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Britvic plc

Britvic plc Preliminary Results

25 November 2009

Britvic plc ("Britvic") today announces its Preliminary Results for the 52 weeks ended 27th September 2009 ("the period"). Numbers in this announcement are all quoted before exceptional items, except where stated otherwise.

  52 weeks ended
27th September
2009
£m
52 weeks ended
28th September
2008
£m
% change
       
Group revenue 978.8 926.5 5.6
GB & International revenue 789.3 725.8 8.7
Britvic Ireland revenue 189.5 200.7 (5.6)
       
Group operating profit 110.1 96.7 13.9
Group operating profit margin 11.2% 10.4% 80bps
       
GB & International operating profit 97.9 82.0 19.4
GB & International operating profit margin 12.4% 11.3% 110bps
       
Britvic Ireland operating profit 12.2 14.7 (17.0)
Britvic Ireland operating profit margin 6.4% 7.3% (90)bps
       
Group profit before tax 86.5 70.1 23.4
Group profit after tax 64.2 53.0 21.1
Group profit after tax, after exceptional items 46.8 31.8 47.2
       
Group EBITDA (1) 150.5 142.9 5.3
Adjusted net group debt (2) (366.4) (388.4) 5.7
       
Basic earnings per share (3) 29.9p 24.8p 20.6
Full year dividend per share 15.0p 12.6p 19.0
       
Free cashflow (4) 69.7 66.2 5.3
Return on invested capital (5) 17.9% 16.3% 160bps

Financial Highlights:

  • Group revenue growth of 5.6%;
  • Group operating profit margin improvement of 80 basis points;
  • EPS growth of 20.6% to 29.9p;
  • Free cashflow up 5.3% to £69.7m;
  • Final dividend per share up 23.9% to 10.9p;
  • Adjusted net debt to EBITDA of 2.4x, down from 2.7x in 2008 and 3.2x in 2007;
  • Agreement with investors in the US private-placement market for the issuance of a further $250m, subject to documentation and due diligence, in order to rebalance the group's debt structure;
  • Return on Invested Capital of 17.9%, up from 16.3% in 2008;
  • GB & International revenue growth of 8.7%;
  • GB & International operating profit margin improvement of 110 basis points;
  • Britvic Ireland delivers cumulative synergies of €15.3m in line with guidance.

Business Highlights:

  • In GB, we continued to outperform the soft drinks market in all key categories with volume and value share gains by each of our six core brands, namely Pepsi, 7Up, Tango, Robinsons, J2O and Fruit Shoot;
  • Strong through-the-line execution and brand-equity programmes, as well as a successful new product launch programme, which focused on brand extensions and driving pack mix within the existing portfolio;
  • A further addition to our brand portfolio in conjunction with PepsiCo, this time covering Lipton Ice Tea;
  • Right-sizing of Britvic Ireland's infrastructure leads to cumulative synergies of €27m by the end of 2011, as per guidance.

Margin Enhancement:

  • GB & International have delivered a 170 basis-point improvement in operating profit margin since 2006;
  • Guidance is now upgraded to an average annual group margin increase of 50 basis points each year to 2013.

The Board is proposing a final dividend per share of 10.9p bringing the full year dividend per share to 15.0p, an increase of 19.0% on the prior year. This reflects the two-times dividend-cover policy, the Board's continuing confidence in the future prospects of the business and the underlying cash-generative nature of its activities.

Paul Moody, Chief Executive commented:

"Britvic's very strong performance has delivered double-digit operating profit and earnings growth. The GB & International business has now achieved eight consecutive quarters of revenue growth since 2006, resulting in revenue CAGR of 6% and operating profit CAGR of 11%.

Over the last year our brands have grown market share across all key categories and our portfolio has been strengthened by successful innovation. We are successfully re-engineering our business in Ireland to take advantage of eventual market recovery, whilst realising expected synergies.

Recent conditions in the GB soft drink market have shown some signs of improvement, although visibility in both GB and Ireland beyond the short term remains limited and we take a cautious view of consumer spending. However, we are encouraged by our strong group performance in the early weeks of the new financial year, building on our track record of top-line, margin and quality earnings growth".

For further information please contact:
Investors:

Craig Marks/Steve Nightingale +44 (0)1245 504 330

Media:

Tom Buchanan/Giles Croot (Brunswick) +44 (0)20 7404 5959

There will be a live-webcast of the presentation given today at 11.00am by Paul Moody (Chief Executive) and John Gibney (Group Finance Director). The webcast will be available at www.britvic.com, with a transcript available in due course. There will also be a conference call today at 2.30pm (9.30am Eastern Standard Time) for investors and analysts with an opportunity to ask questions.

UK Access Number +44 (0)20 8609 0205
UK Toll Free 0800 358 2705
Pin Number 566466#

A recording of both calls will be available for seven days.

UK Toll Access Number +44 (0)20 8609 0289
UK Toll Free Access Number 0800 358 2189
US Toll Free Access Number +1 866 676 5865
Conference References 276551#

Notes to editors

Britvic is one of the two leading branded soft drinks businesses in the UK and the Republic of Ireland. The Company is the largest supplier of branded still soft drinks in Great Britain, and the number two supplier of branded carbonates.

Britvic's broad portfolio of leading brands includes established names with high brand recognition such as Robinsons, Tango, J2O and Fruit Shoot. Included within the portfolio are the PepsiCo brands which Britvic produces, markets, sells and distributes under its exclusive appointments from PepsiCo. This brand and product portfolio enables Britvic to target and satisfy a wide range of consumer demands in all major soft drinks categories, via all available routes to market.

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 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.

Reporting Periods

Britvic Ireland reports on a monthly basis in comparison to the rest of the Britvic group of companies which report on thirteen 4-week periods. There are no immediate plans to change this reporting structure.

Market Data

Take-home market data referred to in this announcement is supplied by AC Nielsen and runs to 26th September 2009.

Britvic Ireland

Please note: Irish volumes and ARP shown refer only to owned brands. Revenue also includes that derived from the sale of third-party brands within the wholesaling division.

Definitions

(1) EBITDA is defined as operating profit before exceptional items, depreciation, amortisation and any impairment of or gain / loss on disposal of fixed assets.

(2) Adjusted net debt is defined as net group debt, adding back the foreign exchange impact of derivatives hedging the balance sheet debt.

(3) Earnings Per Share is based on the number of issued shares excluding any own shares held by Britvic that are used to satisfy various employee share-based incentive programmes. For the financial year 2009, this number of available shares was 214.9m. For the financial year 2008, this number of shares was 214.0m.

(4) Free cashflow is defined as net cashflow excluding movements in borrowings, dividend payments and exceptional items.

(5) Return on invested capital (ROIC) - ROIC is a performance indicator used by Management and defined as operating profit after tax before exceptional items as a percentage of invested capital. Invested capital is defined as non-current assets plus current assets less current liabilities, excluding all balances relating to interest bearing liabilities and all other assets or liabilities associated with the financing and capital structure of the group and excluding any deferred tax balances and effective hedges relating to interest-bearing liabilities. Our previous definition of ROIC included within assets the impact of cross currency interest rate swaps. This has now been adjusted to align with our adjusted net debt definition, giving a more accurate reflection of the true position. This change does not significantly impact on the trends we have seen previously.

All numbers in this announcement other than where stated or included within the financial statements are disclosed before exceptional items.

The auditors have reported on the 2009 and 2008 accounts. Their reports for both years were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985 or section 498 (2) or (3) of the Companies Act 2006.

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