Britvic — Investor Presentation (July 2010)
41 slides from Britvic's investor presentation, July 2010
Slide 1: LOW CALORIE INDIAN om isis E Sony ane E
LOW CALORIE INDIAN om isis E Sony ane E TONIC WATER | w me ah oO" ee ' pring att K ela te z —_ » 160ml paper Pure Irish Still Water Ne = le r | IDRIS epee SHANDY S/enercy orik = BASS
Slide 2: The Investment Case
The Investment Case Britvic is a leading branded soft drinks business in the UK, France and Ireland STRONG MARKET POSITIONS A POWERFUL AND RESILIENT BRAND PORTFOLIO •#1 in UK stills •#1 in UK Licensed On-Premise •#1 or #2 brands in the key (with the #1 cola) categories •#2 in UK carbonates •Barriers
Slide 3: A Clear Strategy for Growth
A Clear Strategy for Growth The Preferred Brands for Consumers Drive Availability where products not sold Grow through Innovation Grow Prices Optimising Efficiency and Cash Generation Expand in Europe VALUE CREATION 3
Slide 4: Drivers Of GB Growth In The Medium Term
Drivers Of GB Growth In The Medium Term Market Volume Growth: 2-3% Significant Distribution Opportunities A Proven Contribution From Innovation ARP Up At Least 1% Through Mix, Promotion Management and Headline Increases 4
Slide 5: Channels to Market in GB
Channels to Market in GB Grocery Licensed Impulse Food Service • Retail value • Retail value • Retail value • Retail value £4.4bn £2.4bn £1.8bn £6.0bn* • Britvic share • Britvic share • Britvic share • Britvic share 12.6% 47.5% 9.9% 7.0% • Number 2 • Number 1 • Number 3 • Number 3 supplier supplier
Slide 6: An Unrivalled Carbs and Stills On-The-Go Portfolio
An Unrivalled Carbs and Stills On-The-Go Portfolio 2005 (IPO) 2010 6
Slide 7: Gaining Real Traction Across On-The-Go
Gaining Real Traction Across On-The-Go 7
Slide 8: The 2010 GB Innovation Programme
The 2010 GB Innovation Programme New New Brand Brand Pack Pack&& Brands Brands Extensions Extensions Experience Experience 8
Slide 9: Group Performance in H1
Group Performance in H1 +4.6% +8.8% +150bps +37.7% +14.6% Additional GB/Int’l Group EPS Interim group revenue EBIT continues dividend revenue maintained margin up to grow increase strong growth growth Note: All numbers are pre-exceptionals unless stated otherwise 9
Slide 10: Financial Headlines
Financial Headlines H110 H109 % £’m £’m change Revenue 505.3 483.2 4.6 EBIT 40.7 31.9 27.6 EBIT Margin 8.1% 6.6% 150bps Profit After Tax 20.5 14.8 38.5 Free Cashflow (50.0) (24.6) (103.3) Adjusted Net Debt (442.4) (442.7) 0.1 Basic Earnings Per Share 9.5p 6.9p 37.7 Interim Dividend Per Share 4.7p 4.
