A.g. Barr P.l.c. · LSE:BAG
A.g. Barr P.l.c — FY2021/22 Earnings Presentation
41 slides from A.g. Barr P.l.c's earnings presentation, April 2022
Slide 1: Final Results
AG Barr plc Final Results 53 weeks ended 30 January 2022 1
Slide 2: Contents and Introductions
Contents and Introductions · Welcome and introduction · Financial review · 2021/22 execution · Future growth drivers · Summary Roger White Stuart Lorimer · Appendices Chief Finance Executive Director 2
Slide 3: Welcome and introduction
Roger White Welcome and introduction 3
Slide 4: Highlights
Highlights ∙ Excellent financial performance, generated by strong sales growth, resulting in a profit performance ahead of 2019/20 pre-Covid levels ∙ Strong trading reflecting the successful execution of our growth strategy - investing in our brands, innovation, operations and people - combined with a
Slide 5: Year in context
Year in context Operational resilience · asset-backed soft drinks supply chain provided flexibility and agility · successful navigation through supply chain challenges - particularly can and CO2 shortages · committed and flexible workforce · collaborative customer partnerships focused on maintaining c
Slide 6: Group brand performance
Group brand performance All brands in growth with core brands also ahead of pre-Covid levels : Revenue growth versus 20/21 versus 19/20 16.8% 5.5% 39.8% 26.1% 117.6% 92.1% Source: AG Barr net revenue 53 weeks ended 30 January 2022 6
Slide 7: Financial Review
Stuart Lorimer Financial Review 7
Slide 8: Profit bridge: Jan 2021 to Jan 2022
Profit bridge : Jan 2021 to Jan 2022 Reported PBT +£16.2m 20/21 Pre Exceptionals PBT £32.8m Pre Exceptionals PBT +£8.7m Underlying PBT +£10.6m 8
Slide 9: Financial scorecard
Financial scorecard January 2022 v to Jan 2021 % v Jan 2021 Case volumes (million cases) 52.0 4.0 8.4% ⬤ Net revenue (£m) 268.6 41.6 18.3% ⬤ Profit before tax and exceptionals (£m) 41.5 8.7 26.5% ⬤ Statutory profit before tax (£m) 42.2 16.2 62.3% ⬤ Gross margin before exceptional items 44.2% 2.4 pp -
Slide 10: Gross margin
Gross margin Soft Drinks : 87% of gross profit Strong performance with all brands in revenue growth - more than offsetting loss of Rockstar 2.7pp 3.9pp N/A 2.4pp Margin benefits from operational leverage, mix (return of ‘out of home’ formats) and successful innovation Funkin : 12% of gross profit Doubl
Slide 11: Operating costs and margin
Operating costs and margin Margin growth supporting the decision to increase marketing investment - despite increasing cost headwinds ∙ Enhanced marketing support behind core brands - new campaigns and upweighted digital investment ∙ Logistics and labour cost pressures increased in H2 partially miti
Slide 12: Cash flow
Cash flow *Net of cash acquired + £0.7m paid subsequent to year end. 12
Slide 13: Capital Allocation
Capital Allocation Capital expenditure Taxation M&A and Dividends - Effective Tax Rate DPS Pre Exceptionals 24.4% - No Dividend 34.7% 12.0p January 2021 January 2022 A clear prioritisation of core business optimisation, organic growth security, M&A capacity and the importance of sustainable progress
Slide 14: Balance sheet: Key ratios
Balance sheet : Key ratios Strong investment returns Substantial asset base January 2021 January 2022 Minimal pension obligations Significant funding platform 14
Slide 15: Commodities and Forex
Commodities and Forex Commodity Spend analysis Commodities ∙ Inflationary pressures accelerated in H2 driven by core commodity and energy prices ∙ Contained in 2021/22 by hedging activities and long- term supply contracts Forex Rolling hedging programme in place ∙ 2021/22 was covered with minimal P&L
Slide 16: Cost inflation and mitigation
Cost inflation and mitigation Cost inflation across key commodities, labour, and energy Mitigating actions 15.6% c.15% ∙ Commodity hedging programme - good cover on core commodities for much of 2022 ∙ Disciplined cost management - an ongoing pipeline of productivity, efficiency and product re-engineeri
Slide 17: 2022/23 Guidance
2022/23 Guidance Group revenue growth c.4-5% ∙ recognising one-off factors in 2021/22 (53rd week, on trade replenishment) Revenue ∙ revenue management actions deployed to mitigate inflationary headwinds ∙ assuming Covid restriction-free year cycling lockdown impacted Q1 2021/22 Continued investment i
Slide 18: 2021/22 execution
Roger White 2021/22 execution 18
Slide 19: Building brands and connecting with consumers
Building brands and connecting with consumers Strategic delivery - continued brand investment through a materially higher level of brand development activity and an enhanced sales execution programme IRN-BRU Rubicon Funkin Extensive marketing Innovation launches, ‘Best Served Everywhere’ campaigns i
Slide 20: Driving efficiency
Driving efficiency Our drive for long-term efficiency and effectiveness continued at pace ∙ Value optimisation programme Pipeline of product optimisation and cost reduction initiatives, now helping to mitigate higher inflation ∙ Multi-year manufacturing excellence programme - Brilliance in the Making I
Slide 21: Building trust
Building trust ✓ Hybrid ✓ Science-based ✓ 98% of portfolio ✓ Continued working targets remains financial and ✓ Mental health ✓ Net zero exempt from practical support SDIL to a wide range support commitments ✓ 98% of portfolio of charities, good ✓ Gender ✓ 100% rPET first causes and balance and product
Slide 22: Building trust
