Britvic — FY2020 Earnings Presentation
33 slides from Britvic's earnings presentation, 2020
Slide 1: Britvic plc Prelims 2020
Britvic plc Prelims 2020 Britvic plc Preliminary Results 2020
Slide 2: Preliminary Results Presentation
PRELIMINARY RESULTS PRESENTATION Simon Litherland – Operational review and strategy • Successfully delivered our near‐term priorities during the pandemic • New 20‐year agreement with PepsiCo in GB • Excellent progress made on our strategic ambitions Joanne Wilson – Financial performance • Strong At‐
Slide 3: Simon Litherland – Chief Executive Officer
Simon Litherland – Chief Executive Officer • Successfully delivered our near‐term priorities during the pandemic • New 20‐year agreement with PepsiCo in GB • Excellent progress made on our strategic ambitions
Slide 4: Excellent progress made in a challenging year
Excellent progress made in a challenging year • Delivered on our pandemic priorities • Decisive action taken early to protect profit and cash • Strong growth in At Home from our portfolio of trusted brands • Dividend restored in line with policy • Extended our relationship with PepsiCo in GB to 2040
Slide 5: We delivered on our pandemic priorities
We delivered on our pandemic priorities Safeguarded our people Maintained operational agility • Implemented Government and Health Authority guidelines • Maintained high customer service levels and brand availability • Protected vulnerable employees and supported those taken ill • Adapted our commerc
Slide 6: Our strategy is fit for the future
Our strategy is fit for the future Build local favourites and Flavour billions of Healthier People | Innovate to access Strategic Priorities global premium brands water occasions Healthier Planet new spaces Market Focus ROW Lead market Globalise premium brands & improve Accelerate and growth profita
Slide 7: Winning with consumers in GB with a focus on low/no sugar brands
Build local favourites and global premium brands Winning with consumers in GB with a consistent focus on low/no sugar brands Total At‐Home Market Value +1.5% Britvic At‐Home Market Value +11.3% Total Pepsi Total 7UP Total Tango Value +14% Value +31% Value + 26% Share +180bps Share +180bps Share +120
Slide 8: Accelerating and expanding in Brazil
Build local favourites and global premium brands Accelerating and expanding in Brazil Flavour concentrates RTD Juices Nurturing innovation New category launches Fruit H2 Full Year Shoot Revenue Revenue Revenue +14.5% +15.2% +54.5% New pack formats to broaden Britvic now the #1 RTD juice Successfully
Slide 9: Growth in flavour concentrates as consumers turn to trusted family brands
Flavour Billions of Water Occasions Growth in flavour concentrates as consumers turn to trusted family brands • Market‐leading brands, rich heritage and trusted by consumers • Excellent value for money and healthy way to hydrate • Concentrated formula results in: less packaging | less waste • New ra
Slide 10: Sustainability remains a core pillar of our strategy
Healthier People | Healthier Planet Sustainability remains a core pillar of our strategy • Secured our first sustainability‐linked 'green' credit facility of £400m • Intent to be in 100% rPET across entire GB portfolio by 2022 • 12% reduction in global manufacturing water intensity ratio • Now zero
Slide 11: Innovating beyond the bottle
Innovate to access new spaces Innovating beyond the bottle Acquisition of The Boiling Tap Company Rollout of London Essence Fresh Serve • Acquired in 2020 • Patented micro‐dosing technology • Complements our leadership • 5 premium tonics on draught in dispense • Uniquely positioned to grow the • Ran
Slide 12: Platform for growth in GB with new 20-year PepsiCo agreement
Build local favourites and global premium brands Platform for growth in GB with new 20‐year PepsiCo agreement New and enhanced agreement Highlights • Extending relationship in GB to December 2040 Pepsi MAX, the #1 cola variant by volume in the At‐Home channel • Exclusive access to PepsiCo portfolio
Slide 13: Completed asset sale in France
Improve profitability in Western Europe Completed asset sale in France • Sale of juice assets to Refresco completed September, including three production sites and private label contracts • Retained one site for production of flavour concentrates • Fruit Shoot and Pressade now co‐packed as part of a
Slide 14: Operating model aligned to focus on future growth drivers
Operating model aligned to focus on future growth drivers • Pre‐pandemic we shared our framework to create shareholder value • Supported by operating model review to ensure “fit for purpose” • Completed reorganisation in Q4 to enable investment in the future growth drivers • Reinvesting cost savings
Slide 15: Summary
Summary • Strong operational management of the pandemic, continuing our track record of agility and resilience • Significant strategic advances to set us up for the long term • Disposal of non‐core assets • Renewal and creation of strategic partnerships • Simplification of the business and set up fo
Slide 16: Joanne Wilson - Chief Financial Officer
Joanne Wilson ‐ Chief Financial Officer • Strong At‐Home performance partly offsetting Out‐of‐ Home challenges • Relentless focus on cash and cost efficiency • Robust liquidity position and strong balance sheet
Slide 17: Significant impact on finance metrics from COVID-19; decisive action on mitigations
As anticipated, significant impact on finance metrics from COVID‐19; decisive action taken on mitigations Metric Reported Adjusted % Revenue £1,412.4m (6.8%) Adjusted EBIT £165.8m (21.9%) Adjusted EBIT Margin 11.7% (230bps) Adjusted EPS 43.2p (27.8%) Dividend per share 21.6p (28.0%) Adjusted Net Deb
