A.G. BARR p.l.c. · LSE:BAG
A.G. BARR p.l.c — Investor Presentation (November 2020)
37 slides from A.G. BARR p.l.c's investor presentation, November 2020
Slide 1: AG Barr plc Investment Case
AG Barr plc Investment Case November 2020 1
Slide 2: Content
Content Business overview Our investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Long-term strong financial pe
Slide 3: Business overview
Business overview All data used throughout this document is based on the last published corporate information as at March and September 2019 We are a UK based branded multi beverage business focused on growth and creating long-term shareholder value ○ Long established business (140+ years) ○ Convent
Slide 4: Business overview
Business overview Business units Operational footprint 900+ employees Offices Cumbernauld – Head Office Bolton Camden (Funkin) Factories Building a differentiated Cumbernauld portfolio of great tasting soft Milton Keynes drinks brands that people Forfar love Distribution centres Cumbernauld Milton Keyne
Slide 5: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 6: Ambitious with clear and consistent value-driven strategy
Ambitious with clear and consistent value-driven strategy Our strategy Our overarching business strategy is to deliver long-term sustainable value in all that we do Our strategic priorities Connecting with consumers Building brands Consumer insight drives our business. Consumers’ We are brand owners
Slide 7: Strategy execution
Ambitious with clear and consistent value-driven strategy Strategy execution Organisational capability Acquisition development Acquisition Minority Business re-org investment in & Cumbernauld zero proof Supply manufacturing spirits brand Chain investment & investment STRYYK rationalisation Acquisiti
Slide 8: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 9: Brand owner and builder with strong differentiated portfolio
Brand owner and builder with strong differentiated portfolio ○ National core brands complemented by regional brands with well established consumer strongholds across the UK ○ Portfolio developing through brand extension, flavour development and innovation ○ c.99% of portfolio now lower or no sugar -
Slide 10: Well established strong core brands
Brand owner and builder with strong differentiated portfolio Well established strong core brands IRN-BRU RUBICON FUNKIN BARR STRATHMORE #1 soft drinks brand From nothing to UK’s #1 cocktail A brand that has The no. 1 water in the in Scotland and £109m+ of sales at brand - with growing grown by a fac
Slide 11: Complementary long-term partnership brands
Brand owner and builder with strong differentiated portfolio Complementary long-term partnership brands SAN BENEDETTO BUNDABERG Authentic premium product Range of brewed beverages from Italy’s leading soft drinks tapping into “craft” trend and water producer Partner since Jan 2018 Partner since Apri
Slide 12: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 13: Strong customer and consumer focus
Strong customer and consumer focus Understanding consumers’ attitudes and behaviours to drive category strategy and consumer and trade engagement programmes 16% 66% 18% “Don’t tell me what “I want to make my “Traditional soft drinks to do” own choices” aren’t for me” 13 Source : Consumer Survey, 200
Slide 14: Broad-based consumer and trade engagement programmes
Strong customer and consumer focus Broad-based consumer and trade engagement programmes Traditional and social Long-term franchise Brand development media campaigns partnerships Breakthrough innovation Sponsorships Consumer and trade engagement campaigns 14
Slide 15: Well balanced route to market coverage
Strong customer and consumer focus Well balanced route to market coverage meeting consumers’ needs across a range of drinking occasions AG Barr group revenue split 58.3% Source: AG Barr revenue 15
Slide 16: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 17: Simple and effective business model
Simple and effective business model ○ Consumer and customer focused ○ Brand owner and builder – >95%* company owned brands and zero private label ○ c. 95% in-house soft drinks production ○ 2.8% Value not volume focused 38.9% ○ Asset backed – flexible and efficient ○ Outsourcing used strategically where
Slide 18: Behaving responsibly for over 140 years
Behaving responsibly for over 140 years We act with integrity We respect the environment Health & safety Energy efficiency Employee engagement Waste & water reduction Responsible policies and practices Sustainable sourcing and packaging Long-term goals Long-term goals 2022 : 80% employee engagement 20
