Britvic Prelim inary Results Wednesday, 29 th November 2017 - PDF document

Britvic Prelim inary Results Wednesday, 29 th November 2017 Transcript produced by Global Lingo London - 020 7870 7100 www.global- lingo.com

Wednesday, 29 t h November 2017 Brit vic Preliminary Result s Delivering on Our Strategic Priorities and Vision Sim on Litherland CEO, Britvic Good morning and welcome everybody. Today I am going t o t alk about how we have delivered our commit ment s in F17. Mat t will t hen come up and updat e on our financial performance and I will come back and close by reflect ing on our st rat egic delivery t o dat e and sharing some of t he highlight s t hat will be coming up in F18. 2017 Another Year of Strong Progress So, 2017 has been anot her st rong year for Brit vic, demonst rat ing once again t hat we can deliver in t he short t erm while cont inuing t o invest in long t erm growt h. Highlight s include st rong revenue in profit growt h, successfully innovat ing int o a rapidly changing cat egory, cont inued organic margin growt h t hrough combining price realisat ion wit h a cont inued focus on cost reduct ion, complet ing and int egrat ing t wo acquisit ions during t he year, one in Brazil and one in Ireland, progressing our invest ment in t he GB supply chain and our wider business capabilit y programme and cont inuing t o int ernat ionalise t he business wit h 41% revenue now generat ed out side of GB. Growing Revenue across Our Core Markets Despit e t he headwinds facing all FMCG businesses, we have delivered revenue growt h across our core market s in 17. In GB, growt h came from successful revenue management and t he carbonat es brands. We led promot ional price movement in t he market . Pepsi grew bot h revenue and market share t hanks t o Max and t he relaunch of R Whit e’s drove double digit growt h. Whilst GB st ills have improved, t here is st ill more work t o be done but I am confident t hat we have st rong plans t hat I will share wit h you lat er. In France, we also successfully execut ed a revenue management plan t his year despit e cont inued pressure from grocery buying groups. Our invest ment in t he brand port folio has cont inued t o pay off wit h brands now account ing for over 60% of revenue compared t o 50% at t he t ime of acquisit ion. I am part icularly pleased wit h t he growt h in our juice brand Pressade, which grew 32% t his year making it t he t hird largest cont ribut or t o soft drinks revenue growt h in France 2017. Finally, in Ireland, we also grew revenue despit e a highly compet it ive pricing environment , part icularly in carbonat es. Our port folio of leading low and no sugar brands has cont inued t o resonat e wit h Irish consumers seeking healt hier choices. In t he off t rade, our Count erpoint wholesaling businesses has delivered furt her growt h, bot h expanding dist ribut ion of our soft drinks range and also increasing our share of alcohol and snacks t hat accompany it . In addit ion, it has benefit ed from t he East Coast acquisit ion, which has significant ly improved our rout e t o market in Dublin. I nvestm ent in I nnovation I s Delivering Growth Innovat ion was ident ified in our st rat egy as a key long- t erm growt h driver for t he business. We have t herefore over t he last t hree years increased invest ment in our innovat ions capabilit y in areas such as insight , liquid development and packaging t echnology. The benefit s of t his are now coming t o fruit ion. We are successfully launching new product s t hat meet t he www.global- lingo.com 2

Wednesday, 29 t h November 2017 Brit vic Preliminary Result s growing consumer t rend of healt hier and more premium drinks. We oft en ut ilise t he st rengt h of our core brands t o innovat e from. For example, we launched Robinsons Squash’d t o make it easier for people t o drink squash when out of t heir homes and last year we launched Robinsons Refresh’d t o enable t he enjoyment of a nat ional low calorie ready t o drink Robinsons while on t he go. We also cont inue t o t arget our brands t owards new sources of growt h, such as t he growing energy market wit h our nat ural energy drink Purdeys. Finally, we t arget all of our innovat ion t o be long t erm margin accret ive and t he vast majorit y will be below t he sugar levy. Compared t o 2010 when own brand innovat ion account ed for 1.5% of t ot al revenue, we are now generat ing 5.4%. We hold ourselves t o a st rict definit ion of innovat ion as t he launch year +3, which means t hat t he cont ribut ion from innovat ion will fluct uat e over t ime as some product s drop out and new ones come in. However, we ant icipat e t hat over t he long t erm a similar level of cont ribut ion t o t hat which we have achieved t his year. I nnovation Delivering Growth across Kids, Fam ily & Adult Categories Some of our recent innovat ion successes are shown on t his chart . We have expanded t he presence of Fruit Shoot int o flavoured wat er wit h a st ill and sparkling Hydro range, which has increased revenue by 17% t his year. In Ireland, Mi Wadi Zero drove growt h in t he squash cat egory and increased it s revenue by 40%. IN France, our organic based Pressade increased revenue by 32% following t he launch of t he Bon Jour breakfast juice range. This year, we cont inued t o ut ilise t he st rengt h of t he Robinsons brand, expanding it by launching Refresh’d, a low calorie all- nat ural juice and spring wat er drink t hat has delivered 4 million in ret ail sales value in t he 19 weeks since launch. As I said early, R Whit es has grown revenue by 13% t hanks t o t he addit ion of a premium range feat uring new more sophist icat ed flavours and premium packaging t hat leverages it s herit age credent ials. Finally, Purdey’s, a nat ural energy drink made wit h nat ural juice and bot anicals wit hout caffeine, t aurine or added sugar has grown revenue by 29%. Brazil – Successfully Navigating Current Challenging Conditions So, aft er a successful first year in Brazil, we have experienced t he ant icipat ed adverse impact of t he macro environment and consumer spending. Our focus has been wo- fold. First ly, we have prot ect ed and indeed grown margins and profit abilit y in t he short t erm, which we believe will leave us in a much st ronger posit ion as a consumer environment becomes less challenged. We have t aken price t o offset double digit input cost inflat ion, yet cont inued t o t ake share t hrough st rong in- st ore execut ion. Secondly, we have cont inued t o invest in t he long- t erm opport unit y by expanding our brand port folio and geographic reach. We have recruit ed addit ional commercial resource and acquired Bela Ischia, t he leading concent rat es brand in Rio. The business has been successfully int egrat ed t his year and our guidance of R$10 million in cost synergies will be exceeded. In t erms of innovat ion, last year we launched Mega Fruit Shoot t owards t he end of t he year and we cont inue t o roll out and nurt ure t he brand and are st art ing t o ext end t he dist ribut ion int o t he five most populous regions on t he East Coast . We have also ext ended our port folio furt her int o ot her cat egories, such as t ea and coconut wat er. In t he USA, Fruit Shoot has made st eady progress t his year. www.global- lingo.com 3