from Britvic Plc (isin : GB00B0N8QD54)
Britvic plc Final Results
Britvic plc (BVIC ) Britvic plc Preliminary Results – 20 November 2024 For the year ended 30 September 2024 ‘’Another outstanding performance” Group Financial Headlines:
Operational Highlights:
Simon Litherland, Chief Executive Officer commented: “We have delivered another excellent financial performance this year, with strong growth across our markets and portfolio of market-leading brands. We have also continued to ensure the business is fit for the future, adding more capacity, investing in our people and significantly increasing investment in marketing and innovation. I am extremely proud of what we have achieved, and I thank the entire Britvic team for their commitment and passion to deliver such a great result in a challenging environment. Subject to approval from the regulatory authorities, we anticipate that the acquisition by Carlsberg will complete in the first quarter of 2025. I am confident that the prospects for our brands and people are extremely positive, and I look forward to them going from strength to strength.” For further information please contact:
There will be a recorded webcast of the presentation published at 9.30am by Simon Litherland (Chief Executive Officer) and Rebecca Napier (Chief Financial Officer). The webcast will be available at www.britvic.com/investors with a transcript available in due course.
About Britvic Britvic is an international soft drinks business, rich in history and heritage. Founded in England in the 1930s, it has grown into a global organisation with 39 much-loved brands sold in over 100 countries. The company combines its own leading brand portfolio including Fruit Shoot, Robinsons, Tango, J2O, London Essence, Teisseire, Plenish, Jimmy’s Iced Coffee and MiWadi with PepsiCo brands such as Pepsi, 7UP and Lipton Ice Tea which Britvic produces and sells in Great Britain and Ireland under exclusive PepsiCo agreements. Britvic is the largest supplier of branded still soft drinks in Great Britain and the number two supplier of branded carbonated soft drinks in Great Britain. Britvic is an industry leader in the island of Ireland with brands such as MiWadi and Ballygowan, in France with brands such as Teisseire, Pressade and Moulin de Valdonne and in its growth market, Brazil, with Maguary, Bela Ischia, Extra Power and Dafruta. Britvic is growing its reach into other territories through franchising, export, and licensing. Britvic is a purpose-driven organisation with a clear vision and a clear set of values. Our purpose, vision and values sit at the heart of our company, driving us forward together to create a better tomorrow. We want to contribute positively to the people and world around us. This means ensuring that our sustainable business practices, which we call Healthier People, Healthier Planet, are embedded in every element of our business strategy. Britvic is listed on the London Stock Exchange under the code BVIC and is a constituent of the FTSE 250 index. Find out more at Britvic.com Cautionary note regarding forward-looking statements This announcement includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by the Listing Rules and applicable law, Britvic undertakes no obligation to update or change any forward-looking statements to reflect events occurring after the date such statements are published.
Market data Great Britain take-home market data referred to in this announcement is supplied by Nielsen and runs to 21 September 2024. ROI take-home market data referred to is supplied by Nielsen and runs to 8 September 2024. French market data is supplied by Nielsen and runs to 22 September 2024.
Chief Executive Officer’s Review Performance highlights Today, we present our results for the year ending 30 September 2024. It's a year of which we can be exceptionally proud, as Britvic has not only delivered its best-ever financial performance but also made significant strides in our strategic priorities. The Britvic team has once again demonstrated their unwavering commitment to our overarching ambitions, even in the face of challenging markets and a prospective change of ownership, with the proposed acquisition of Britvic by Carlsberg Group. I want to publicly acknowledge the Britvic team’s efforts, which have been instrumental in our outstanding performance. Overall, revenue is ahead of last year by +9.5% (+8.6% on a statutory basis), at £1,899.0 million. Encouragingly, this was achieved through growth in both volume and price/mix, reflecting strong consumer demand for our brands and appropriate revenue growth management actions. Volume increased +3.1%, driven by both organic growth and the Extra Power and Jimmy’s brand acquisitions. Average Realised Price grew +6.2%, benefiting from price realisation and positive pack and brand mix. We have reported our highest-ever adjusted EBIT, £250.9m, 15.2% ahead of last year (+14.9% on a statutory basis), with adjusted EBIT margin of 13.2%, 60 basis points (bps) ahead of last year (+70bps on a statutory basis). Profit after tax increased 1.8% (1.5% on a statutory basis) to £125.8 million. Our outstanding holistic performance, detailed in our annual report, is even more impressive given the challenging summer weather conditions across Great Britain and our European markets. At the same time, total A&P spending increased by 30.9% to £87.2m, as we continued