Slide 19: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 20: Strong free cash flow generation
Disciplined capital allocation Strong free cash flow generation (£m) 20
Slide 21: Disciplined capital allocation
Disciplined capital allocation Sustained investment for growth and efficiency Strong and consistent returns on capital employed Capex investment (£m) ROCE Key expansionary investments : Milton Keynes Cumbernauld Central Land and buildings Glass filling line Business Process Redesign project Can, carton
Slide 22: Progressive dividend policy
Disciplined capital allocation Progressive dividend policy Dividend payments across last 18 years £187m CAGR 9% 22
Slide 23: Partnerships and acquisition: Funkin case study
Disciplined capital allocation Partnerships and acquisition ○ Value driven, growth orientated and ambitious M&A track record and approach ○ Strong balance sheet provides optionality ○ Well funded business with supportive bank syndicate Funkin Case Study ○ Acquired in 2015 for £16.5m (plus £4.5m earn
Slide 24: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 25: Growth potential within key markets
Growth potential within key markets £16.1bn UK soft drinks market in 2019 Grocery £6.2bn soft drinks market at retail value Up 0.6% Convenience £2.6bn soft drinks market at retail value Up 0.9% Leisure £7.3bn soft drinks market at retail value Up 0.1% Notes : • Grocery & Convenience data measured by
Slide 26: Growth potential within key markets
Growth potential within key markets Source: IRI Marketplace 52 weeks to 26/01/20 Barr Soft Drinks value share of total soft drinks Total UK Scotland England & Wales 3.1% 12.4% 2.0% Take-home market example : Scale of Barr Soft Drinks’ opportunity Penetration (% of households buying 52 weeks ending 2
Slide 27: Growth potential within key markets
Growth potential within key markets Cocktails continue to provide an area of growth and opportunity for the GB on trade market £624m 43.5k 5.2m +6.4% +3.7% vs 3.8m pre lockdown Value of cocktails GB consumers UK outlets stocking in GB drinking cocktails cocktails at home 27 Source :CGA Mixed Drinks
Slide 28: Minority investment in Elegantly Spirited Limited
Growth potential within key markets Minority investment in Elegantly Spirited Limited (ESL) ■ Seeking to capitalise on growing demand for non-alcoholic adult drinks ■ New portfolio of zero proof spirits under the STRYYK brand - Not Vodka, Not Rum, Not Gin ■ Initial £1m investment for a 20% minority
Slide 29: Investment case
Investment case ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple and effective business model ○ Disciplined capital allocation ○ Growth potential within key markets ○ Long-term strong fina
Slide 30: Long-term strong financial performance
Long-term strong financial performance Revenue more than doubled PBT more than trebled Enterprise value increased by 7X 30
Slide 31: Long-term strong financial performance
Long-term strong financial performance Long-term operating margin improvement 31
Slide 32: Long-term strong financial performance
Long-term strong financial performance PBT (£m) (pre-exceptional) 32
Slide 33: Our governance
Our governance Company listed for 50+ years Established and experienced plc board Strong management team throughout the business Summary ○ Ambitious with clear and consistent value-driven strategy ○ Brand owner and builder with differentiated portfolio ○ Strong customer and consumer focus ○ Simple a
Slide 34: Appendices
Appendices 34
Slide 35: Board biographies
Board biographies John R. Nicolson : Chairman B.A. (Hons) John’s career was spent with ICI, Unilever, Fosters Brewing Group, Scottish and Newcastle PLC and Chairman of Baltika SA (Russia). Latterly as President Americas for Heineken NV and Deputy Chairman of CCU SA (Chile). He held various positions
Slide 36: Board biographies
Board biographies W. Robin G. Barr : Non-Executive Director C.A. Robin is a past President of the British Soft Drinks Association. Robin brings financial skills and an extensive understanding of UK markets to the Board. As Executive Chairman from 1978 to 2009 Robin brings a historical background to d
Slide 37: Investor contacts
Investor contacts Head of IR, Corporate Affairs & Communication, Deborah Jones +44 330 390 3407 IR@agbarr.co.uk IR and Programme Office Manager, Brenda McLeod +44 330 390 3406 IR@agbarr.co.uk Instinctif Partners, Matthew Smallwood and Justine Warren Financial +44 2077 4572020 Media justine.warren@inst