Britvic plc Annual Report 2007
Contents 02 Our Brands 08 Chairman’s Statement 09 Operating and Financial Review 09 Chief Executive’s Review 14 Current Trading and Outlook 14 Financial and Business Review 18 Business Resources 19 Risks and Uncertainties 20 Corporate Responsibility 22 Board of Directors 24 Reports and Accounts Contents 25 Directors’ Report 29 Corporate Governance 33 Directors’ Remuneration Report 40 Independent Auditor’s Report to the Members of Britvic plc 41 Consolidated Income Statement 42 Consolidated Balance Sheet 43 Consolidated Statement of Cash Flows 44 Consolidated Statement of Recognised Income and Expense 45 Notes to the Consolidated Financial Statements 85 Independent Auditor’s Report to the Members of Britvic plc 86 Company Balance Sheet 87 Notes to the Company Financial Statements 92 Shareholder Information
Financial Highlights * Total branded revenue £716.3m, up 5.7% EBITDA 1 £126.3m, up 4.4% Operating profit £80.0m, up 8.5% Operating profit margin 11.2%, up 30 basis points Free cash flow 2 £75.1m, £48.9m in 2006 Profit before tax £61.3m, up 9.7% Basic earnings per share 20.4p, up 10.9% Full year dividend per share 11.0p * Footnotes can be found on the inside back cover. Britvic plc Annual Report 2007 1
Britvic brands are synonymous with quality, and parents know they can buy our drinks with confidence. With brands that appeal to all ages, our drinks keep the whole family hydrated and happy every day. 2 Britvic plc Annual Report 2007
It has been a particularly busy year for the Robinsons brand. We have introduced two new ambient fruit juices: Fruit Shoot 100% for children and Robinsons Smooth Juice for the whole family. These new juices, each available in three flavours, require no refrigeration or preservatives, thanks to our investment in new production facilities. In response to the growing trend towards more natural products, we have redesigned the Robinsons range of squashes with no artificial colours or flavours, plus distinctive new label designs. Britvic plc Annual Report 2007 3
Britvic offers a wide range of drinks for all occasions. Whether at home, in the pub, or out-and-about, we provide great tasting drinks in a broad range of flavours and formats to meet everyone’s needs. 4 Britvic plc Annual Report 2007
This year the Britvic range of mixers and juices, a part of many people’s night out, has been redesigned and relaunched in stylish new packaging, with some great new flavours. Our well-received not-from-concentrate fruit juices have also gone through a make-over and are now even more distinctive as ‘AJ’ and ‘OJ’. J2O, Britvic’s leading on-premise brand, has continued to prosper. Last year’s ‘limited edition’ Orange & Pomegranate proved so popular that it has now been confirmed as a permanent member of the range. Britvic plc Annual Report 2007 5
With iconic brands and innovative and stylish pack designs, our products provide refreshment and enjoyment for the young and the young at heart alike. 6 Britvic plc Annual Report 2007
This year has been a year of transition for a number of our brands. Tango went into rehab and returned with a new look and a new formulation, with reduced sugar and no artificial colours or flavours. And Drench, our recently developed water brand, was repositioned to ensure more mass market appeal, with an emphasis on the benefits of hydration. Our relationship with PepsiCo continues to thrive, with a continued emphasis on no-added sugar varieties of both Pepsi and 7UP . New pack designs for Pepsi have continued to refresh the brand image. Britvic plc Annual Report 2007 7
Chairman’s Statement Britvic’s profit before tax, in its second On 29 August 2007 we completed the year as a public company, rose 9.7% to acquisition of Britvic Ireland. The business £61.3m, on the back of revenue growth has leading positions in a number of soft of 5.7% to £716.3m. Earnings per share drinks categories, great owned brands, rose 10.9% to 20.4p per share, and the PepsiCo relationship and a strong cash flow was strong with free cash management team. There are substantial flow generation of £75.1m (excluding benefits from the bringing together of the impact of the acquisition of the our two companies which should quickly soft drinks and distribution businesses flow through to financial performance. of C&C Group plc (‘Britvic Ireland’)). The strength of our market positions, Gerald Corbett This was a strong set of results given particularly in the growing stills section Chairman that the summer of 2007 was one of of the market, our brands, our new the worst on record with the inevitable product development, our efficiency impact on the soft drinks market. programmes and the benefits of our The achievement of a robust financial Irish acquisition, give us confidence for performance against the background another good year. This confidence and of difficult conditions was the result of our cash flow underpin the Board’s successful actions by our management decision to propose a final dividend of team. In sales terms, we out-performed 7.7p, making the total for the year 11.0p, the British soft drinks market, building a 10% increase on the previous year. on the strength of our brands, and our On behalf of the Board I would like to innovation programme delivered in line thank our executive team and all Britvic with expectations. The continued employees for their hard work and improvements in our business processes commitment during the year. This strong resulted in an increase in average realised result is to their credit, and gives us all price. Costs, margins and cash were all confidence in a positive future. tightly controlled and we undertook the outsourcing of our secondary distribution network, stripping out significant cost from the business and allowing us to The achievement concentrate on core activities. As the impact of the poor summer weather of a robust financial became clear, management rapidly performance against reconfigured the business for lower levels of demand to produce a solid the background of second half performance. The performance of Pepsi and 7UP , which difficult conditions we bottle and market in Great Britain was the result (‘GB’), has been particularly pleasing. Our programmes have delivered a healthy of successful volume and revenue performance. PepsiCo is our major commercial partner actions by our and our relationship, which dates back over 20 years, has now been extended management team. to Ireland. We are committed to their success and they to ours. 8 Britvic plc Annual Report 2007
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