to invest in the equity of our brand portfolio. Our disciplined approach to cash has enabled us to invest in the business for sustainable growth. We have continued to invest in our people and planet programmes, demonstrating our commitment to sustainability, while building capacity and investment in technology. We have also used the cash to acquire Extra Power in Brazil and to increase shareholder returns through our dividend policy and the share buyback programme, which was suspended following the announcement of the proposed acquisition of Britvic plc by the Carlsberg Group towards the end of the year, a process that is ongoing at the time of writing. Irrespective of the outcome of this process, I remain confident of Britvic's current and future prospects, driven by our compelling and proven growth algorithm. Our compelling approach to growth In our 2023 preliminary results and strategy presentation, we shared our growth algorithm, as a framework of where we believed our future revenue growth and category outperformance would come from. The growth accelerators we identified were:
This year, we have made excellent progress against these opportunities, with revenues growing across our portfolio of family favourite brands by +5.5%, Brazil by +35.3% and new growth brands by +52.1%. Our growth strategy has underpinned this success, providing us with a clear framework for sustainable performance. Each market has an important role: with Great Britain to lead market growth, Brazil to accelerate and expand our presence, in other international markets to globalise our premium brands, and to improve profitability in Western Europe. Market highlights Great Britain Our performance in Great Britain has been strong, with robust volume growth and favourable price/mix. The volume growth was driven by the retail channel, with a weaker hospitality channel. From a revenue perspective, both channels delivered revenue growth, as did our owned and PepsiCo brands. Encouragingly, we have delivered volume growth across all quarters, with quarter four volume +2.0%, despite the poor summer weather. Investment in our supply chain continued this year. In the spring, we commissioned another can line to enable us to unlock consumer demand through increased capacity and access margin benefits by bringing the production of certain co-packed products in-house. In August, we completed a £25 million upgrade investment in our national distribution centre in Lutterworth, Leicestershire. This state-of-the-art, lights-out facility now boasts 17 new automatic cranes, 18 despatch lanes, and 20 automated cars, enhancing our capacity to move 600 pallets an hour. In March, we activated the unmissable brand refresh of Pepsi, which was supported by a significant increase in investment behind a nationwide 360-degree marketing campaign, including billboards, digital takeovers, in-store activation, a new bold TV advertisement and engaging social media content. Pepsi MAX continued its successful association with Champions League football, adding new signings such as Jack Grealish and Leah Williamson as brand ambassadors. May also saw the launch of the limited-edition Pepsi Electric, a zesty, citrus cola with a striking blue liquid. Tango continued to excite consumers with great-tasting, sugar-free innovation. In August, Tango brought back, by popular demand, a new and improved sugar-free Cherry flavour and launched a bold new advertising campaign, "Warden," supported by social content across Instagram and out-of-home activation. Robinsons continued its association with The Hundred Cricket, rolling out an on-pack promotion across the squash range for the first time alongside the ready-to-drink format. Robinsons expanded its cordials range with two exciting new flavours, Elderflower and Ginger & Orange. We have also successfully delivered significant growth in our emerging categories this year. Plenish, our plant-based milk and shots brand, had an excellent year, with revenue +101.6% compared to last year. The plant-based milk range, unique in its combination of all-natural organic ingredients, is now the clear number three brand in the category. The Plenish Shots range benefited from new launches such as Mango Sunshine and Beet Balance, offering consumers an easy route to improving their nutritional balance through great-tasting products. New Shots listings have been achieved across retail, grocery, and hospitality channels; distribution has nearly doubled, and Plenish Shots grew value this year faster than any other shots brand. Building Plenish brand awareness has extended to TV for the first time, with a six-month partnership as the sponsor of Channel 4's breakfast programming. Jimmy's Iced Coffee was acquired last summer, giving us access to the fast-growing cold/hot drinks category. During the year, we added a larger 380ml BottleCan and a multipack format to complement the existing pack range. Leveraging our innovation capability, we also launched a new offering in conjunction with Myprotein and a new limited edition, Cinnamon Roll flavour. New listings were secured across the Grocery, Hospitality, and Wholesale channels, providing a solid foundation for the future and driving Jimmy’s brand value growth of +15.0% in the latest 26 weeks, versus category growth of 1.7%. London Essence has made excellent progress this year, with revenue in Great Britain