Relative Size of Categories & Growth – H108 2.0% 6.2% 4.0% -10.5% 0.4% -3.2% -3.6% -0.5% -2.1% 25.5% 20.3% 20.6% -4.0% 0.1% 12.6% -2.5% -2.0% -2.2% -1.7% -1.7% -3.5% -3.5% 7.6% 2.8% 3.8% -1.4% -1.9% -1.6% -17.9% -3.9% -7.9% -3.9% -3.9% 29.5% 29.5% 2.4% 2.4% Diet/Low Cal 9.2% Regular / Full Sugar Imp
Slide 23: Changes in consumer demands present opportunities
Changes in consumer demands present opportunities Point of Consumption Deferred/At Home On The Go On-Premise Consumer Drivers z More consumption points z Healthy choice z Quality choice z Price sensitivity z Chilled convenience z Families and food z Health and wellbeing z Premiumisation z Premiumisa
Slide 24: Driving Profitable Revenue: Pepsi
Driving Profitable Revenue : PEPSI z Competitive market place dominates Q1 Pepsi focus on value resulted in some loss in share Pepsi volume growth of 8.2% against cola market growth of 3.1% while maintaining value out- performance during last 12 weeks of the period* z Key drivers of performance
Slide 25: The World's Number One Sports Drink
The World’s Number One Sports Drink z Meeting our expectations Rate of Sale Distribution z Wide distribution due to: Power of the Gatorade brand in the trade Our ability to get products into store quickly and efficiently z Customer response very positive Gatorade seen as having a high late
Slide 26: Fourth EBA with Pepsi – V Water
Fourth EBA with Pepsi in a high growth category – V WATER z Pepsi acquires V Water Products are made with spring water with no artificials A focus on vitamins, herbs and hydration 6 variants in 500ml PET packs z Britvic signs a 15-year EBA to 2023 Develops our presence in the water plus cate
Slide 27: Driving Profitable Revenue: Robinsons
Driving Profitable Revenue : ROBINSONS z Robinsons Squash strong performance against the market 3.7% growth against a squash category decline of (1.6%)* z Key drivers of performance Impact from the ‘no artificial colours or flavours’ core range review Successful first year of BBC Sports Person
Slide 28: Driving Profitable Revenue: Robinsons Fruit Shoot
Driving Profitable Revenue : ROBINSONS FRUIT SHOOT z Fruit Shoot – in more households than any other kids’ brand 15.1% growth against the juice drinks category growth of 3.8%* all-time highest penetration - over 5%pts ahead of closest competitor z Key drivers of performance Increased penetrati
Slide 29: Driving Profitable Revenue: Britvic J2O
Driving Profitable Revenue : Britvic J20 z J2O maintains its leading position Growth of 7.5% against juice drinks category growth of 3.8%* z Key flavour and format innovation contributing to strong performance Continued roll out of PET pack Large packs for in-home hosting occasions – 12 pack d
Slide 30: Driving Profitable Revenue: Fruit Shoot H2O
Driving Profitable Revenue : Fruit Shoot H2O z Fruit Shoot H2O achieves highest ever share of the kids’ water plus market, at 55.1% Growth of 9.6% against water plus category decline of 7.8%* z Key drivers of performance Continuing to maximise distribution A positive response to the current ma
Slide 31: Driving Profitable Revenue: Drench & Pennine Spring
Driving Profitable Revenue : Drench & Pennine Spring z Strong performance against the plain water market Drench growth of 102.4% and Pennine Spring growth of 3.0% against a market decline of 3.5%* z Drench – a unique ‘mental hydration’ positioning Increased distribution Scale launch into groce
Slide 32: Britvic International
Britvic International z Strong growth and increased investment in the Nordic region Revenue growth of 95% in the period New listing for Robinsons increases distribution to 75% Launch of natural premium squash in Denmark z Fruit Shoot continues to deliver double digit growth in Holland New tr
Slide 33: Changes in consumer demands present opportunities
Changes in consumer demands present opportunities Point of Consumption Deferred/At Home On The Go On-Premise Consumer Drivers z Healthy choice z Quality choice z More consumption points z Price sensitivity z Chilled convenience z Families and food z Health and wellbeing z Premiumisation z Premiumisa
Slide 34: Ireland - Relative Size of Categories and Growth
Ireland - Relative Size of Categories and Growth Cola +2.8% Carbs Lemon / Lime -1.4% Fruit Carbs -3.2% Water +10.2% Energy +8.8% -1.9% Stills Cordials Sports +17.0% Mixers +0.6% 0 50,000 100,000 150,000 200,000 000's Litres Combining GB and Irish brands to create a powerful portfolio in a growing ma
Slide 35: Britvic Ireland – Driving Performance
Britvic Ireland – Driving Performance z Key drivers of performance Continued growth of Ballygowan – the number one water brand Further growth of Energise Sport Strong 7UP performance in both Grocery and Licensed On-Premise J2O launch achieving distribution targets z Strong plans for H208 onw
Slide 36: Britvic Ireland – Transition and Synergies
Britvic Ireland – Transition and Synergies z Britvic Ireland transition on track z We are very confident in the estimated annual (pre tax) synergies of €14m Will deliver one third this year, as per guidance FY08 revenue growth on target Cost synergies H2 efficiency projects Fleet, energy a
Slide 37: Efficiency and responsibility are part of our culture
Efficiency and responsibility are part of our culture z Supply chain capacity continuously reviewed Factory closure in Cork Proposed factory closure in Hartlepool z Environmental actions taken* WASTE TO LANDFILL WATER ENERGY EFFLUENT EMISSIONS CO2 EMISSIONS reduction usage usage reduction reduct
Slide 38: Summary
Summary z A resilient first half performance z Exciting innovation z Strengthened relationship with Pepsi z Britvic Ireland acquisition performing to expectations z Current trading in line with expectations Well positioned for the more important second half 38
Slide 39: Q&A
\I BRITVIC Q&A