Britvic — FY2011 Earnings Presentation
52 slides from Britvic's earnings presentation, 2011
Slide 1: Britvic plc Preliminary Results 2011
Britvic plc Preliminary Results 2011
Slide 2: Gerald Corbett, Chairman
Gerald Corbett Chairman mw a Prool 7u Won bE ¥ “MBS 5 gem
Slide 3: John Gibney, Group Finance Director
John Gibney Group Finance Director
Slide 4: Agenda
Agenda Financial performance John Gibney Britvic and the market review Paul Moody
Slide 5: Group performance
Group performance +14.6% +4.3% (110)bps £59M (8.2)% +6.0% FCF Group Group Group Continued Adjusted Continued revenue EBITA EBITA cash EPS dividend margin generation growth EBITA is defined as operating profit before exceptional and other items and amortisation. In a change to last year only amortisa
Slide 6: Group financial headlines
Group financial headlines % Change 2011 2010 % constant £’m £’m Change currency Group Revenue 1,290.4 1,121.1 15.1 14.6 Group EBITA 138.1 131.8 4.8 4.3 Group EBITA Margin 10.7% 11.8% (110)bps (110)bps Group Profit After Tax 77.9 76.8 1.4 0.9 Underlying Free Cashflow* 59.3 67.8 (12.5) - Group Adjuste
Slide 7: GB stills
GB stills 2011 2010 % £’m £’m Change Volume (m. litres) 493.5 514.4 (4.1) ARP per litre (pence) 71.2p 70.5p 1.0 Revenue 351.2 362.7 (3.2) Brand contribution 150.1 169.0 (11.2) Brand contribution margin 42.7% 46.6% (390)bps ARP growth constrained Significantly by product and impacted by raw material
Slide 8: GB carbonates
GB carbonates 2011 2010 % £’m £’m Change Volume (m. litres) 1,130.5 1,097.4 3.0 ARP per litre (pence) 44.5p 42.7p 4.2 Revenue 502.6 468.4 7.3 Brand contribution 189.1 183.5 3.1 Brand contribution margin 37.6% 39.2% (160)bps Grew market value share Strong ARP growth of total carbonates Note: All numb
Slide 9: International
International 2011 2010 % £’m £’m Change Volume (m. litres) 37.8 35.0 8.0 ARP per litre (pence) 77.0p 73.7p 4.5 Revenue 29.1 25.8 12.8 Brand contribution 10.9 9.0 21.1 Brand contribution margin 37.5% 34.9% 260bps Established franchises Maintained double-digit building momentum revenue growth Note: A
Slide 10: Ireland
Ireland % Change 2011 2010 % constant £’m £’m Change currency Volume (m. litres) 210.8 229.1 (8.0) (8.0) ARP per litre (pence) 58.7p 58.4p 0.5 0.0 Revenue 162.8 179.0 (9.1) (9.6) Brand contribution 57.8 64.1 (9.8) (9.8) Brand contribution margin 35.5% 35.8% (30)bps (10)bps Revenue down as ARP flat a
Slide 11: France
France 12 months 4 months 2011 2010 £’m £’m Volume (m. litres) 286.0 104.5 ARP per litre (pence) 85.6p 81.5p Revenue 244.7 85.2 Brand contribution 62.0 24.1 Brand contribution margin 25.3% 28.3% High single digit Strong launch of revenue growth Teisseire Fruit Shoot Note: All numbers are pre-excepti
Slide 12: A&P and fixed costs
A&P and fixed costs 2011 2010 % £’m £’m Change Total A&P spend 62.8 56.7 (10.8) A&P as a % of revenue 5.0% 5.3% (30)bps Non-brand A&P 8.0 10.4 23.1 Fixed supply chain 111.1 94.9 (17.1) Selling costs 121.7 116.2 (4.7) Overheads & other 94.1 98.6 4.6 TOTAL FIXED COSTS 334.9 320.1 (4.6) Full year of fi
Slide 13: EBIT to earnings
EBIT to earnings 2011 2010 % £’m £’m Change EBIT 135.0 129.6 4.2 Interest (29.9) (25.0) (19.6) Profit before tax 105.1 104.6 0.5% Tax (27.2) (27.8) 2.2 Effective tax rate 25.9% 26.6% 70bps Profit after tax 77.9 76.8 1.4 Interest Interest increase increase due due Effective Effective tax tax rate rat
Slide 14: Exceptional and other items
Exceptional and other items £’m Net pension curtailment gain 13.2 Group data centre outsourcing (3.9) Vending operation outsourcing (6.5) Restructuring costs (14.6) Fair value movement of financial instruments (10.6) Refinancing fees write-off (1.5) Head office relocation (1.3) Total exceptional and
Slide 15: Cashflow
Cashflow 2011 2010 % £’m £’m Change EBIT 135.0 134.6 0.3 Depreciation & amortisation 50.7 44.3 (14.4) EBITDA 185.7 178.9 3.8 Working capital (13.5) (11.1) (21.6) Capital expenditure (49.0) (45.3) (8.2) Pension contributions (11.4) (13.2) 13.6 Other (52.5) (41.5) (26.5) Underlying free cashflow 59.3
Slide 16: Britvic GB Pension scheme
Britvic GB Pension scheme • Agreement reached for payments by end of each calendar year of: • 2011 - £10m : 2012 - £12.5m : 2013 -17 inc. £20m p.a • This includes the income from a Pension Funding Partnership (PFP) which will continue to 2026 • Subject to triennial valuation • The PFP is an asset-ba
Slide 17: Guidance
