A.g. Barr P.l.c. · LSE:BAG
A.g. Barr P.l.c — FY2022/23 Earnings Presentation
35 slides from A.g. Barr P.l.c's earnings presentation, Jan 29, 2023
Slide 1: Final Results
Final Results 52 weeks ended 29 January 2023
Slide 2: Agenda
Agenda ● Welcome & introduction ● Financial review Roger White Chief Executive ● 2022/23 execution ● Summary ● Appendices Stuart Lorimer Finance Director 2
Slide 3: Welcome and Introduction
3 WELCOME AND INTRODUCTION Roger White
Slide 4: Highlights
Highlights A stronger more sustainable business ● Excellent financial performance ● Significant progress across our strategic objectives ● Continued investment in our brands, operations and people, driving innovation and delivering strong organic growth ● Boost and MOMA acquisitions - demonstrating
Slide 5: Financial Review
5 FINANCIAL REVIEW Stuart Lorimer
Slide 6: Financial scorecard
Financial scorecard 6 Adjusted metrics remove the 53rd week from the prior year, one-off gains and losses associated with M&A, and property sale gains from both years Like-for-like metrics remove the 53rd week from prior year, and the revenue impact associated with MOMA and Boost acquisitions 6
Slide 7: Profit bridge
Profit bridge Reported PBT + £2.2m (5.2%) Adjusted PBT +£5.1m (13.3% ) 7 Adjusted metrics remove the 53rd week from prior year, the impact of non operational items such as M&A, and property sales 7
Slide 8: Gross margin
Gross margin Soft Drinks : 86% of gross profit Price and mix driven revenue growth (3.8)pp (1.9)pp (8.4)pp (3.8)pp Margin constrained by cost inflation and first time inclusion of structurally lower margin Boost Cocktail solutions : 12% of gross profit Strong volume related revenue growth across por
Slide 9: Commodities and cost base
Commodities and cost base Energy General Aluminium Gas inflation Extreme Other inc. and Average price 2022 Average price 2022 Marketing volatile +9% +135% inflation v 10 year average v 10 year average Materials Employee Sugar Mango Costs Average price 2022 Average price 2022 Sustained +1% +50% infla
Slide 10: Operating costs and margin
Operating costs and margin Operating expenses (£m) Selling & distribution costs (£m) January January 2023 2022 Movement % BSD/Funkin 80.8 76.0 4.8 6.3% MOMA/Boost 4.0 0.6 3.4 Adjusted overheads 84.8 76.6 8.2 10.7% Administration costs (£m) Adjusting items (0.7) - (0.7) Reported overheads 84.1 76.6 7
Slide 11: Cash flow
Cash flow Strong cash generation from operations utilised in line with capital allocation principles Corporation tax expense £10.5m Capex additions £17m Final dividend £46.7m growth cash generation before 6% allocation 11
Slide 12: Acquisitions
Acquisitions Total 61.8% investment Dec 2021 100% acquired Dec 2022 100% acquired Dec 2022 Total consideration - 21/22 - 6.2 6.2 Total consideration - 22/23 19.9 3.4 23.3 Total consideration 19.9 9.6 29.5 Balance Sheet Value on Acquisition Brand value 16.9 8.4 25.3 Goodwill 1.9 1.0 2.9 Other net ass
Slide 13: 2023/24 Outlook
2023/24 Outlook Group revenue growth +20% Revenue - Full year contribution from Boost portfolio. Excluding Boost portfolio c.7-8% - Incorporates our current estimated impact of DRS Operating margin slightly lower than 2022/23 - Invest for growth phase Margins - Commodity pricing to remain inflated i
Slide 14: 22/23 Execution
14 22/23 Execution Roger White
Slide 15: Connecting with consumers
Connecting with consumers 2022 Highlights Taste Debate campaign - reached 90% of all 16-30 yr olds across Scotland and northern England A Force of Nature - Rubicon RAW Energy’s multi million pound advertising and sponsorship campaign - more than 25 million cans sold since launch It’s FUNKIN Time, bi
Slide 16: Building brands
Building brands Building a multi-beverage portfolio ● Successful acquisition of Boost and MOMA M&A target characteristics businesses FMCG Beverage- Bolt-on UK bias ● High growth categories where our brand Branded focused building expertise and scalable business model can add significant value M&A dr
Slide 17: Building brands
Building brands Strong brand momentum across Group portfolio Revenue v 21/22 1 6% 21% 15% 19% 41% 26% 19% 11% 16% 41% 2 22% 2 Revenue v 20/21 25% 72% 19% 47% 89% 39% 131% 79% 152% - - % of Group portfolio 38% 20% 12% 4% 2% 2% 2% 2% 13% 3% 2% 3 Notes : 1 - 2021/22 was a 53-week year 2 - MOMA and Boos
Slide 18: Driving efficiency
Driving efficiency ● Core BSD business model - Make, Move, Market, Sell ● Scalable and capable of supporting wider Group ○ In-house sourcing, recipe development and packaging expertise ○ Incremental capacity potential within existing production infrastructure ○ Efficient distribution network operati