Slide 11: Transaction Highlights
Transaction Highlights the leading independent soft-drink company in France Number 1 and 17% value Number 2 share of Revenue syrup French €256.3m / Track brands pure juice EBITDA record of €24.8m* successful innovation Revenues Split Broadly Evenly Between Brands and Private Label 11 Sources: IRI, m
Slide 12: Transaction Highlights
Transaction Highlights Acquisition of Fruité Entreprises for a consideration of €237m Headline multiple: 9.6x EV/EBITDA Post-synergy multiple (after costs to achieve): 6.4x EV/EBITDA Funded from existing debt facilities and an underwritten c.10% equity placing Substantial strategic and financi
Slide 13: Strategic Rationale
Strategic Rationale Significant strategic step for Britvic Number 1 syrup/squash positions in UK, France and Belgium – also adds penetration into Netherlands, Denmark, Portugal, Switzerland and Spain Complementary expertise from operation of pure juice business Platform to distribute enhanced
Slide 14: Strategic Rationale
Strategic Rationale Broadening the Britvic portfolio Adding pure juice, syrups and ambient smoothies fills material category gaps Differentiated offering to enhance proposition to UK consumers Access to new formats, packaging types Consistent with stated M&A strategy Britvic is an experience
Slide 15: Strategic Rationale
Strategic Rationale Clear and achievable synergies by 2013 €10m cost synergies Procurement and Supply-Chain Accelerated implementation of Business Transformation €7m near-term revenue synergies Launch Fruit Shoot into the French market Further revenue upside from: Potential for other U
Slide 16: The Future For Fruité
The Future For Fruité An Experienced Driving Britvic’s And Highly-Capable Category And Management Team Channel Expertise Significant A Relevant Role Potential for UK For Private Label Brands In France 16
Slide 17: Summary
Summary Revenue Growth Driving Earnings Momentum Margin Expansion Through A Clear Cost Focus A Strategic Step Into Continental Europe 17
Slide 18: ) | Waly, RED DEVI SHANDY
——_“ ) | Waly, RED DEVI SHANDY IDRIS Fromm S/nercy orIK BASS RINKS COMPAN) bi
Slide 19: Appendix
Appendix LOW CALORIE INDIAN TONIC WATER es 160ml : With peg REALLY nso peur SHANDY PRIS rely Eee WD vec | BASS d a ASS BEER
Slide 20: Market Leading Syrups Brands - Teisseire
Market Leading Syrups Brands - Teisseire Main Product Range 19 flavours Traditional metal can container New Drinks New sensations 4 exotic flavours Recent Innovation Teisseire sirop pour le sport (2009) Teisseire 0% (2007) 35% Category Share By Value 20 Source: IRI
Slide 21: Market Leading Syrups Brands – Moulin de Valdonne
Market Leading Syrups Brands – Moulin de Valdonne High-End Traditional Syrups The benchmark for traditional and natural/organic syrups Three Strands Bio (Organic) Cocktail Tradition Recent Innovation 2009 launch of the Organic range The new Provençal recipe 6% Category Share By Value 21 Source: IRI
Slide 22: Market Leading Pure-Juice Brands – Fruité
Market Leading Pure-Juice Brands – Fruité Maxi Fruité 100% juice for all the family Matin d’Orange and Energie Products for breakfast Recent Innovation First ambient smoothie for families First family-sized organic nectar 3% Category Share By Value 22 Source: IRI, Vendor Due Diligence
Slide 23: Market Leading Pure-Juice Brands – Pressade
Market Leading Pure-Juice Brands – Pressade Positioning Around Quality and Authenticity Organic Juices Affordable juice for the whole family Recent Innovation Fruité and Pressade account for more than 45% of the brand innovations in the ambient juice category 34% Category Share By Value Of Organic A
Slide 24: The Importance Of Private Label
The Importance Of Private Label Syrups Pure Juice Private-label activity Produced mainly for allows Fruité to be hyper & the category captain supermarkets and additionally to: Private label is ¾ Monitor entire c.70% of the juice market market ¾ Strengthen Optimises relationships with product
Slide 25: Fruité's Existing Network
Fruité’s Existing Network Fruité has 4 production sites SYRUP Annecy Crolles Pure Juice JUICE La Roche sur Foron Chateau Thébaud Nissan Lez Enserune Head office in Annecy Syrup 511 FTEs across the network 25
Slide 26: Financials
Financials €’m 2007 2008 2009 CAGR Revenues 209.6 234.0 256.3 10.6% Underlying 14.5 17.0 24.8 30.6% EBITDA EBIT 10.1 12.7 19.7 39.7% €’m 2010 2011 2012 2013 Synergy Savings 0.2 4.1 13.6 17.3 (Cum ongoing) One-off - 2.7 1.4 2.4 Benefit Capex 0.8 25.3 8.2 1.8 One-off 0.3 1.9 0.5 0.4 Costs Source: Vend
Slide 27: The French Soft-Drinks Market
The French Soft-Drinks Market A €12.5bn Market Source: Euromonitor, 2009 (value) 27
Slide 28: The French Syrups Market
The French Syrups Market Sales Growth in Take Home (€m) 5yr CAGR Market Sales Split by Channel, 2009 1.6% Source: IRI Take-Home market data in the first chart excludes syrups sold through the hard-discount distribution channel 28
Slide 29: The French Pure-Juice Market
The French Pure-Juice Market Sales Growth of Ambient Market Sales Split by Juice Type, Pure Juices (€m) 2009 5yr CAGR 5.4% Source: IRI 29
Slide 30: Debt Structure
Debt Structure Pre-Acquisition (£m equivalent) Facility Maturities Drawing Headroom Size Bank Loans 333.3 2010 69.8 263.5 2014/2017/ US PP – Issued 2007 228.5 228.5 - 2019 2014/2016/ US PP – Issued 2009 149.8 149.8 - 2017/2019 Cash / Overdraft / Other - - (5.7) - TOTAL 711.6 - 442.4 263.5 Post-Acqui
Slide 31: GB Soft Drinks Market Volume
GB Soft Drinks Market Volume Source: ACNielsen Scantrack Apr 2010: Take Home 31
Slide 32: GB Market Volumes And Growth Rates – H1
GB Market Volumes And Growth Rates – H1 (0.4)% 2.9% 1.2% (13.2)% 4.0% (1.4)% Carbs (6.0)% (1.2)% (3.6)% (1.8)% 15.6% 14.4% (4.1)% (1.9)% (2.6)% 1.2% (2.3)% (0.9)% DIET / LOW CAL (0.9)% (1.0)% 6.5% REGULAR / FULL SUGAR (0.2)% (0.4)% (0.3)% (8.1)% 2.6% 0.1% TOTAL MARKET UP 1.4% Stills (27.8)% 13.6% 4.