Guidance Revenue Cost Capital Minimum ARP growth Raw material inflation GB £50-55m of 1% of mid-single digit France €12m Ireland €8m Premium categories PVO saving of £8m under continued Other pressure Progressive dividend A&P maintained at 5% of revenue policy Innovation adds 1-2% to the top line Im
Slide 18: Impact of proposed tax changes
Impact of proposed tax changes France • Additional tax on companies with T/O exceeding €250m • 5% on tax paid not 5% on earnings = +1.67% • Proposed sugar tax “taxe sur les boissons sucrees” impacts nectar, juice and 0% sugar syrups but not regular syrups • Impact in the range of €6-7m • Proposed VA
Slide 19: Summary
Summary Resilient underlying growth Decisive action taken to control costs Maintaining price discipline Continued dividend growth
Slide 20: Paul Moody, Chief Executive
Paul Moody Chief Executive BE BINSO4, Sa bs a. 3 ame Tand ut altS< ie 5 eho ha aa} i
Slide 21: A strategy for organic growth
A strategy for organic growth GB • Market volume growth • Innovation growing the top line • Driving on-the-go distribution • Improving ARP through revenue management France • Delivery of the €17M synergies by 2013 • Innovation growing the top line • Exploiting group brands and capability • Launching
Slide 22: A strategy for international expansion
A strategy for international expansion International • Building the European footprint through the acquisition of assets •Franchising the Britvic-owned brands •Continued collaboration with PepsiCo
Slide 23: 2011 GB soft drinks market
2011 GB soft drinks market Take-home Pubs & clubs Carbonates Stills volume market volume market volume volume growth decline growth decline of 2.2% of 3.6% of 1.8% of 0.8% Source: Nielsen take-home scantrack October 2011. Pubs and Clubs CGA data August 2011
Slide 24: 2011 Ireland soft drinks market
2011 Ireland soft drinks market Grocery Grocery Pub & club Latest quarter market volume market value market volume grocery volume decline decline decline decline of 2.2% of 1.6% of 8.7% of 2.9% Source: Nielsen ROI grocery scantrack October 2011. Nielsen ROI licensed data September 2011
Slide 25: 2011 France soft drinks market
2011 France soft drinks market Take-home Take-home Syrups Fruit drinks market volume market value market value market value growth growth growth growth of 2.6% of 4.3% of 2.0% of 9.5% Source: IRI Census September 2011
Slide 26: Business highlights
Business highlights • Both Teisseire and Moulin De Valdonne grew value share • Successful sponsorship of the Tour de France
Slide 27: Business highlights
Business highlights • On-the-go strategy builds momentum • “Reward Your Thirst” programme achieving record levels of consumer engagement • Available across the single-serve portfolio • Growing our market share in single-serve
Slide 28: Business highlights
Business highlights • Share of total GB carbonates grew by 20bps • Pepsi held GB value share in a competitive market • Mountain Dew builds momentum in GB
Slide 29: 2011 Innovation
2011 Innovation Another year of successful innovation
Slide 30: Q1 activity
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Slide 31: Franchise update
Franchise update D if , ’ 2! % ONS! Ean
Slide 32: Britvic-owned brands with global appeal
Britvic-owned brands with global appeal
Slide 33: The dilutables market is Global BUT diverse
The dilutables market is Global BUT diverse • Mixing with water is a concept consumers are familiar with across the world • Squash • Syrups • Powders • Cordials • Market value of $16bn
Slide 34: Fruit Shoot is the leading children's brand in GB
Fruit Shoot is the leading children’s brand in GB • Revolutionised the children’s drinks category • Innovative packaging • Appeals to children : Reassures parents • Engaging marketing • A must-stock brand in all channels • The number one children’s consumer brand with a market value in excess of £10
Slide 35: A growing European footprint
A growing European footprint Ireland Netherlands France The number 2 kids A top 5 kids number 1 ROS soft-drink brand soft-drink brand where sold* Listed in McDonalds Doubled in size Major marketing plan Summer 2011 in the last 3 years to build the brand
Slide 36: Building momentum in current franchise markets
Building momentum in current franchise markets Volume up 32% Vs LY Available in 2,800 C&G outlets Available in over 2,200 outlets Distribution growth in grocery and foodservice Already the number 2 with 17% market share 1 Expanding its presence in impulse Source: Nielsen Grocery September 2011
