Britvic plc Annual Report 2006
Britvic plc at a glance Company Facts 2005/6 Company Highlights • 2,700 employees • Investment in production facilities continued, • 7 factories including the opening of a new Fruit Shoot line with • 16 depots a 45m litre annual capacity • 2 main offices • Successful implementation of restructuring programme • 1 National Distribution Centre • GDA labelling adopted (to be rolled out during 2006/7) • Sugar reduction programme delivered • CR strategy adopted for 2006/7 and beyond Market Facts Britvic Strategy • 1.4bn litres sold annually • Aggressively grow stills • Number 1 supplier in licensed on-trade 1 • Grow our share of carbonates • Number 2 supplier in take-home 1 • Be the supplier of choice • 2nd largest supplier of branded soft drinks in GB 2 • Drive real benefits from the Pepsi relationship • Be the most efficient FMCG company • Make Britvic a great place to work Market Position 1 Total Take-Home Total Licensed On-Trade Total sales £5.8bn Total sales £2.3bn BRITVIC 11% BRITVIC 44% ALL OTHER 41% CCE 34% CCE 26% ALL OTHER 18% GLAXOSMITHKLINE 8% RED BULL 4% DANONE 6% TROPICANA UK 4% RED BULL 2% BARRS 2% Licensed On-Trade Take-Home Stills Take-Home Carbonates Licensed On-Trade Stills Carbonates Total sales £3.4bn Total sales £2.4bn Total sales £0.7bn Total sales £1.6bn BRITVIC 10% BRITVIC 12% BRITVIC 52% BRITVIC 40% ALL OTHER 59% CCE 54% ALL OTHER 24% CCE 41% DANONE 11% GLAXOSMITHKLINE 12% CCE 21% ALL OTHER 13% CCE 7% ALL OTHER 12% HARTRIDGE 3% RED BULL 7% TROPICANA UK 7% RED BULL 6% GLAXOSMITHKLINE 5% BARRS 4% INNOCENT 2%
Stills Carbonates Britvic is the number 1 supplier of branded stills in Britvic’s franchise arrangement with PepsiCo allows us GB 3 . Our wide portfolio covers diverse markets from to produce and market the Pepsi and 7UP brands in squash to sports drinks and premium juices. GB while we also promote our wholly owned brands We continue to develop this key sector with including Tango and R Whites. Our activity in this area concentration on juices and waters. is focused on no added sugar variants in response to consumer health and well-being trends. Key Facts Key Facts • Robinsons is the UK’s 7th most valuable grocery brand 4 • Pepsi is the 2nd most popular branded soft drink • Robinsons is the number 1 soft drink (as drunk) 5 in grocery multiples 9 • Britvic is the number 1 mixer and juice brand in on-premise 6 • Pepsi Max is the most popular of the Pepsi range 10 • J2O is the number 1 adult soft drinks brand in take-home • R Whites is the largest lemonade in on-premise 1 1 and was bought by 3m households in the last year 7 • Tango was bought by 19 per cent of households in the • Fruit Shoot is the number 1 kids’ drink brand 8 last year 12 Developments in 2005/6 Developments in 2005/6 • Robinsons introduced to Denmark & Sweden and • Pepsi Max’s ‘What’s in your locker’ campaign drove Fruit Shoot extended into Holland sales during this summer’s football World Cup • Fruit Shoot range reformulated with natural colours • Pepsi Max met competitor launch with successful ‘Max and flavours your Life’ advertising • Sugar content reduced in regular Fruit Shoot by 15 per cent • Sugar content reduced in regular Tango and R Whites • Robinsons Wimbledon campaign most successful ever • Tango Clear viral advert won a Cannes Lions • Robinsons introduced with new pack formats and J20 2006 Award launched in PET for the first time • Fruit Shoot ‘Get Good’ campaign partnered with The Scout Association • Drench Art Awards promoted budding urban artists Launches in 2005/6 Launches in 2005/06 • Fruit Shoot H2O in: Blackcurrant; Apple; and Orange • Tango Clear in: Raspberry & White Cranberry; and Orange • Drench • Pepsi Max Cino • Britvic Pressed Apple; and Squeezed Orange juices • Orange and Pomegranate J2O (limited edition launched in October 2006) • Gatorade in: Orange; and Lemon • New varieties of Robinsons in: Apple, Strawberry & Lychee High Juice; Apple & Pear Fruit and Barley; and Tropical Fruit and Barley • Robinsons Fruit and Barley range enriched with added vitamins Footnotes can be found on the inside back cover Britvic Brands Britvic Brands
