Britvic Annual Report 2008

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Britvic Annual Report 2008 Britvic plc Britvic plc Britvic House Broomfield Road 2008 Annual Report Britvic plc Chelmsford Essex CM1 1TU Annual Report 2008 Telephone 01245 261871 Fax 01245 267147 www.britvic.com Electronic communications Shareholders can elect to receive shareholder documents electronically by registering with Shareview at www.shareview.co.uk Who We Are This will save on printing and distribution costs, creating environmental benefits. When you register, you will be sent an email notification to say when shareholder documents are available on our website and you will be provided with a link to that information. Britvic is one of the two leading branded soft drinks When registering, you will need your shareholder reference number which can be found on your share certificate or proxy form. businesses in the UK and the Republic of Ireland. Many Please contact Equiniti if you require any assistance or further information. Contacts of our brands are either first or second in their respective The Company Secretary is John Price and the registered office is Britvic House, Broomfield Road, Chelmsford CM1 1TU, categories. We have a strong track record of innovation telephone 01245 504482, fax 01245 504435, website www.britvic.com The Company’s Registrar is Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, telephone 0871 384 2520* in products, packaging and marketing activity. In 2007 (UK callers) +44 121 415 7047 (non-UK callers). we expanded into Ireland with a significant acquisition * For those with hearing difficulties, a textphone is available on 0871 384 2255 for UK callers with compatible equipment. Further copies of this report are available from the Company’s registered office (address as above) and may be accessed through and we have a long-standing bottling agreement the Company’s website, www.britvic.com with PepsiCo for key brands such as Pepsi, 7UP and Gatorade in UK and Ireland. 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 Company to be Our Investment Proposition 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 The Company has a track record of growth. Since statements to reflect events occurring after the date such statements are published. Definitions flotation in 2005 it has delivered compound annual 1. EBITDA is defined as operating profit before exceptional items, depreciation, amortisation and any impairment of or gain/loss growth rates in revenue of 4.1%*, EBIT of 6.9%* and on disposal of fixed assets. 2. Adjusted net Group debt is defined as net Group debt, adding back the net benefit of debt hedging instruments that pass EPS of 16.1%. In addition over this timeframe it has through Reserves. delivered underlying free cash flow in excess of £180m. 3. Free cash flow is defined as net cash flow excluding movements in borrowings, dividend payments and non-cash exceptional items. The 2007 figure excludes both the impact of the acquisition of Britvic Ireland and a sale of property in the UK for £9.8m. * GB and International. The effect of the transfer of Irish trade from Britvic International to Britvic Ireland in March 2008 has been taken account of in the financial performance of both entities, and both 2007 and 2008 numbers reflect this transfer. All numbers in this announcement other than those included within the Financial Statements are disclosed before exceptional items. Stills and carbonates are defined as per the recategorisation described at the Britvic March 2008 investor seminar. The auditors have reported on the 2008 and 2007 accounts. Their reports for both years were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. Business Overview Business Review Financial Statements 01/ Our Performance at a Glance 12/ Chairman’s Statement 33/ Directors’ Report 02/ Britvic at a Glance 13/ Chief Executive’s Review 38/ Corporate Governance Statement 04/ The Market at a Glance 18/ Financial and Business Review 42/ Directors’ Remuneration Report 05/ Our Strategy for Growth 24/ Business Resources 50/ Independent Auditor’s Report 06/ Growing the Core in GB 25/ Risks and Uncertainties 51/ Consolidated Income Statement 08/ Sowing the Seeds in GB 52/ Consolidated Balance Sheet 10/ Britvic International Corporate Responsibility 53/ Consolidated Statement of Cash Flows 11/ Britvic Ireland 54/ Consolidated Statement of 26/ Corporate Responsibility Recognised Income and Expense 55/ Notes to the Consolidated Financial Management Statements 100/ Independent Auditor’s Report to the Printed on Take 2 Offset which is made 30/ Board of Directors Members of Britvic plc from 100% recycled fibres sourced only 101/ Company Balance Sheet from post consumer waste. Take 2 Offset 102/ Notes to the Company Financial is certified according to the rules for the Statements Forest Stewardship Council. 