Slide 18: Disciplined cash management largely offsetting the reduction in profits
Disciplined cash management largely offsetting the reduction in profits 100 88.4 2.5 90.0 90 5.0 80 24.8 70 48.3 60 50 22.6 40 30 20 10 0 FY19 Free Cash Flow Adj EBIT Working Capital Capital Spend Reduction in GB Others FY20 Free Cash Flow Pension Plan Contribution Britvic plc Preliminary Results 20
Slide 19: 2020 price/mix adversely impacted by shift to At-Home consumption
2020 price/mix adversely impacted by shift to At‐Home consumption Group 2020 Volume, Price/mix & Revenue 10% • Robust start to the year with revenue and EBIT growth pre‐pandemic 5.3% 5% • Q3 (April – June) revenue ‐16.3% reflecting full impact of spring lockdown 1.4% 0% • Q4 (July‐Sep) sequential im
Slide 20: Early trading in 2021 continues to reflect pandemic-related restrictions
Early trading in 2021 continues to reflect the impact of pandemic‐related restrictions Segmental 2021 Volume Trends • At‐Home channels continue to be robust, with double‐digit volume growth and further market share gains 21.1% 12.1% • Out‐of‐Home consumption impacted by lockdown restrictions and soc
Slide 21: 2020 Business Unit Highlights
2020 Business Unit Highlights GB BRAZIL REST OF WORLD Volume (2.2%) +13.0% (6.4%) ARP per litre (4.4%) (0.4%) (5.8%) Revenue (6.4%) +12.4% (11.8%) Brand contribution (9.8%) +7.9% (10.4%) Brand margin % (150bps) (90bps) +50bps GB BRAZIL REST OF WORLD • Market share gains in key categories minimised •
Slide 22: Rapid and disciplined management of fixed costs
Rapid and disciplined management of fixed costs % Constant FY 2020 Exchange Rate • £20m A&P saving in response to Total A&P spend £46.0m 29.7% pandemic A&P as a % of revenue 3.3% (110bps) • 10.4% increase in Fixed Supply Chain Non‐brand A&P £10.2m 2.9% due to depreciation, sustainability Fixed Suppl
Slide 23: Adjusting Items ahead of original guidance
Adjusting Items ahead of original guidance due to accelerated delivery of strategic initiatives £m Strategic restructuring costs 12.9 Impairment of assets 8.4 M&A 5.2 Other 0.4 Total excluding acquisition‐related amortisation 26.9 Acquisition‐related amortisation 8.8 Total 35.7 Includes £0.2m financ
Slide 24: Strong balance sheet underpins the strategy
All scenario models indicate headroom on debt Strong balance sheet underpins the strategy covenant tests in 2021 with a peak at HY21 • Financing • Access to £1bn of debt facilities; £65m of debt maturing in H1 2021 • Ample liquidity with undrawn RCF of £400m at end FY20 2.5 2.4 2.4 • Scenario modell
Slide 25: 2021 modelling considerations
2021 modelling considerations Input cost inflation Low single digit inflation Capital spend Anticipate £70m to £80m, with H1 spend c.£20m to £25m P&L £13m to £15m, including c.£8m of non‐cash recurring fair value amortisation. Adjusting items Cash impact £15m to £20m Pension deficit cash contributio
Slide 26: Robust performance despite significant financial impact from COVID-19 in H2
Robust performance despite significant financial impact from COVID‐19 in H2 • Quick and decisive action taken to partially mitigate the profit and cash impacts from COVID‐19 • Ongoing support for our people, customers, suppliers and communities • Demonstrated flex and agility across the business to
Slide 27: Simon Litherland – Chief Executive Officer: Looking forward
Simon Litherland – Chief Executive Officer Looking forward: • Britvic is well positioned for future growth • We are responding with agility to changing consumer and customer trends • Clear growth strategy to deliver compelling returns
Slide 28: We are confident in our inherent strengths
We are confident in our inherent strengths: • Strong multi‐channel route to market and exposure to multiple geographies • Broad Portfolio of #1 and #2 brands, both company‐owned and through long‐term partnership with PepsiCo • Collaborative customer relationships grounded in leading category insight
Slide 29: Our strategy will drive long term growth
Our strategy will drive long term growth Build local favourites and Flavour billions of Healthier People | Innovate to access Strategic Priorities global premium brands water occasions Healthier Planet new spaces Market Focus ROW Lead market Globalise premium brands & improve Accelerate and growth p
Slide 30: Britvic is responding to changing consumer trends
Britvic is responding to changing consumer trends CONSUMERS ARE SEEKING: BRITVIC IS RESPONDING BY: • Trust & family • Investing in our family favourites Quality family time, known and trusted brands • Value for money: • Revenue management and using supply £ Greater value for money, as the recession
Slide 31: Customers are adapting to accelerating trends
Customers are adapting to accelerating trends, largely caused by the pandemic CUSTOMERS ARE ADAPTING: BRITVIC IS WELL PLACED TO CAPITALISE: • Rapid expansion of online grocery, • Upweighting e‐commerce and digital takeaway and direct to consumer • Building from strength with 22% share in GB • Simpli
Slide 32: Resilient, robust and confident of future growth
Resilient, robust and confident of future growth • We have continued to execute well through the pandemic • We have demonstrated tight operational control, agility, pace and resilience • We have reshaped our business for the future via acquisition, disposals and 20‐year renewal of PepsiCo partnershi
Slide 33: Q&A
Q&A WEBCHAT Ask a question through the webcast online chat. The question will be read out for you IN PERSON Dial in using the telephone numbers in the table UK dial 0203 868 4725 When prompted enter the access code 597848 Britvic plc Preliminary Results 2020