Building trust Significant progress made across No Time To Waste environmental sustainability programme ∙ Completed assessment of our carbon footprint across our full product life cycle and value chain ∙ Data has now allowed us to set science-based targets that will guide us on our journey to becomin
Slide 23: Building trust
Building trust AGBarr BUILDING GREAT BRANDS. OUR 2020 GREENHOUSE GAS EMISSIONS SeQS28e8ee8 12% 57% 6% 4% res 2% % 0.5% INGREDIENTS PACKAGING EQUIPMENT MANUFACTURING = TRANSPORT IN-SHOP WASTE ‘STAFF COMMUTING AND SERVICES REFRIGERATION =MANAGEMENT & TRAVEL TOTAL EMISSIONS OF 154,602 TONNES CO2e 23
Slide 24: Longer-term Deposit Return Scheme Update
Longer-term Deposit Return Scheme Update DRS in Scotland ∙ Go-live now extended to August 2023 ∙ Not-for-profit scheme administrator in place and progressing with implementation Assumed commercial impact Potential Producer fees - Potential Higher producer per container - changing consumer prices Volu
Slide 25: Future growth drivers
Future growth drivers Building a multi-beverage portfolio of brands, with a specific focus on developing within higher growth sectors 25
Slide 26: Future growth drivers
Future growth drivers 1 Core brand growth through distribution and rate of sale 2 Innovation 3 Developing new channels and categories 4 Funkin international expansion 5 M&A 26
Slide 27: Core brand growth through distribution and rate of sale
Core brand growth through distribution and rate of sale Building on strong momentum… Barr Soft Drinks Focused on IRN-BRU and Rubicon masterbrands ∙ 6% growth in IRN-BRU distribution points with XTRA up 10.8% in England & Wales ∙ 11% growth in Rubicon distribution points Funkin ∙ 30%+ increase in RTD
Slide 28: Innovation
Innovation Fewer, bigger, better Premium & Format and flavour development RTD can and glass Leveraging our capability naturally targeting mainstream range extension - top in the energy category sweetened consumer base 10 cocktail focus 28
Slide 29: Developing new channels and categories
Developing new channels and categories MOMA Foods Limited Entry into high growth plant-based sector ∙ 61.8% initial equity stake with agreed path to full ownership over next three years ∙ Investing for growth within fastest growing plant based milk category - oat milk market projected to be worth £4
Slide 30: Developing new channels and categories
Developing new channels and categories E-commerce and digital development Expanded and dedicated E-commerce team Technology ✓ Pureplay 2021/22 sales development ∙ Double 2020/21 ✓ Continued year ∙ Four times 2019/20 on year doubling of sales through ✓ Grocery.com our Barr Direct ∙ Growing market sha
Slide 31: Funkin international expansion
Funkin international expansion Ireland - growing existing Australia - year 1 US - in planning stage export market ∙ Population c.25m ∙ 2nd largest and fastest ∙ Population c.5m ∙ New exclusive brand supplier growing RTD market in the agreement in place world ∙ Local distribution partnership RTD off
Slide 32: M&A
M&A £68m cash in bank and significant debt-raising capacity available Continued ambition to grow through M&A, alongside organic growth M&A target characteristics FMCG Beverage- Bolt-on UK bias Branded focused M&A drivers Significant Operational Synergies growth potential leverage Shareholder value-foc
Slide 33: Summary and outlook
Summary and outlook ∙ Resilient business and growing brands ∙ Excellent financial performance ∙ Accelerated environmental sustainability agenda ∙ Good momentum with exciting brand and sales plans for 22/23 ∙ Actions ongoing to mitigate significant inflationary pressure ∙ Strong balance sheet and signifi
Slide 34: Appendix 1: Market update
34 Appendix 1: Market update BUILOING GREAT BRANDS
Slide 35: Total UK soft drinks market
Total UK soft drinks market Total UK soft drinks value Total UK soft drinks volume 8.9% 1.7% Carbonates value Carbonates volume 7.3% 7.8% Stills value Stills volume 11.1% 3.5% Source : IRI Marketplace 52 weeks to 29/01/22 35
Slide 36: Total UK soft drinks market - sub categories
Total UK soft drinks market - sub categories Source : IRI Marketplace 52 weeks to 29/01/22 36
Slide 37: UK soft drinks - market dynamics
UK soft drinks - market dynamics · On-the-go consumption has recovered as Covid-19 restrictions have eased and consumers return to more ‘normal’ shopping behaviours · Take home purchasing has remained strong Source : IRI Marketplace 52 weeks to 29/01/22 37
Slide 38: Total UK soft drinks market
Total UK soft drinks market · Total soft drinks market has doubled over last 20 years proving its resilience · Carbonates market remains a relevant and resilient sub category Source : 2001 to 2019 rebased from IRI and Neilson dataset, 2020 & 2021 IRI Market Advantage 38
Slide 39: Cocktail market dynamics
Cocktail market dynamics Value of cocktails in Cocktails % of total venue drink sales GB from Apr 2021 reopening to Oct 2021 £296m 9.9% vs 6.0% same period 2019 -25% No. of outlets stocking GB consumers drinking cocktails cocktails out of home 35.1K 7.4m -1.0% 15% of adult population # 1 Pornstar Ma
Slide 40: Appendix 2: MOMA acquisition accounting
Appendix 2 : MOMA acquisition accounting 40
Slide 41: MOMA - Acquisition accounting
MOMA - Acquisition accounting Acquisition · 61.8% acquisition in MOMA Foods January 2022 date to Full year view January 2022 Limited = £6.2m Assets P&L · Value on acquisition = £10.0m Brand 8.4 Revenue 1.1 5.8 · Non controlling interest fair value = Goodwill 1.0 Gross Margin 0.4 2.0 £3.8m Net assets