108/ Shareholder Information Designed by www.luminous.co.uk Business Overview Business Review Corporate Responsibility Management Financial Statements Our Performance at a Glance Group Total Branded Revenue Operating Profit 2006 £677.7m 2006 £73.7m 2007 £716.3m 2007 £80.0m 2008 £926.5m 2008 £96.7m +29.3% +20.9% Full Year Dividend Earnings Per Share 2006 10.0p 2006 18.4p 2007 11.0p 2007 20.4p 2008 12.6p 2008 24.8p +14.5% +21.6% Free Cash Flow 2006 £48.9m 2007 £65.3m 2008 £66.2m +1.4% GB and International Revenue EBIT 2006 £669.6m 2006 £71.8m 2007 £692.5m 2007 £76.2m 2008 £725.8m 2008 £82.0m +4.8% +7.6% Note: All numbers pre-exceptionals. Britvic plc Annual Report 2008 1 Britvic at a Glance Group Facts Highlights in 2007/8 – 1.68bn litres sold annually – Fruit Shoot exceeds £100m in retail sales – Second largest supplier of branded – Pepsi Raw launched, the UK’s first natural soft drinks in UK and Ireland cola and winner of 2008 Beverage – Number one supplier in on-premise Innovation awards in UK and Ireland – Lime Grove, a pressed lime and – Number two supplier in take-home sparkling water combination, introduced in UK and Ireland to on-premise – Gatorade, the world’s best selling sports Key Brand Facts drink, rolled out across all channels – Robinsons is the UK’s seventh most – Apple and Blueberry flavour of valuable grocery brand J2O introduced – J2O is the number one premium juice – Pomegranate Britvic mixer introduced, drinks brand a first in on-trade – Fruit Shoot is the number one kids’ – Successful pilot launch of H2OH! in Ireland consumer brand – Successful full launch of Fruit Shoot and J2O in Ireland Source: Canadean Soft Drinks Report 2008; Nielsen On Premise Service MAT to September 2008; Nielsen Scantrack 52 MAT to 1 November 2008. GB Portfolio Squash Pure juice Juice drinks Plain water Water plus Cold hot drinks* Cola Fruit carbonates Non fruit Lemonade Glucose Mixers Sports carbonates 2 Britvic plc Annual Report 2008 * From early 2009. Business Overview Business Review Corporate Responsibility Management Financial Statements Where We Are We have production facilities located across GB, with our headquarters in Chelmsford, where Britvic first originated. We also have bases overseas through Office Britvic Ireland. Factory Distribution centre Overseas Hartlepool operations Leeds Huddersfield Dublin Ballygowan Lutterworth Norwich Solihull Rugby Ireland Cork Chelmsford Widford Beckton We will close factories in Cork and Hartlepool in 2009 and relocate their production International to other existing sites. GB Take-Home Market Total market Carbonates Stills Total sales £6.1bn Total sales £2.6bn Total sales £3.5bn Britvic 11% Britvic 12% Britvic 10% Coca-Cola Enterprises 27% Coca-Cola Enterprises 53% Danone 10% GlaxoSmithKline 8% GlaxoSmithKline 9% Tropicana 9% Danone 6% Red Bull 7% Coca-Cola Enterprises 7% Tropicana 5% AG Barr 5% GlaxoSmithKline 7% All other 43% All other 14% Innocent 3% GB Licensed On-Trade Market All other 54% Total market Carbonates Stills Total sales £2.3bn Total sales £1.5bn Total sales £0.8bn Britvic 45% Britvic 40% Britvic 52% Coca-Cola Enterprises 35% Coca-Cola Enterprises 41% Coca-Cola Enterprises 23% Red Bull 4% Red Bull 7% Hartridge 2% All other 16% All other 12% All other 23% Source: AC Nielsen Scantrack Total Coverage MAT 27 September 2008 and AC Nielsen licensed on-trade MAT July 2008. Britvic plc Annual Report 2008 3 The Market at a Glance GB Market Volume 120 2005/6 The GB soft drinks take-home 2006/7 market declined by 0.8% 100 2007/8 versus the previous year, 80 though excluding plain water, Volume ’000s litres ’000s Volume the market was marginally up. 60 40 Oct NovDec JanFeb Mar AprMay JunJul AugSep Source: AC Nielsen Scantrack September 2008: Take Home. Relative Size and Growth of GB Market Categories Cola 2.0% 5.6% 3.7% Fruit carbs (11.6%) (1.7%) (4.9%) Lemonade (2.7%) (0.6%) (1.6%) Glucose/ Carbs stimulant 16.7% 16.3% 16.3% Non fruit carbs 15.3% (8.4%) (2.4%) Traditional mixers (0.9%) (3.6%) (2.5%) Pure juice 15.5% (1.7%) (1.3%) Plain water (5.9%) Squash (2.5%) (4.1%) (3.0%) Juice drinks 1.7%) 2.1% 2.0% Water plus (14.1%) (1.8%) (5.4%) Stills Dairy (4.4%) Sports 15.3% Diet/low calorie Smoothies (6.9%) Regular/full sugar Cold/hot drinks (6.0%) 0 400,000 800,000 1,200,000 1,600,000 Volume (‘000s litres) Source: AC Neilsen Scantrack Take Home 52 weeks to 27 September 2008.
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