Slide 33: Irish Soft Drinks Market Volume
Irish Soft Drinks Market Volume 30,000 2010 2009 2008 Volume (‘000s litres) 25,000 20,000 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Source: AC Nielsen Scantrack ROI Grocery to 21st March 2010 33
Slide 34: Irish Market Volumes and Growth Rates – H1
Irish Market Volumes and Growth Rates – H1 (0.7)% (4.5)% 5.3% 2.7% (12.6)% 2.1% 10.4% 19.1% TOTAL MARKET UP 2.8% (2.3)% CARBS MARKET DOWN 1.5% 11.8% STILLS MARKET UP 9.1% (9.8)% Volume (‘000s litres) Source: AC Nielsen Scantrack ROI Grocery to 21st March 2010 34
Slide 35: Brands Review - GB
Brands Review - GB Share growth in Take Home +0.3% The number one cola in Licensed Share growth in Take Home +0.6% Fastest growing Lemon and Lime Share growth in Take Home +0.8% Consolidating the revitalisation of Tango Source: AC Nielsen Scantrack volume to 10th April 2010 35
Slide 36: Brands Review - GB
Brands Review - GB Share growth of +1.3% in Take Home Robinsons brand innovation Share growth of +0.6% in Take Home Early signs of success for “My 5” Share growth of +1.1% in Take Home Lighter J2O launched Source: AC Nielsen Scantrack volume to 10th April 2010 36
Slide 37: Cashflow
Cashflow H110 H109 % £m £m change EBIT 40.7 31.9 27.6 Depreciation & amortisation 21.3 21.6 (1.4) EBITDA 62.0 53.5 15.8 Working capital (58.2) (23.9) (143.5) Capital expenditure (24.7) (26.5) 6.8 Pension contributions (11.6) (10.0) (16.0) Other (17.5) (17.7) 1.1 Free cashflow (50.0) (24.6) (103.3) D
Slide 38: Continuing Our Strong Track Record
Continuing Our Strong Track Record GB/INT’L REVENUE (£m) GB/INT’L EBIT (£m) 5.6% CAGR 10.9% CAGR GROUP EPS (p) FREE CASHFLOW (£m) CAGR 17.6% £250M in 4 years 38 Note: All numbers are pre-exceptionals unless stated otherwise
Slide 39: The ADR Programme
The ADR Programme Britvic’s ADR shares trade on the US over-the- ADR Benefits to US counter (OTC) market under the following Investors: information: ADRs give access to cross-border market • Symbol BTVCY liquidity ADRs are cost-effective • CUSIP 111190104 ADRs are convenient to • Ratio 1 ADR :
Slide 40: Strong GB Market Positions
Strong GB Market Positions Stills (£3.4bn) Carbonates (£2.8bn) Take Home (£6.2bn) Stills (£0.6bn) Carbonates (£1.8bn) Licensed (£2.4bn) 40 Source: AC Nielsen Scantrack data to 10 April 2010 & Licensed On Trade data to January 2010 Total Coverage MAT
Slide 41: Innovations - 2008 & 2009
Innovations - 2008 & 2009 Recent Brands Brand Extensions Pack & Experience 41