growing +37.6% on last year and increased distribution points in retail and hospitality channels. Our unique offering of premium soft drinks on dispense has resulted in 2,000 Freshly Infused dispense fountains being installed. In the hospitality channel, we won over 50 new contracts, including Center Parcs, Barons Pub Company and The Belfry. Brazil At the start of the financial year, we completed the acquisition of Extra Power and three supporting brands to access the high margin and fast-growing energy category. The acquisition also gave us a more significant presence in the centre-west region. The integration was completed earlier this year, and we are already realising the anticipated cost synergies and commercial benefits. It has allowed us to accelerate the presence of our existing brands in the Goiás region and to roll out the acquired brands into our existing regions. Performance in Brazil was very strong, with both existing brands and acquired brands contributing to revenue growth of 35.3%. A combination of factors underpinned the growth. We have continued to focus on categories and regions which enable us to build scale and grow profitability. Growth was achieved across our Concentrates range as well as RTD formats such as Fruit Shoot and Grape juice. We have focused on compelling store execution, increasing investment in the merchandising team, feature and display, and in-store campaigns. We have also focused on winning in the stores close to our factories, optimising supply chain costs to serve, and realising margin benefits. Building awareness of our brand portfolio has continued this year, with increased A&P spend. This has included Carnival sponsorship in Rio de Janeiro, music events with Extra Power, and sports sponsorship, such as encouraging sports among state school children in the Minas Gerais region and sponsoring volleyball and football teams. Other International markets Performance in Ireland remained strong, with revenue up 7.8%, driven by price realisation and mix, offsetting a modest volume decline of 1.8% in the year. Pepsi and Ballygowan were the main drivers, with both the core water offering and Hint of Fruit delivering strong growth. February saw the launch of the Deposit Return Scheme (DRS) for PET bottles and cans in the Republic of Ireland. As anticipated, we saw a volume decline in the early months following the scheme's launch. In quarter four however, we saw a return to volume growth, up 5.9% on last year. At the end of 2023, we completed a supply chain programme to release additional production capacity in the Irish factories by introducing new work rosters while simultaneously implementing cost-efficiency savings within the manufacturing and warehouse operations. This has enabled us to reduce the cost and complexity created by introducing a DRS. In July, we introduced tethered caps, which align with EU legislation. We also expanded our production capacity for the fast-growing Ballygowan Hint of Fruit flavoured variant. In France, volumes declined compared to last year. While branded volumes improved in the second half of the year, total volume declined as we took a strategic decision to exit private label contracts, and we faced stiff competition in the juice category. While volume was down, revenue was slightly up on last year at 0.1%. Brand contribution materially improved due to the favourable product mix. In the second half of the year, we activated a significant marketing campaign for the Teisseire brand. As well as TV and social media campaigns, the brand sponsored the Women's Tour de France, supported by in-store activation and on-pack promotion of the sponsorship. A&P investment increased by nearly 80% on last year as we continued to invest in our brands. In other international markets, Mathieu Teisseire was in strong growth. This was offset by a softer performance in the USA as Fruit Shoot transitioned to a new bottling partner and some weakness for our brands in other export markets. Healthier People, Healthier Planet Our sustainability strategy, Healthier People, Healthier Planet, is a central and integrated part of our business strategy. While full details of our Healthier People, Healthier Planet performance this year can be found on pages 6-9 of the Annual Report, I am particularly proud of some key highlights. Healthier People We continue to build our portfolio of healthier consumer choices, with a range of great tasting, low calorie offerings, giving us an impressive average of only 21 calories per serve. Our people are our biggest asset, and we continue to invest in building capability by launching new online learning tools and investing in expanded graduate and apprenticeship schemes across the business to develop the next generation. Our active equity, diversity and inclusion programme continues and is ably stewarded by our employee-led network groups. We have supported the team's well-being with an innovative example this year: our partnership with the award-winning sleep-science experience, the Night Club. They are helping our shift workers across the supply chain to be happier and healthier at home and work. In Ireland, MiWadi is celebrating eleven years of supporting its Trick or Treat for Sick Children campaign, helping raise funds of over €3.9m for sick children, and supporting all Children's Health Foundation hospitals and urgent care centres.