Slide 37: Major new developments in the US
Major new developments in the US New distribution agreement with Gross & Jarson Launched in Kentucky Summer 2011 Long-term distribution agreement now in place North American manufacture to begin H2 2012 Able to supply other US bottlers and support expansion plan
Slide 38: Major new developments in the US
Major new developments in the US Wholly-owned manufacturing, sales and distribution operating unit of PepsiCo PBC distribute 75% of PepsiCo’s North American volume Distribution agreement for Florida and Georgia
Slide 39: Scale of US opportunity
Scale of US opportunity • Current focus is to build the brand credentials in the “impulse” channels • Available in excess of 5,000 outlets currently • Agreements to date create access to consumers in 6 states • Total US population 310m, and growing • Juice drinks category worth in excess of $5.4bn •
Slide 40: Investing to grow
Investing to grow • Capital investment in concentrate facility completed in Dublin factory • Marketing team recruited with multi-national experience Ireland GB USA Asia • New holding company Britvic Worldwide Brands (BWB) established in Ireland to manage the opportunities • People investment in supp
Slide 41: Guidance
Guidance Move to local manufacture creates a new landscape • Transition from export to a “concentrate” model will change revenue and improve margin • Single-serve remains the focus • PBV able to supply other US bottlers • Medium to long-term opportunity is material International revenue guidance for
Slide 42: Summary
Summary Strong brands in a resilient category Innovation meeting expectations Maintaining price discipline Exciting International developments
Slide 43: Mogin ww
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Slide 44: Appendix
Appendix f3] Britvic
Slide 45: GB Soft drinks market volume
GB Soft drinks market volume 190,000 2008/09 2009/10 2010/11 180,000 170,000 Volume Thousand Litres 160,000 150,000 140,000 130,000 120,000 110,000 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Source: Nielsen Scantrack October 2011: Take Home
Slide 46: 2011 GB soft drinks market
2011 GB soft drinks market Value Volume Cola Carbs Fruit carbs Value Lemonade Non-fruit Carbonates + 8.9% Glucose/Stims Stills + 3.1% Mixers Plain water Value growth benefited Stills Water plus from Jan 2011 VAT Juice drinks increase Pure juice Sports Squash Cold "Hot" Drinks Smoothies Dairy 0 250,0
Slide 47: France Soft drinks market volume
France Soft drinks market volume 1000000 2008/09 2009/10 2010/11 900000 Volume Thousand Litres 800000 700000 600000 500000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Source: IRI Census data (Total Suppliers – THG) MAT September 2011
Slide 48: 2011 France soft drinks market
2011 France soft drinks market Value Volume Carbs Cola Limonades tonics limes Fruit drinks Value Energy Carbonates + 4.4% Carbonated Water Stills + 4.3% Iced Tea Stills Fruit juice Fruit drink All key categories Sport in growth Dilutables Flavoured water Water Plain water volume +2bn o 0 500,000,000
Slide 49: Ireland Soft drinks market volume
Ireland Soft drinks market volume 2008/09 2009/10 2010/11 30,000.00 Volume Thousand Litres 27,500.00 25,000.00 22,500.00 20,000.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Source: Nielsen ROI grocery scantrack October 2011
Slide 50: 2011 Ireland soft drinks market
2011 Ireland soft drinks market Value Volume Carbs Cola Lemon & Lime Value Citrus Carbonates + 1.8% Other carbs Stills - 6.7% Mixers Energy Stills Mineral water No improvement in Dilutes latest 12 or 4 weeks Sports Fruit juice Juice drinks 0 35,000,000 70,000,000 105,000,000 140,000,000 Volume decli
Slide 51: Market positions
Market positions GB Take-Home £6.8bn Ireland Grocery €473m France Juice €1.2bn GB Pubs & Clubs £2.7bn Ireland Licensed €306m France Syrups €249mn Source: Nielsen GB take-home scantrack October 2011. CGA pubs and clubs August 2011. Nielsen ROI grocery scantrack October 2011. Nielsen ROI licensed Sept
Slide 52: GB Britvic Pension scheme
GB Britvic Pension scheme • 15 year pension funding partnership expected in place by end of calendar year • Trustees will have an interest in a limited partnership • Intended to give income of a minimum of £5m pa to the Pension Plan • Final payment of up to £105m depending on funding position in 202