Nichols Plc · LSE:NICL
Nichols — FY2021 Earnings Presentation
35 slides from Nichols's earnings presentation, March 2022
Slide 1: Year End 2021
YEAR END 2021 PRESENTED MARCH 2022
Slide 2: Our Purpose
NNI ICCHHOOLLSS PPLLCC –– YYEEAARR EENNDD E2 D0 221 0 2 0 PURPOSE OUR
Slide 3: Agenda
AGENDA NNI ICCHHOOLLSS PPLLCC –– YYEEAARR EENNDD E2 D0 221 0 2 0 ANDREW DAVID ANDREW MILNE RATTIGAN MILNE Chief Executive Chief Financial Chief Executive Officer Officer Officer STRATEGIC & FINANCIAL LOOKING FORWARD – OPERATIONAL REVIEW AND A CLEAR FOCUS REVIEW OUTLOOK
Slide 4: 2021 Highlights
2021 HIGHLIGHTS • Strong revenue growth on Vimto in UK and Internationally • Accelerated growth delivered across Africa NNI ICCHHOOLLSS PPLLCC –– YYEEAARR EENNDD E2 D0 221 0 2 0 • Resilient performance across the Middle East • Strong investment in the Vimto brand • Continued progress against our Hap
Slide 5: Strategic & Operational Review
N I C HN OI CLHS OPL LSCP –L CH A– LYF E YAERA ER NJDUE2ND0E 2 201 02 20 1
Slide 6: UK Soft Drinks Market
UK SOFT DRINKS MARKET PERFORMANCE WINNERS LOSERS Total ‘take home’ Soft Squash Energy Drinks Value Volume Value Volume Value £9.6bn -4.6% -6.9% N I CNHI OC HL OS LPS LPCL C– –Y EY AE AR REENNDD E2 D0 2210 2 0 +15.9% +6.3% Volume 7.9bn liters Cola Mixers Value Volume Value Volume +4.8% +1.5% -6.4% -1
Slide 7: Vimto in Growth Across All Sub-Categories
VIMTO IN GROWTH ACROSS ALL 3 SUB-CATEGORIES SQUASH FLAVOURED RTD’s STILL JUICE DRINKS CARBS N INCIHCOHLOSL SP LPCL C– –Y EYAERA RE NE DN D2E0D2 12 0 2 0 Value Value Value Value Value Value -4.6% +5.7% +9.7% +2.7% +15.2% +15.9% Volume Volume -6.9% Volume Volume Volume Volume -6.2% +2.1% +3.3% +10.9%
Slide 8: UK Packaged
UK PACKAGED STRONG PERFORMANCE ACROSS ALL CHANNELS N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 Van sales Fortified squash & our broadest Driving visibility at the point of Focus on driving points of flavour range ever! purchase distribution across Impulse Bigger packs drove share & Power brand
Slide 9: New & Exciting Marketing Campaign
NEW & EXCITING MARKETING CAMPAIGN National above the line New creative aired April- Digital, social & campaign reaching 81% Sept across TV, VOD, influencer campaign of mums 5+ times Outdoor & In-store
Slide 10: International – Middle East
INTERNATIONAL – MIDDLE EAST A RESILIENT PERFORMANCE N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 Outstanding market execution Launch of the first no added sugar Strong brand investment as ‘Sweet delivering strong brand visibility cordial across the region Togetherness’ campaign is and availabil
Slide 11: International – Africa
INTERNATIONAL – AFRICA ACCELERATED GROWTH N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 Strong marketing campaigns were Launch of new branding across a New products and flavours launched across a number of key range of countries within the continue to attract new shoppers occasions throughout 20
Slide 12: Out of Home
OUT OF HOME • Significant impact on the sector due to Covid and the subsequent outlet closures N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 • Growth delivered in 2021 versus 2020 • 2021 is still behind 2019 levels INSERT PICS HERE • Impairment charge, impairing the entire goodwill • A strategic
Slide 13: Brand with Purpose / Climate Control / Consumer Relevance
N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 Brand with Purpose Climate Control Consumer Relevance Making the world feel better one sip at An ambition to reach net zero by 2030 Sustainable programs for consumers a time Building a Community Digital First More Cans on Shelves Events and influence
Slide 14: Financial Review
N I CNHIOC LHSO LPSL CP L–C H–A LYFE AYRE AERN DJEU2DN0E2 0122002 1
Slide 15: Revenue
REVENUE Strong Group performance across all 3 routes to market • Broadly back to pre-pandemic FY19 levels FY21 FY20 Movement UK Packaged up +8.5% Revenue 144.3 118.7 21.6% • Vimto and Levi Roots • Vimto brand value +6.3%1 • + Squash, + Carbs and + Still • +13.2%2 versus FY19 N I NC IHCOHLO SL SP PL
Slide 16: Adjusted PBT
ADJUSTED PBT Gross Profit up +£15.6m & +3.4ppt to 45.2% • % Broadly back to FY18, FY17 levels of 45.7% • FY19 47.6% FY21 FY20 Movement Volume growth +£9.4m Adjusted profit before tax 21.8 11.6 87.9% Mix and margin management +£6.2m • SBT investment reduced and now complete +£2.7m £21.8 • Customer mi
Slide 17: PBT - Exceptionals
PBT - EXCEPTIONALS Significant exceptional cost -£39.5m • Largely non cash • 2020: -£5.1m Adj FY21 FY21 Profit/(loss) before tax 21.8 (17.7) UK Packaged Supply Chain -£0.6m • Successful capacity and capability development £21.8 • Logistics • Manufacturing N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N
Slide 18: Cash