Slide 19: Building trust
Building trust ✓ Continued ✓ Approved ✓ 98% of portfolio ✓ New Mental health science-based exempt from employee-chosen support and net zero SDIL and HFSS charity ✓ Two special cost targets ✓ Investment in new partnership with of19living ✓ 100% rPET first R&D facilities Marie Curie employee productio
Slide 20: DRS in Scotland
DRS in Scotland ● Go-live August 2023 ● Year 1 producer fees to fund running costs - updated in December : PET : 2.21p Metal : 2.03p Glass : 4.10p UK-wide SKU surcharge : 1.133p ● VAT now being applied to unredeemed deposits ● AG Barr approach : Scotland specific SKUs for all owned brands - minimisi
Slide 21: 2023/24 Investment phase
2023/24 Investment phase ● Barr Soft Drinks ○ further investment in asset base ○ distribution-led sales growth ● FUNKIN ○ increased investment in portfolio and innovation ○ international push ● MOMA ○ growth investment ○ team development ○ brand and commercial drive ● Boost - light touch initially -
Slide 22: Long-term growth and value creation
Long-term growth and value creation Business re-org & MK Business Cumbernauld manufacturing re-engineering manufacturing Acquisition investment programme Acquisitions investment 2015 2016 2017 2019-20 2022 2023 - 2025 2015 3-year plan 2023 Investment phase 2024 Margin rebuild 2025 Target operating m
Slide 23: Summary and outlook
Summary and outlook An excellent financial performance in 2022/23 Tangible progress in building a multi-beverage branded business of scale Significant potential to grow the business organically and through further acquisitions Anticipate further revenue and profit growth across the Group during the
Slide 24: Appendix 1: Market update
24 APPENDIX 1 Market update
Slide 25: Total UK soft drinks market
Total UK soft drinks market Total UK soft drinks value Total UK soft drinks volume 8.8% 2.2% Carbonates value Carbonates volume 8.7% 1.6% Stills value Stills volume 8.9% 2.7% Source : IRI Marketplace 52 weeks to 28/01/23 25
Slide 26: Total UK soft drinks market - sub categories
Total UK soft drinks market - sub categories Source : IRI Marketplace 52 weeks to 28/01/23 26
Slide 27: Cocktail market dynamics (on-trade)
Cocktail market dynamics (on-trade) Value of cocktails in Share of spirits through cocktails GB £686m 7.3% +1.4% +13.6% No. of outlets stocking GB consumers drinking cocktails cocktails out of home 44.5K 9.6m +6% +6.7% 1 # Pornstar Martini # 2 Sex on the Beach 3 # Mojito #4 Flavoured Daiquiri martin
Slide 28: Plant-based milk market
Plant-based milk market Oat continues to outperform other milk alternatives with 11% growth in the L52 vs. category -1% and over 50% of the RSV within grocery 28 Source: Nielsen Major Mult Grocers excl. discounters, L52 WE 18th Feb 2023 28
Slide 29: Appendix 2: Boost & MOMA overviews
29 APPENDIX 2 Boost & MOMA overviews
Slide 30: Boost - Basics
Boost - Basics https://www.boostdrinks.com/ ● Founded in Yorkshire in 2001 by Simon Gray - headquartered in Leeds ● A portfolio of attractive brands operating in high growth and functional categories spanning energy, sport, iced coffee and protein ● Strong market position in the UK independent retai
Slide 31: Boost - Brands
Boost - Brands Energy Sport Iced coffee Protein Rio 5% 1% Percentage of FY21A gross sales 31 31
Slide 32: MOMA - Basics
MOMA - Basics https://www.momafoods.co.uk/ ● Founded in 2006 by Tom Mercer - based in Deptford, London ● Uses a blend of high quality wholegrain jumbo oats in its oat drinks (68% of revenue) and porridge products (32% of revenue) ● Investing for growth within fastest growing plant based milk categor
Slide 33: Appendix 3: Accounting
33 APPENDIX 3 Accounting
Slide 34: Adjusting items reconciliation - January 2023
Adjusting items reconciliation - January 2023 MOMA Boost acquisition Gain on sale of acquisition Reported P&L impact property fees Boost earn-out Adjusted P&L £m £m £m £m £m £m Revenue 317.6 - - - - 317.6 Cost of sales (189.5) - - - - (189.5) Gross profit 128.1 - - - - 128.1 Other income 1.3 - (1.3)
Slide 35: Adjusting items reconciliation - January 2022
Adjusting items reconciliation - January 2022 P&L before Gain on sale of exceptional Extra week Reported P&L property items trading Adjusted P&L £m £m £m £m £m Revenue 268.6 - 268.6 (6.8) 261.8 Cost of sales (150.0) - (150.0) 3.7 (146.3) Gross profit 118.6 - 118.6 (3.1) 115.5 Other income 0.7 (0.7)