Britvic — H1 2014 Earnings Presentation
35 slides from Britvic's earnings presentation, 2014
Slide 1: Britvic plc Interims Presentation 2014
Britvic plc Interims Presentation 2014
Slide 2: Gerald Corbett, Chairman
Gerald Corbett Chairman
Slide 3: John Gibney, Chief Financial Officer
John Gibney Chief Financial Officer
Slide 4: Group performance
Group performance +4.7% +12.9% +60bps + 16.9% 0.3x +13.0% Group revenue Group Group EBITA Adjusted Improved Net Interim EBITA margin EPS of Debt/EBITDA DPS of £670.7m 2.6x 6.1p £60.5m 9.0% 14.5p £479.4m Strong progress on key metrics EBITA is defined as operating profit before exceptional and other
Slide 5: The consumer environment has remained challenging
The consumer environment has remained challenging GB Consumers continued to focus on managing basket spend and seeking value Discounters enjoyed considerable growth, whilst mainstream retailers re- evaluate their proposition Ireland Discounters performed well in a difficult market Aggres
Slide 6: Soft drinks market performance in H1
Soft drinks market performance in H1 GB Take-home market volume up 0.5% with value up 2.7% Stills volume growth of 1.9% and value growth of 2.5%, led by plain water up 11.7% (volume) and 14.2% (value). Excluding water, stills volume was down 2.6% with value up 0.8% Carbonates volume declin
Slide 7: France – syrups and kids are driving category growth
France – syrups and kids are driving category growth Value change – MAT March-2014 Value change – MAT March 2014 (K€) (%) Source: Symphony IRI March 2014 7
Slide 8: GB stills
GB stills 2014 2013 % £’m £’m Change Volume (m. litres) 189.6 192.9 (1.7) ARP per litre (pence) 88.3p 84.9p 4.0 Revenue 167.4 163.7 2.3 Brand contribution 82.9 81.4 1.8 Brand contribution margin 49.5% 49.7% (20)bps An improved volume Margin decline due to performance in Q2 increase in A&P spend 8 No
Slide 9: GB carbonates
GB carbonates 2014 2013 % £’m £’m Change Volume (m. litres) 616.7 580.9 6.2 ARP per litre (pence) 46.1p 45.9p 0.4 Revenue 284.6 266.6 6.8 Brand contribution 104.8 100.2 4.6 Brand contribution margin 36.8% 37.6% (80)bps Volume, revenue and ARP Margin decline due to increase all in growth in A&P spend
Slide 10: France
France % Change 2014 2013 % constant £’m £’m Change currency Volume (m. litres) 141.5 134.3 5.4 5.4 ARP per litre (pence) 90.0p 87.9p 2.4 1.5 Revenue 127.4 118.0 8.0 7.0 Brand contribution 30.3 26.7 13.5 12.2 Brand contribution margin 23.8% 22.6% 120bps 110bps Fruit Shoot now number 1 Growth across
Slide 11: Ireland
Ireland % Change 2014 2013 % constant £’m £’m Change currency Volume (m. litres) 99.5 98.7 0.8 0.8 ARP per litre (pence) 53.1p 55.7p (4.7) (5.3) Revenue 64.2 67.2 (4.5) (5.2) Brand contribution 21.0 24.2 (13.2) (13.9) Brand contribution margin 32.7% 36.0% (330)bps (330)bps Market value share gain in
Slide 12: International
International 2014 2013 % £’m £’m Change Volume (m. litres) 20.5 21.0 (2.4) ARP per litre (pence) 132.2p 112.9p 17.1 Revenue 27.1 23.7 14.3 Brand contribution 10.7 9.1 17.6 Brand contribution margin 39.5% 38.4% 110bps Strong revenue and margin growth Continued growth in core driven by US expansion.
