Britvic — FY2010 Earnings Presentation
50 slides from Britvic's earnings presentation, 2010
Slide 1: Preliminary Results 2010
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Slide 2: Gerald Corbett
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Slide 3: John Gibney, Group Finance Director
John Gibney Group Finance Director 3
Slide 4: Headlines
Headlines Underlying Revenue up 5.9% Underlying EBITA up 10.8% Exceptional and Other Items of £137.9m Adjusted EPS up 18.1% Underlying Free Cashflow of £67.8m Note: All measures except Exceptional and other Items, free cash flow and Adjusted EPS exclude the impact of the 53rd week and Britvic France
Slide 5: A Strengthening Track Record
A Strengthening Track Record GB/INT’L REVENUE GB/INT’L EBITA 6.4% CAGR 12.5% CAGR UNDERLYING FREE ADJUSTED EPS CASHFLOW 17.9% CAGR £318M IN 5 YEARS Note: All numbers are pre-exceptionals unless stated otherwise. Adjusted EPS is calculated on a constant-currency basis and is adjusted for amortisation
Slide 6: Group Financial Headlines
Group Financial Headlines (including the impact of Britvic France and the 53rd week) FY10 FY09 % £m £m Change Revenue 1,138.6 978.5 16.4 Brand Contribution 457.7 386.0 18.6 EBITA 144.1 118.3 21.8 EBIT 134.6 109.7 22.7 EBIT Margin 11.8% 11.2% 60bps Profit After Tax 80.0 63.8 25.4 Underlying Free Cash
Slide 7: Like-For-Like Underlying Performance
Like-For-Like Underlying Performance FY10 FY09 % £m £m Change Revenue 1,035.9 978.5 5.9 EBITA 131.1 118.3 10.8 EBIT 122.3 109.7 11.5 EBIT Margin 11.8 11.2 60bps Profit After Tax 73.2 63.8 14.7 Note: All numbers are before exceptional and other items. P&L items are shown on a constant-currency basis
Slide 8: Britvic GB Carbonates
Britvic GB Carbonates FY10 FY09 % % of £m £m Change Group Total Volume (million litres) 1,097.4 995.7 10.2 55.4 ARP Per Litre (pence) 42.7 41.8 2.2 - Revenue 468.4 416.7 12.4 41.8 Brand Contribution 183.5 151.2 21.4 40.8 Brand Contribution Margin 39.2% 36.3% 290bps - OutperformingThe Outperforming T
Slide 9: Britvic GB Stills
Britvic GB Stills FY10 FY09 % % of £m £m Change Group Total Volume (million litres) 514.4 496.8 3.5 26.0 ARP Per Litre (pence) 70.5 70.5 0.0 - Revenue 362.7 350.2 3.6 32.4 Brand Contribution 169.0 156.5 8.0 37.6 Brand Contribution Margin 46.6% 44.7% 190bps - RobinsonsAnd Robinsons And MarginsRising
Slide 10: Britvic International
Britvic International FY10 FY09 % % of £m £m Change Group Total Volume (million litres) 35.0 28.8 21.5 1.8 ARP Per Litre (pence) 73.7 77.8 (5.3) - Revenue 25.8 22.4 15.2 2.3 Brand Contribution 9.0 7.6 18.4 2.0 Brand Contribution Margin 34.9% 33.9% 100bps - DrivenBy Driven By Franchising&& Franchisin
Slide 11: Britvic Ireland
Britvic Ireland FY10 FY09 % % of £m £m Change Group Total Volume (million litres) 229.1 226.1 1.3 11.6 ARP Per Litre (pence) 58.4 62.1 (6.0) - Total Revenue 179.0 189.2 (5.4) 16.0 Brand Contribution 64.1 70.7 (9.3) 14.3 Brand Contribution Margin 35.8% 37.4% (160)bps - EBITA 8.4 13.5 (37.8) 6.0 EBIT
Slide 12: Britvic France
Britvic France FY10 % of £m Group Total Volume (million litres) 104.5 5.2 ARP Per Litre (pence) 81.5 - Revenue 85.2 7.5 Brand Contribution 24.1 5.3 Brand Contribution Margin 28.3% - ImmediateEarnings Immediate EarningsAccretion Accretion SynergiesOn Synergies OnTrack TrackFor For2013: 2013: DrivenBy
Slide 13: Fixed Costs
Fixed Costs FY10 FY10 FY09 % £m £m £m Change 53 weeks 52 weeks 52 weeks Non-Brand A&P 10.4 10.4 8.1 (28.4) Fixed Supply Chain 94.9 94.9 87.3 (8.7) Selling Costs 117.2 116.2 102.6 (13.3) Overheads & Other 100.6 98.6 78.3 (25.9) TOTAL FIXED COSTS 323.1 320.1 276.3 (15.9) Total A&P Spend 56.7 56.7 52.6
Slide 14: EBITA to Earnings
EBITA to Earnings FY10 FY10 FY09 % £m £m £m change 53 weeks 52 weeks 52 weeks EBITA 144.1 139.1 118.3 17.6 Amortisation (9.5) (9.5) (8.6) (10.5) EBIT 134.6 129.6 109.7 18.1 Interest (25.5) (25.0) (23.6) (5.9) Profit Before Tax 109.1 104.6 86.1 21.5 Tax (29.1) (27.8) (22.3) (24.7) Effective Tax Rate
Slide 15: Exceptional And Other Items
