interim results presentation 21 may 2007. gerald corbett chairman

Interim ResultsPresentation

21 May 2007

Gerald CorbettChairman

John GibneyFinance Director

Financial Headlines

H107£’m

H106£’m

% Change

Branded Revenue 353.6 323.5 9.3

EBITEBIT Margin

24.26.8%

18.65.7%

30.11.1% pts

Profit after Tax 10.9 6.5 67.7

Basic earnings per share 5.0p 3.0p 66.7

Free cash flow

Interim Dividend per share

(12.2)

3.3p

(42.3)

3.0p

71.2

10.0

Note: all numbers are before exceptional costs.

H107£’m

H106£’m

% Change

Branded Volume (million litres)Average Realised Price (ARP) per litreBranded RevenueBrand Contribution

696.250.8p353.6148.0

645.450.1p323.5133.2

7.91.49.3

11.1

Non brand A&PFixed Supply ChainSelling CostsOverhead and other costs

(4.4)(34.2)(46.5)(38.7)

(3.5)(36.1)(44.2)(30.8)

(25.7)5.3

(5.2)(25.6)

EBITEBIT Margin

24.26.8%

18.65.7%

30.11.1%pts


Summary H1 07 – EBIT

Stills

H107£’m

H106£’m

% Change

Volume (million litres) 229.9 213.8 7.5

ARP per litre 72.6p 71.9p 1.0

Revenue 166.8 153.7 8.5

Brand Contribution 76.9 69.9 10.0

Brand Contribution Margin 46.1% 45.5% 0.6%pts

Direct product costs decreased by 1.2%

Carbonates

H107£’m

H106£’m

% Change



Revenue 175.2 159.8 9.6


Brand Contribution Margin 38.8% 37.9% 0.9%pts

Direct product costs increased by 2.6%

International

H107£’m

H106£’m

% Change



Revenue 11.6 9.9 17.2


Brand Contribution Margin 26.7% 28.3% (1.6)%pts

Direct product costs increased by 4.5%

H107£’m

H106£’m

% Change

Non Brand A&P (4.4) (3.5) (25.7)

Total A&P spendA&P as % Net Revenue

(24.3)6.9%

(23.3)7.2%

(4.3)

Fixed Supply Chain (34.2) (36.1) 5.3

Selling Costs (46.5) (44.2) (5.2)

Overheads & Other (38.7) (30.8) (25.6)

Total (123.8) (114.6) (8.0)

Overheads and other costs

H107£’m

H106£’m

% Change

EBITInterest

24.2(9.0)

18.6(9.2)

30.12.2

Profit before taxTaxTax rate

15.2(4.3)

28.2%

9.4(2.9)

30.9%

61.7(48.3)

Profit after tax 10.9 6.5 67.7


EBIT to Earnings

H107£’m

Cash items Restructuring costs 1.8

Share items Transitional Share Awards 1.7

Non cash items Wind up of IHG share optionsReturnable Bottle write off

0.21.1

Total exceptional items 4.8

Total exceptional items after tax 4.0

Exceptional Items

71.914.5

(50.2)(362.5)

(14.1)(309.8)

Free Cash Flow post exceptionalsNet Debt

80.6(140.8)(27.3)Net Cash Flow pre exceptionals

72.184.7

(42.3)(98.5)

(12.2) (15.1)

Free Cash flowDividends

-47.866.7

(67.5)

(16.5)(27.4)(30.0)(11.7)

(16.5)(14.3)(10.0)(19.6)

Working CapitalCapital ExpenditurePension contributionOther

11.143.448.2EBITDA

30.1(3.2)

18.624.8

24.224.0

Operating Profit pre exceptionalsDepreciation

% ChangeHY06£’m

HY07£’m

Improving Cash Position and Reducing Working Capital

Note: EBITDA is operating profit before exceptional items, depreciation, amortisation and any gain or loss on disposal of fixed assets

Dividends

• Interim Dividend of 3.3 pence per share payable on 29 June 2007

• Total value of Interim Dividend of £7.1m

• Progressive dividend policy whilst maintaining an appropriate level of dividend cover

Previous guidance given at Preliminary Results in November

• Hot summer benefit in FY06 of £2.5m at an EBIT level

• PVO £2m further saving in 2007

• Brand contribution reflected in FY06 numbers expected to be sustainable

• On track to deliver £18m of planned BTP overhead cost savings by 2008:• 2007 incremental savings of £4m identified• 2008 incremental savings of £3m identified• No bonus paid in 06 – 07 bonus provision of £5m

• EBIT margin growth of 10-15 bps

• Exceptional items:• c.£2-4m of Transitional Share Awards costs each year through 07 and 08• c.£1.5m restructuring costs in 07

• Taxation:• FY tax rate at 29% in line with 06 • Cash tax rate c.29%

• Capex £40-45m

New guidance

• Further reduction in Capex guidance to £35-40m

• c.40% of the first 5% of any profit above budget will fund the employee

bonus payments

• FY07 tax rate guidance lowered to 28.2%

• Proposed outsourcing of secondary retail distribution network/ vending and

chiller remanufacturing operations:

• £5-6m additional annualised savings by FY09

• £2-3m reduction in capex by FY08

• One off exceptional cost in FY08 of £2-3m

• Net cash consideration of £9.0m for sale of Tamworth depot

CCSD guidance

• 3-yr historic CCSD revenue of CAGR of 2.5%

• Annual capex of c €8m – focusing on production and commercial assets

• A&P spend - traditionally around 7% as a proportion of soft drinks revenue (total CCSD)

• Britvic total Interest to increase by around £10.7m in FY08

• Effective tax rate last year – 11.2%, rising to 13.5% from 2010

• Similar seasonality – two-thirds of profit made in Britvic’s H2

• Anticipate pre tax synergies (focused mainly on supply chain) of around €14m - €11m are cost efficiencies (FY08 c€4.5m, ramping up to FY09 full €11m)

• One-off integration costs to achieve these synergies in the region of €20-25m:• c.€10m ‘catch up’ maintenance capex (majority in FY08) • c.€10-15m (approx 1/3 FY08; 2/3 FY09)

• Working capital benefits to come through by FY09 of €6-7m

Summary

• Strong volume and ARP performance• Consistent across all areas of the business

• Continued focus on costs• Overhead and PVO savings delivering as planned

• A&P spend maintained

• Improving margin

• Strong and improving cashflow• Underlying investment in the business

• Interim dividend of 3.3p up 10%

• FY Guidance unchanged or improved

Paul MoodyChief Executive

Agenda

• Market

• Strategy

• Driving profitable revenue growth

• Innovation

• Driving efficiency

• Expansion into Europe

• Current trading

40,000

50,000

60,000

70,000

80,000

90,000

100,000

WE 0

8.10

.06

WE 2

2.10

.06

WE 0

5.11

.06

WE 1

9.11

.06

WE 0

3.12

.06

WE 1

7.12

.06

WE 3

1.12

.06

WE 1

4.01

.07

WE 2

2.01

.07

WE 11

.02.

07

WE 2

5.02

.07

WE 11

.03.

07

WE 2

5.03

.07

WE 0

8.04

.07

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2004/052005/062006/07

Stills Market Volume

Stills market showing continued growth although at lower levels to last year – still expect majority of total market growth going forward to come from this category

Source: Nielsen Scantrack May 2007: Take Home

Easter peak

Carbonates Market Volume

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

WE 0

8.10

.06

WE 2

2.10

.06

WE 0

5.11

.06

WE 1

9.11

.06

WE 0

3.12

.06

WE 1

7.12

.06

WE 3

1.12

.06

WE 1

4.01

.07

WE 2

2.01

.07

WE 11

.02.

07

WE 2

5.02

.07

WE 11

.03.

07

WE 2

5.03

.07

WE 0

8.04

.07

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2004/052005/062006/07

Carbonates while showing signs of recovery is not back to levels of 2004/05


Easter peak

Soft Drinks Market Volume


80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

WE 0

8.10

.06

WE 2

9.10

.06

WE 1

9.11

.06

WE 1

0.12

.06

WE 3

1.12

.06

WE 2

1.01

.07

WE 11

.02.

07

WE 0

4.03

.07

WE 2

5.03

.07

WE 1

5.04

.07

WE 0

6.05

.07

WE 2

7.05

.07

WE 1

7.06

.07

WE 0

8.07

.07

WE 2

9.07

.07

WE 1

9.08

.07

WE 0

9.09

.07

WE 3

0.09

.07

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2004/052005/062006/07

Total market continues to perform well as we enter the typically more volatile H2 driven by weather and key events

Relative Size of Categories and Growth

0 500,000 1,000,000 1,500,000

Smoothies

Adult

Dairy

Mixers

Juice Drinks

Squash

Pure Juice

Water

Functional

Non Fruit Carbs

Lemonade

Fruit Carbs

Cola

Diet/ Low Cal

Regular/ Full Sugar

Sti

lls

Ca

rbs

+1.9%

-3.6%

+3.1%

+1.8%

+18.2%

+8.1%

+0.5%

-0.8%

-9.3%

+1.8%

+0.9%

+0.6%

-7.3%

+2.4%

+1.1%

+6.9%-3.1%+12.5%

+3.5%

+10.0%-14.2%

+1.7%+0.8% +2.4%

+2.7%

+3.8%

+78.5%

Volume (‘000s litres)

