AGM and Interim Management St

RNS Number : 3501M

Britvic plc

28 January 2009

 



Britvic plc ('Britvic') AGM and Interim Management Statement

28th January 2009

At the Annual General Meeting to be held at 11.00am this morning, Gerald Corbett, Chairman, will make the following comment on the Company's trading for the 12 weeks to 21st December 2008 ('the period'):

Overview

Britvic today reports total revenues of £218.6m for the 12 weeks to 21st December 2008, an increase of 2.1% on the prior year. GB and International revenues grew by 3.8% during the period, representing GB stills growth of 1.4%, GB carbonates growth of 5.2% and Britvic International growth of 18.2%. The contribution from Britvic Ireland of £49.9m for the 3 months to 31st December 2008 was down by 2.9% on the same period in the prior year, though underlying euro revenues were down by 17.0%.

Great Britain & International

In GB, we again outperformed the soft drinks market in key categories with continued volume and value share gains driven by our core brands.

The resilient GB stills revenue growth was driven by volume growth of 7.0% against a market decline of over 6% in the period. Our stills growth was driven by ongoing value and volume share gains from Robinsons and the continued success of Gatorade and Drench. The Average Realised Price (ARP) decline reflects the continued changing mix of sales caused by falling volumes in Licensed On-Premise single serve products and our growing presence in the plain water category.

GB carbonates revenue growth came from both volume and pricing, with volumes up by 2.8% against a market volume decline of 1.9% in the period. Both the Pepsi and 7Up brands continued to enjoy both strong revenue and share growth. 

Britvic's International business has delivered exceptional growth, with a volume increase of over 8% driven largely by Christmas activity in the Netherlands with Fruit Shoot. The ARP increase of 9.4% was driven by product mix plus the successful introduction of V Water within Travel.

The British Soft Drinks Market

The Licensed On-Premise soft drink market decline continued with volumes in the quarter to November 2008 down 5%, though the rate of decline has slowed. Although stronger Christmas trading provided a welcome short-term respite, we do not expect a more widespread and sustained recovery in the market in the near term. 

The Take-Home market shows a volume decline of 4.0% in the quarter to the end of December. However, the major categories within which Britvic has significant presence continue to perform better than market average, which combined with our brand strength, reinforces the relative resilience of the Britvic model.

Ireland

The soft drinks market in Ireland continues to suffer from extremely poor and unique macro-economic conditions that began in the spring of 2008, and have deteriorated in the last quarter of 2008. Although our Ireland business continues to hold or grow share in key categories, both owned-brand volumes (down 6.7%) and pricing dynamics (down 7.8%) reflect a consumer environment focused on value.

With the 12 weeks to the 28th December 2008 showing year-on-year declines of around 5% in the Take-Home market and 15% within Licensed On-Premise, we anticipate an especially challenging trading environment in Ireland for the foreseeable future. However management has taken significant steps to increase efficiencies, including actions on costs by reducing headcount, in addition to those already included within the previously-announced €21m synergies.

Business Reorganisation

As announced on 23rd January 2009, we have recently commenced consultation with our staff which could lead to a reduction of up to 145 jobs within Britvic Ireland. GB & International will see only minor team restructuring on an area-by-area basis requiring individual consultation. This restructuring across the group forms part of our continued focus on costs and also ensures that Britvic is optimally positioned both for current market conditions and for the eventual return to future growth across our territories.

The restructuring is anticipated to deliver savings in GB & International of £1.0-£1.5m in the current year, doubling in FY10. In Ireland, the expected saving this year is around €1.0-€1.5m, rising to around €7.0m in FY10. Whilst around €1m of the Irish savings are included within 2010's synergy case, we believe this year's savings serve to underpin the exceptionally challenging trading conditions in Ireland. Exceptional costs from the group restructuring are expected to be up to £10m in the current year.

Outlook

Through 2009 we anticipate the GB soft drinks market will remain relatively resilient and the Ireland market particularly challenging. We have continued to grow the top line through strong brand execution within key categories and both volume and value share growth across the channels. We are taking strong management action on costs and forecast a further 1% reduction in raw material inflation to 4.0-4.5% in 2009, completing the underpinning of the exceptionally challenging trading conditions in Ireland. 

We have seen very strong GB & International trading in the first four weeks of the second quarter. Combined with our robust first-quarter performance, decisive action in addressing costs, consistent execution of our resilient point-of-purchase, marketing & innovation strategies and more favourable commodity costs, this leads us to be confident about the delivery of the Board's expectations for the full year.

For further information please contact:

Investors:
John Gibney/ Craig Marks/Steve Nightingale	[phone]
Media:
Tom Buchanan (Brunswick)	[phone]
Emma Peacock/ Susan Turner	[phone]

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, 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 Pepsi, 7Up, Gatorade, Lipton Iced Tea and V Water, which Britvic produces, markets, sells and distributes under 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.

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 2008 and 2009 numbers reflect this transfer. 

Stills and carbonates are defined as per the recategorisation described at the Britvic March 2008 investor seminar.

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.

 

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