Exceptional And Other Items £m Britvic Ireland Intangible Asset Write-Down 89.6 Property Write-Down 14.6 Restructuring Costs 5.7 Non-Core GB Brands Write-Down 11.4 Britvic France Acquisition Costs 8.5 Other 8.1 Total Exceptional Items 137.9 Non-Cash 124.8 Total Exceptional Items After Tax 128.2 15
Slide 16: Cash flow
Cash flow FY10 FY09 % £m £m change 53 weeks 52 weeks Depreciation & Amortisation 44.3 40.4 (9.7) EBITDA 178.9 150.5 18.9 Working Capital (11.1) 13.8 - Capital Expenditure (45.3) (40.1) (13.0) Pension (13.2) (10.0) (32.0) Other (41.5) (44.5) 6.7 Underlying Free Cash flow 67.8 69.7 (2.7) Dividends (34
Slide 17: Debt Structure
Debt Structure Facility Drawing Headroom Maturities Size (£m) (£m) (£m) Bank Loans 333.3 2012 126.3 207.0 US PP 2014, 2017, 228.5 228.5 - Issued 2007 2019 US PP 2014, 2016 149.8 149.8 - Issued 2009 2017, 2019 (Cash)/ - - (53.4) 53.4 Overdraft/Other SUB-TOTAL 711.6 - 451.2 260.4 US PP 113.0 2017 to 2
Slide 18: Guidance – 2011
Guidance – 2011 Revenue Costs & Capex Margins •Innovation adds 1-2% •Raw-material Inflation •Average annual likely to be 5-6% EBITA margin growth •Medium-term growth drivers remain robust •Further group-structure of 50 bps investment of £2m •53rd week was a one-off •H1 2011 likely to be benefit for
Slide 19: Summary
Summary Challenging Environments GB, Int ’l & France Performing Strongly Int’l A New Model For Ireland Clear EBITA-Margin Ambitions EBITA-Margin Investing For Growth Continued Earnings Momentum 19
Slide 20: Paul Moody, Chief Executive
Paul Moody Chief Executive 20
Slide 21: A Strategy For Growth
A Strategy For Growth Market Volume Growth 2-3% Developing Cold-Drink Organic Distribution Innovation Adding Growth 1-2% Average Realised Price c.1%+ M&A: Europe International Britvic International: Export Expansion Outside Europe: Licensing and Franchising 21
Slide 22: GB Market Growth Rates
CARBS GB Market Growth Rates TOTAL MARKET VALUE GROWTH + 6.3% TOTAL MARKET VOLUME GROWTH + 2.3% STILLS 47.9% 67.5% 22 Source: Nielsen Scantrack Oct 2010: Take Home
Slide 23: Irish Market Growth Rates
Irish Market Growth Rates TOTAL MARKET VALUE DECLINE (5.4%) CARBS TOTAL MARKET VOLUME GROWTH + 4.3% STILLS Source: Nielsen Scantrack 52 weeks to Oct 3rd 2010: ROI Grocery 23
Slide 24: French Market Growth Rates
CARBS French Market Growth Rates TOTAL MARKET VALUE GROWTH + 3.8% TOTAL MARKET VOLUME GROWTH + 2.2% STILLS 24
Slide 25: Channels To Market In GB
Channels To Market In GB Grocery Pubs & Clubs Impulse Food Service z Retail value z Retail value z Retail value z Retail value £5.0bn £2.8bn £1.5bn £2.2bn z Britvic share z Britvic share z Britvic share z Britvic share 12.8% 40.9% 9.6% 10.2% z Gaining share z Retaining z Strategy z Strategy through
Slide 26: The 2010 GB Innovation Programme
The 2010 GB Innovation Programme New Brand Pack & Brands Extensions Experience 26
Slide 27: The Launch Of 600ml
The Launch Of 600ml Pepsi Rate‐of‐Sale +48% Tango: the highest ROS in the SKU category 7UP‐Free: the highest ROS in the SKU category Source: Nielsen Scantrack, Unit/Cash ROS (AC Wtd) 12 weeks to 30.10.10 27
Slide 28: The Launch Of Mountain Dew Energy
The Launch Of Mountain Dew Energy Driving 71% of forecourt glucose energy growth 90% of Glucose/Stimulant category growth Source: Synovate 12 weeks to August 2010 28
Slide 29: Pepsi Again Drives The Growth In The Cola Category
Pepsi Again Drives The Growth In The Cola Category Highest Summer Market‐ Share During World Cup •More buying •More frequently •Spending more Sources: Nielsen May to July 2010 29
Slide 30: Robinsons – The 'Superbrand'
Robinsons – The ‘Superbrand’ Bought by more people than any other soft drink +1.5m households bought during Wimbledon Sources: 1) www.superbrands.uk.com (2) Nielsen MAT October 2010 (includes Robinsons Fruit Shoot) 30
Slide 31: The Second Year Of Juicy Drench
The Second Year Of Juicy Drench 33% Of Sales Are Incremental To The Category The Most Successful Launch In Impulse Soft Drinks In The Last 3 Years Source: Nielsen Scantrack March 2010 31
Slide 32: Relaunch of Lucozade-style brand with major A&P investment