Slide 13: A&P and fixed costs
A&P and fixed costs 2014 2013 % £’m £’m Change Total A&P spend 30.9 22.0 (40.5) A&P as a % of revenue 4.7% 3.5% (120)bps Non-brand A&P 5.1 4.3 (18.6) Fixed supply chain 54.5 54.0 (0.9) Selling costs 65.6 64.5 (1.7) Overheads & other 65.5 66.8 1.9 TOTAL FIXED COSTS 190.7 189.6 (0.6) Strategic initiat
Slide 14: EBIT to earnings
EBIT to earnings % Change 2014 2013 Constant £’m £’m Currency EBIT 59.0 52.0 13.5 Interest (13.7) (14.5) 5.5 Profit before tax 45.3 37.5 20.8 Tax (11.3) (9.0) (25.6) Effective tax rate 24.9% 24.0% (90)bps Profit after tax 34.0 28.5 19.3 Debt reduction has resulted in Earnings growth of 19.3% lower i
Slide 15: Cash flow
Cash flow 2014 2013 % £’m £’m Change EBIT 59.0 52.0 13.5 Depreciation & amortisation 23.6 25.4 (7.1) EBITDA 82.6 77.4 6.7 Working capital (55.8) (57.4) 2.8 Capital expenditure (23.4) (17.1) (36.8) Pension contributions (20.8) (13.9) (49.6) Other (13.4) (13.4) - Underlying free cash flow (30.8) (24.4
Slide 16: Exceptional and other items
Exceptional and other items P&L £’m Cash items Strategic restructuring costs 10.2 Non cash items Other fair value movements (2.0) £13.3m of exceptional cash outflow 16
Slide 17: 2014 Guidance
2014 Guidance • Reiterating EBIT guidance range of £148m to £156m • Low single digit raw material inflation, with benign commodity environment offset by negative impact of foreign exchange rate movements • Interest rate of 5.5% to 6.0%, effective tax rate expected to be 24.5% to 25.0% • Capital spen
Slide 18: Summary
Summary Consumer and retailer environment remained challenging Strong performance underpinned by revenue and margin growth Interim dividend growth of 13% On-track for FY EBIT within guidance range of £148-156m 18
Slide 19: Simon Litherland, Chief Executive Officer
Simon Litherland Chief Executive Officer
Slide 20: Agenda
Agenda Significant progress in executing our new strategy Investing in our portfolio of leading brands Continued momentum in our international markets 20
Slide 21: Britvic will become one of the world's most admired soft drinks businesses
Britvic will become one of the world’s most admired soft drinks businesses Being the Fully exploiting Creating a Being trusted benchmark global simple focused and respected in integrated branded opportunities in operating model our communities soft drinks Kids, Family and business Adult in GB & Irel
Slide 22: Significant progress in executing new strategy
Significant progress in executing new strategy Nearing the end of a transformational change programme Cost savings programme on track to deliver £30m by FY 2016 Business units operating with full accountability, alongside a lighter PLC structure Full executive team now in place with the appo
Slide 23: Transformational initiatives are nearing completion
Transformational initiatives are nearing completion Key Initiatives H1 Actions Chelmsford and Huddersfield factories closed A Fruit Shoot production line relocated to France Increase operational leverage Increase operational leverage Ballygowan now sole water brand in Ireland and GB GB & Ire
Slide 24: Investing in our portfolio of leading brands
Investing in our portfolio of leading brands
Slide 25: Driving category leadership - kids
Driving category leadership - kids • Fruit Shoot promotion with global phenomenon Angry Birds and sponsored TV on Nickelodeon • Strong engagement with target audience • Motivating kids to learn new skills in fun and interactive ways • Fruit Shoot tie-in with Tour de France • Major sampling campaign
Slide 26: Driving category leadership - family
Driving category leadership - family • New brand campaign for Tesseire Zéro • More natural formulations and mainstream flavours • Tour de France sponsorship continues • 15m spectators across France and GB • Major sampling and brand awareness campaign • Robinson’s world-class sponsorship of Wimbledon
Slide 27: Driving category leadership - adults
Driving category leadership - adults • “Refreshed” Juicy Drench to better meet needs of 30+ year olds in soft drinks • New pack design • No artificial colours, sweeteners or flavours and 30% less sugar • J20 Pear Gold returns for the summer • Only 85 calories per bottle • Squash’d launch allows cons
Slide 28: Growing the PepsiCo portfolio
Growing the PepsiCo portfolio Mountain Dew campaign to broaden brand awareness and create association with film/games X-men partnership in H2 Limited edition 7UP free “Tropical Splash” available in Ireland Lemon and lime is a leading category in Ireland Lipton Ice Tea focus with advertisin
Slide 29: Continued momentum in our international markets
Continued momentum in our international markets
Slide 30: Fruit Shoot in Europe continues to grow
Fruit Shoot in Europe continues to grow France Now the #1 brand by value in category Strong momentum - volume and value doubled in last year The Netherlands Continued double-digit value and volume growth A leading brand in category and growing share In-market resource now in place Sp
Slide 31: On-track in India for a mid-2014 launch
On-track in India for a mid-2014 launch In-market team is now established Supply chain model now operational Sustainable capacity through dedicated production line with Pepsi co-packer Flavour house partner and procurement chain established Commercial production on-track Major consumer c
Slide 32: Fruit Shoot achieves national distribution in USA
Fruit Shoot achieves national distribution in USA Fruit Shoot now national in USA Increased footprint with PAB into states including California New distribution agreement with major independent bottler Admiral Beverages Corporation (ABC) Other independent bottlers now taking Fruit Shoot into
Slide 33: Summary
Summary Strong H1 performance and full year guidance re-iterated (EBIT £148m to £156m) Organisation has successfully managed major change programme Delivery of strategic cost savings on-track Significant progress in USA, India and Europe Good prospects for growth over the long-term in both core and
Slide 34: Appendix
Appendix
Slide 35: Robust long term capital structure
Robust long term capital structure Facility profile (£m) Adjusted net debt of £479.4m at HY FY14 Coupon profile (5.5-6.0%) £400m revolving credit facility (RCF) Matures March 2016 US Private Placement (USPP) £105.8m equivalent of 7, 10 and 12-year notes issued in Feb 2014 Refinancing o