Financial Highlights* Total branded revenue £677 .7m, down 2.6 per cent EBITDA i £121.0m, up 0.6 per cent Operating profit £73.7m, up 0.5 per cent Operating profit margin 10.9 per cent, up 0.4 percentage points Free cash flow ii £48.9m, £(10.3)m in 2005 Profit after tax iii £39.6m, down 0.3 per cent Basic earnings per share 18.4p, down 0.5 per cent Full year dividend per share 10.0p Contents 02 Creating and Building Brands 38 Independent Auditor’s Report to 08 Chairman’s Statement the Members of Britvic plc 09 Operating and Financial Review 39 Consolidated Income Statement 09 Chief Executive’s Review 40 Consolidated Balance Sheet 12 Current Trading and Outlook 41 Consolidated Statement of Cash Flows 12 Financial and Business Review 42 Consolidated Statement of Recognised 18 Business Resources Income and Expense 19 Risks and Uncertainties 43 Notes to the Consolidated 20 Corporate Responsibility Financial Statements 22 Board of Directors 82 Independent Auditor’s Report to Reports and Accounts the Members of Britvic plc 24 Reports and Accounts Contents 83 Company Balance Sheet 25 Directors’ Report 84 Notes to the Company 28 Corporate Governance Financial Statements 31 Directors’ Remuneration Report 88 Shareholder Information *Footnotes can be found on the inside back cover
Dedicated to creating and building brands that delight consumers… always! And with over 150 years of experience behind us, we know what we are talking about. In that time we’ve launched brands that have become household names and we’ve acquired and developed brands that are now some of the biggest and most trusted in Britain. Our portfolio is the widest of any British soft drinks company, with some of the best known brands. Constant investment, fresh thinking, research, development and consumer insight converge to produce great results. We have adapted to and often led the latest trends, launching the next great innovations that capture and in some cases establish whole new categories. From the factory floor to the boardroom, Britvic people work to the highest standards and with dedication to consumer satisfaction… always. Britvic plc Annual Report 2006 1
Creating and building brands A strong track record… Opportunities lead to ideas generation and ultimately brand and product propositions, Britvic is number 1 in stills – the biggest taking into account the impact for the and faster growing segment of the GB market and for Britvic’s existing brand market – and number 2 in carbonates – portfolio. Propositions are tested against a significant 5.4bn litre market in 2005. extensive models, which enhance decision The Company has a strong track record of making, always maximising potential and innovation; in creating and building brands. minimising risk. In 2005, 28 per cent of net revenues were Technical expertise, supply chain proficiency generated by new brands and brand and marketing specialists converge to bring extensions launched in the previous 8 years. forward new brands and brand extensions. Britvic brands are built on a commitment to By successfully combining these quality, investment in research and elements Britvic creates great products development, innovative thinking, creative enjoyed by millions; across a wide range marketing, and above all, consumer insight. of consumption occasions, in all the Brands that delight consumers… major soft drinks categories and across all relevant routes to market. Whether creating a brand from scratch or building on an existing brand, consumer But to grow shareholder value, the insight drives Britvic’s innovation programme. focus is on creating resilient and sustainable brands. Brand building Using bespoke techniques, a dedicated is a long-term commitment. consumer insight team is focused on understanding consumer drivers, forecasting future trends and modelling consumption patterns, all to identify opportunities. The Really Wild Drinks Company Our new juice and juice & water range complies with the new food and drink rules for schools. We adapted quickly, developing and launching in just 6 months. 2 Britvic plc Annual Report 2006
A day trip to London. Shopping in Oxford Street for Julie and a museum visit for Tom. All in all its thirsty work, and with all that sightseeing to do, for refreshment on the go, they choose Pennine Spring. Britvic Pressed and Squeezed Juices The new range of Britvic Pressed Apple and Squeezed Orange juices are ‘not from concentrate’ and have a 6 month ambient shelf life. 3 Britvic plc Annual Report 2006 3
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