Brand Relaunch Packaging Major A&P New Flavour Redesign Investment ..used by the best Olympians in the World… ...because we are the original, the most researched and the most credible PepsiCo Confidential 32
Slide 33: GB Activity In 2011
GB Activity In 2011 Oct - Dec Jan - Mar April - June July - Sept Taste The Moment Taste The Moment Portfolio Reward Your Thirst – Launch: Nov - Feb Reward Your Thirst – Refresh: April - July Juicy Extra-Free Pack Gatorade Re-brand Pepsi Music On Pack Robinsons' Mountain Dew TTL KOPG On-pack Wimbledo
Slide 34: Britvic France In 2011
Britvic France In 2011 Building Further The Capability Innovation Launch Of To Market Fruit Shoot 34
Slide 35: Fruit Shoot – Driving French Synergies
Fruit Shoot – Driving French Synergies Y1: Strong Total Market Volumes 70m In-Store Litres Support & Start of TV Campaign Specific Teisseire French Endorsement Formulations - Reassuring Mum 35
Slide 36: Britvic Ireland In 2011
Britvic Ireland In 2011 A Right- Sized Medium- Focused Innovation Business Term Brand And Product Model Confidence Investment Launches 36
Slide 37: Britvic Ireland: Mountain Dew Energy
Britvic Ireland: Mountain Dew Energy n Driving Availability Quality distribution of 500ml o Unavoidable Visibility PET in the right channels Impact Feature & POS to win @ POP p Sampling Campaign Increases across Brand Awareness & Buzz/Excitement among target audience 37
Slide 38: Britvic Ireland: Juicy Drench
Britvic Ireland: Juicy Drench Jan - Feb Mar - Apr May-Jun Jul-Aug Sep Oct 2011 2011 2011 2011 2011 2012 Innovation Launch 1.25L Engagement Relevance 38
Slide 39: Innovation Across The Group In 2011
Innovation Across The Group In 2011 39
Slide 40: Britvic International – The Global Spread of Fruit Shoot
Britvic International – The Global Spread of Fruit Shoot z A national launch – the two largest retailers, Cole’s and Woolworth’s z Sales already commenced – November 2010 z Ambition – to be a leading category brand 40
Slide 41: Britvic International – The Global Spread of Fruit Shoot
Britvic International – The Global Spread of Fruit Shoot z Buffalo Rock and Britvic - a successful partnership z Exciting further trialling with other independent PepsiCo partners o – up the Eastern Seaboard z Building a global presence – our wholly-owned brands 41
Slide 42: Summary
Summary Challenging Macro Conditions With Resilient Markets Well-Invested Brands And Innovations A Strong 2011 Programme A Balanced Strategy Delivering Quality Earnings Growth 42
Slide 43: Preliminary Results 2010
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Slide 44: Appendix
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Slide 45: The ADR Programme
The ADR Programme Britvic’s ADR shares trade on the US ADR Benefits to over-the-counter market under the US Investors: following information: z ADRs give access to Symbol BTVCY cross-border market CUSIP 111190104 liquidity z ADRs are cost-effective Ratio 1 ADR : 2 ORD Country UK z ADRs are convenien
Slide 46: Market Positions
Market Positions GB Take-Home 6.4% Irish Take-Home French Syrups (£6.5bn) (€0.5bn) (€0.2bn) GB Pubs & Bars Irish Licensed French Juices (£2.8bn) (€0.3bn) (€1.1bn) Sources: Nielsen Scantrack Take Home 52 weeks to 02.10.2010 CGA Pubs & Clubs data to August 2010 MAT Nielsen Scantrack 52 weeks to Oct 3r
Slide 47: GB Market Volumes
GB Market Volumes 000s LITRES 190,000 2007/08 180,000 2008/09 2009/10 170,000 160,000 150,000 140,000 130,000 120,000 110,000 WE WE WE WE WE WE WE WE WE WE WE WE WE 10.10.09 07.11.09 05.12.09 02.01.10 30.01.10 27.02.10 27.03.10 24.04.10 22.05.10 19.06.10 17.07.10 14.08.10 11.09.10 47 Source: Nielsen
Slide 48: Irish Market Volumes
Irish Market Volumes 2007/08 000s LITRES 2008/09 2009/10 48 Source: Nielsen Scantrack Sept 2009: Take Home
Slide 49: French Market Volumes
French Market Volumes 000s LITRES 1000 1,000,000 2007/08 2008/09 2009/10 750 750,000 500,000 500 Oct Nov Dec Jan Feb Mar Apr May Ju n Ju l Aug Sept Source: IRI Census data (Total Suppliers – THG) MAT October 2010 49
Slide 50: Debt Repayment Profile
Debt Repayment Profile £m £m Revolver USPP 50