Healthier Planet This year, we announced a power purchase agreement to deliver clean energy, meaning that 75% of the National Grid electricity used to make our brands in Great Britain comes from solar generation, thanks to a 160-acre solar farm in Northamptonshire. At our Beckton site, the heat recovery system we announced last year is now fully operational, and we anticipate a 50% reduction in the site's carbon emissions. To date we have reduced our Group carbon emissions by 35%, in-line with our science-based targets. In Ireland, Britvic has actively campaigned and supported the introduction of a DRS. Over 600 million drinks containers have been returned since the launch of the Deposit Return Scheme on February 1, 2024, with over €70,000 raised in deposit donations for the Return for Children charity initiative. At our Rugby site, we have invested in new systems for our water processing plant. We can treat the water used and reduce energy consumption by 60%. True water stewardship means we must look beyond our operations to the catchments we operate. Our Astolfo Dutra plant in Brazil has become the first Britvic manufacturing site to receive the Alliance for Water Stewardship standard certification. A track record of generating shareholder value Since I was appointed CEO in February 2013, following a turbulent period for Britvic plc, the Group has benefitted from a rejuvenated leadership team and a clear strategy. We set about restoring confidence in Britvic, with the ambition of making the business future-fit to win in a changing world. Since then, I have been consistently proud of what Team Britvic has achieved. Some key highlights include:
The relentless energy, focus and commitment demonstrated by the Britvic team over these past 12 years have generated superior returns for shareholders. Together, we have delivered Total Shareholder Returns of 341.8%, significantly outperforming the FTSE350 (105.7%). I am incredibly proud of what this business has delivered. I sincerely thank the team for their achievements, just as I thank the Board and our shareholders for their support over the years. I have every confidence that our brands and our Britvic people will go from strength to strength in the years ahead.
Chief Financial Officer’s Review Overview
The Company has delivered a strong financial performance this year across our key metrics. Volume increased 3.1% and positive price strong price/mix growth delivered Average Realised Price (ARP) growth of 6.2%. Consequently, Group revenue increased 9.5% (statutory +8.6%) year on year.
We delivered our highest ever adjusted EBIT on record, increasing by 15.2% (actual exchange rate +14.9%) to £250.9 million at an adjusted EBIT margin of 13.2% (2023: 12.5%). Adjusted Earnings Per Share (EPS) increased 13.9% year on year, reflecting the growth in adjusted EBIT and the reduction of the number of shares in issuance due to the share buyback programme, which was suspended following the announcement of the proposed acquisition of Britvic by Carlsberg Group. Basic EPS for the period was 50.8 pence, an increase of 5.2% on last year, while diluted EPS for the period was 50.2 pence, an increase of 4.8% on the same period last year. This was primarily due to the impact of non-cash adjusting items.
Statutory profit after tax increased 1.8% from £124.0 million to £125.8 million. Adjusting items totalled £48.0 million, of which £46.9 million are EBIT-related (year ended 30 September 2023: £36.9 million). Costs this year include an impairment on the Norwich site, which closed in 2019, and costs related to the acquisition of Britvic by Carlsberg.
Our cash performance remained robust, with a free cash flow of £85.5 million, driven by a continued focus on cash management and the impact of an additional payment run in 2024. Consequently, our adjusted net debt/EBITDA ratio remained broadly flat at 1.98x. During the year, we acquired Extra Power for cash consideration and returned cash to shareholders through the dividend and share buyback programme. Subject to the proposed takeover by the Carlsberg Group being successfully completed, shareholders would receive a special dividend payment of 25p per Britvic share, which is expected to be paid to shareholders within 14 days of the effective date. The Board has decided not to declare the normal final dividend as Carlsberg reserves the right to decrease the acquisition price for any dividend declared, made, paid or that becomes payable by Britvic on or prior to the effective date (other than the special dividend).
Below is a summary of the segmental performance and explanatory notes related to items including taxation, interest and free cash flow generation.
In Great Britain, revenue increased by 8.5%, with ARP growth of 6.5% and volume growth of 1.8%, an impressive performance against the backdrop of another summer of poor weather. The ARP growth was driven through a combination of improved mix, price realisation and optimising promotional activity. Consequently, brand contribution increased 12.8% and brand contribution margin increased 160bps to 42.0%.
Both our owned-brand and PepsiCo portfolios were in growth. Pepsi, led by MAX, and Tango were the major growth drivers, with revenue increasing 7.5% and 11.1% respectively. J2O, Fruit Shoot and Lipton also enjoyed strong growth. Robinsons was in modest growth, across both the squash and ready to drink ranges, reflecting the impact on the squash category from the poor summer weather. We continued to leverage the strength of the Britvic operating model to deliver the potential of new growth spaces. Plenish revenue increased 101.6% and packaged Aqua Libra increased 109.5%, benefiting from our innovation capability, distribution model and strong customer relationships. London Essence revenue increased an impressive 37.6%. This year also included the first full year benefit of Jimmy’s, which was acquired in July 2023, giving us immediate access to the Iced Coffee category.
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