CASH Key pandemic focus area FY21 FY20 Movement • Cash has been a focus through the pandemic Cash and Cash Equivalents 56.7 47.3 19.8% • Cash conversion +103% • +186% in 2020 £56.7 • as working capital unwound N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 £47.3 Significant stock build
Slide 19: Dividend Proposal & AGM
DIVIDEND PROPOSAL & AGM • In 2020 the Board advised a dividend policy of broadly 2x cover • balances shareholder distributions with the investment needs and growth opportunities of the business post- pandemic N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 • Adjusted Earnings Per Share
Slide 20: Business Shape vs 2019
BUSINESS SHAPE Vs 2019 UK packaged, up +12% • Vimto brand has outperformed FY21 FY19 Movement • Vimto brand value +13.2%1 • Soft drinks +11.0%1 Revenue 144.3 147.0 (1.8%) • powered by cola, energy, mixers and rtd coffee • where Vimto does not operate • Significant distribution gains • Exciting impro
Slide 21: Adj PBT vs 2019
ADJ PBT Vs 2019 Adjusted PBT -£10.6m Gross profit down -£4.8m (-7%) & -2.4ppts to 45.2% FY21 FY19 Movement Volume down -£1.3m Adjusted profit before tax 21.8 32.4 (32.7%) Mix & margin management down -£3.5m • SBT investment -£0.8m (0.6ppt of gross profit margin) £32.4 • Product Mix +£0.8m • UK Packa
Slide 22: ROCE
ROCE 1 ROCE 37% without including cash in capital employed, 20% including cash • cash reserves have consistently grown and are strong The Group has invested £54m (2013-21) • £27.6 acquisitions • £26.4m in property, plant and machinery N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 - la
Slide 23: Take Outs
TAKE OUTS 2019 revenues largely delivered but without full recovery of Adjusted PBT • different shape and focus for the business exiting the pandemic Vimto is the real long-term winner • flexible and resilient • significant organic growth headroom across the UK (national) and Internationally (Africa
Slide 24: Near Term
NEAR TERM Some significant headwinds to navigate • Out of home financial impact and longer-term approach - Covid 19 impact will unwind, this will be positive - Products and customer review N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 - Route to market operational review - Higher OoH
Slide 25: Outlook – FY22 and FY23
OUTLOOK – FY22 and FY23 N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 Guidance remains unchanged The Group’s Adjusted Firm focus on strategic Navigating short FY23 high single PBT expectations for agenda; terms headwinds; digit Group the year FY22 1 are Adjusted PBT unchanged Vimto in
Slide 26: Nichols plc – Year Ended 2020
NICHOLS PLC – YEAR ENDED 2020
Slide 27: Happier Future
N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 HAPPIER FUTURE
Slide 28: Strong Progress Being Made on the ESG Strategy
STRONG PROGRESS BEING MADE ON THE ESG STRATEGY N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 Putting our people first Healthier Hydration Direct Emissions • New I&D policy in 2021 • UKP Average sugar content 8g - 5g/100ml • Scope 1+2 reduction 1663 - 1201 tCO2e (from 2012 to 2021) (fr
Slide 29: Key Strategic Areas of Focus
5 KEY STRATEGIC AREAS OF FOCUS N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 A clear focus to drive accelerated Set ourselves up to win in the long A strategic review across our Out growth across our UK and term through our operational of Home business to build the Intentional packaged businesse
Slide 30: Summary
SUMMARY • A strong diverse business with excellent momentum on the Vimto brand • Highly profitable and cash generative with a strong balance sheet N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 • A clear focus on 5 strategic drivers • Outlook for 2022 in line with expectations • Confid
Slide 31: THE
N I C H O L S P L C – Y E A R E N D E2D0 2 01 2 0 THE
Slide 32: Appendices – Consolidated Income Statement
APPENDICES Audited Audited Consolidated Income Statement Year ended Year ended 31 December 31 December 2021 2020 £’000 £’000 Continuing operations Revenue 144,328 118,657 Cost of sales (79,153) (69,021) Gross profit 65,175 49,636 N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 Distribut
Slide 33: Appendices – Consolidated Statement of Financial Position
APPENDICES Consolidated Statement of Financial Position Audited Audited Audited Audited N I NC IHCOHLO SL SP PL LCC –– YYEEAA RR E N DDE 2D 022012 0 Audited Audited 31 December 31 December 31 December 31 December 31 December 31 December 2021 2020 2021 2020 2021 2020 ASSETS £’000 £’000 LIABILITIES £’
Slide 34: Appendices – Consolidated Cash Flow
APPENDICES Audited Audited Year ended Year ended Consolidated Cash Flow 31 December 2021 31 December 2020 £’000 £’000 £’000 £’000 Cash flows from operating activities (Loss)/profit for the year (22,168) 4,854 Adjustments for: Depreciation and amortisation 4,969 4,971 Impairment losses on goodwill an
Slide 35: NNI CI CH HO OL LS SP PL LC C– –YYEEAARR EENNDDE 2D 2
NNI CI CH HO OL LS SP PL LC C– –YYEEAARR EENNDDE 2D 0 22 01 2 0