Source: Take home MAT to 14.04.2007 Nielsen Scantrack

Strategy focused on delivering shareholder value

Driving Profitable Revenue : Pepsi

• Further volume market share gains over the period • 23.5% share of the Cola market over the period, an increase of 1.8%pts on

the same period last year

• Supported by strong promotional levels for Pepsi Regular and Diet Pepsi

• Pepsi Max continues to gain share over the same period driven by

increases in loyalty levels and volume per buyer • Redesign across all formats

• Pepsi Max back on TV

• A focus around taste which is driving trial

• Growing presence in the increasingly important discounters sector

Source: Take home MAT to 14.04.2007 Nielsen Scantrack

Driving Profitable Revenue : Robinsons

• Further investment to reinforce Robinsons’ number one position• New production facilities unlocked the ability to drive large pack performance• Large pack value share 3.5pts ahead of last year in last 12 weeks, driving

overall brand value share by 1.2pts*• Re-launch of family squash range in July, with no artificial colours or flavours

and significant packaging re-design

• £12.5m total marketing support across Robinsons range over Summer• New ‘Raise them on Robinsons’ campaign• £1m sampling investment behind re-launched family squash range• Wimbledon on-pack promotion across squash range, marking 71st year on

the umpire’s chair

• Fruit Shoot – No artificial colours and flavours• Value share risen to 33% in last 12 weeks, 4.4% ahead of last year*• £2.8m marketing investment in print, radio and outdoor to drive

comprehension of no artificial colours and flavours message in 2007

*Source: Nielsen Scantrack, Total Coverage,12 weeks to March 07

Driving Profitable Revenue : J20

• J20 continues to grow

• 7% growth against prior year*• continuing to strengthen its category leadership

• Strong Christmas 2006 grocery performance

• driving success for Britvic and our customers

• PET pack launched in June 2006• broadening the brand’s footprint outside on premise heartland and into home

channels• Increased points of sale and performing well

• Orange & Pomegranate• 6th flavour in the range after a successful limited edition period

• Successful ‘If H20 were J20’ television campaign

*Source: Nielsen Scantrack & Brewers data to March 07

Driving Profitable Revenue : Water

• Fruit Shoot H20*

• 49% value share of kid’s water in the last 12 weeks • Repeat rates at 41% well ahead of new product benchmarks • 85% incremental to Fruit Shoot brand• £2.5m media investment in outdoor and TV

• Pennine Spring – a focus on licensed and food service sectors• Third largest and fastest growing brand in managed retail

• Drench – a focus on take home • Packaging re-design and repositioning to differentiate & widen appeal• New packs available from June 2007• Driving on availability in convenience & impulse• New ad campaign to coincide with launch ‘your brain is 75% water…keep it

topped up, stay drenched!’

*Source: Nielsen to March 2007

Driving Profitable Revenue: International

• Fruit Shoot in the Netherlands continues to perform strongly

• Volumes up 100%• Revenue growth of 120%

• New bespoke TV campaign called GO EXPLORE starts in May

• Robinsons High Juice in Denmark and Sweden• Great early success

• Distribution through all key retailers - expect to achieve 70% distribution in both markets by mid-summer.

• Through-the-line campaigns in both markets featuring national TV advertising, outdoor campaigns and heavy-weight in-store promotional activity

• Robinsons High Juice to be launched into Finland in May• To further build the scale of our business in the Nordic region

• Listings have been secured in all major grocery chains

• Expect 70% distribution by the summer

• A full campaign, including TV advertising, is accompanying the launch

Driving Profitable Revenue: Innovation

Aseptic line installed

Planned innovation on track and on time

Driving profitable revenue: Robinsons Smooth Juice and Fruit Shoot 100% Juice

• Robinsons Smooth Juice

• Expect over 90% distribution in all major multiples by end of May

• Fruit Shoot 100% Juice

• Expect over 90% distribution in all major multiples by July

• Both products capturing the imagination of customers with major plans in place for launch activity

• point-of-sale material

• branded off-shelf display

• Magazine features

• Store incentives

• Links with home delivery

Driving efficiency

• Business Transformation Programme on track:

• £4m of anticipated savings in FY07


• Proposed outsourcing of secondary retail distribution network/ vending and chiller remanufacturing operations:

• £5-6m additional annualised savings by FY09

• £2-3m reduction in capex by FY08

• Sale of Tamworth depot – net cash consideration of £9.0m

• Continuing to drive our PVO programme


Expansion into Europe – agreement to acquire the soft drinks & related businesses of C&C plc (“CCSD”)

• A great opportunity to accelerate earnings growth

• Provides us with a leading position in both the Republic of Ireland and Northern Ireland.

• Exciting potential for:

• anticipated supply chain synergies of €14m

• brand & product expansion

• innovation.

• An experienced and highly capable CCSD senior management team

• Opportunities to further develop both CCSD’s own brands and the Pepsi and 7Up brands in these markets.

Summary

Well positioned in this growth market

• The market

• Signs of a return to normality after exceptional down turn H106

• H2 traditionally more volatile with tougher comparatives

• This year we have grown market share in stills and carbonates

• Strong innovation pipeline performing to expectation

• Continued focus on efficiency

• Increasing operating margins

• Optimising working capital

• Further cost savings

• European expansion

• C&C soft drinks opportunity

• Business has started well in H2

interim results presentation 21 may 2007. gerald corbett chairman

Documents

ebit slide

exceptional costs

earnings slide

change ebit

cash items

cash tax rate

tax tax tax rate

ebit ebit margin