REG-Britvic plc Britvic plc Interim Results
16/05/2023 07:15
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Britvic plc (BVIC )
Britvic plc Interim Results
16-May-2023 / 07:00 GMT/BST
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Britvic plc Interim Results – 16 May 2023
For the six months ended 31 March 2023
‘An excellent start to the year’
Group Financial Headlines:
• Revenue increased 7.9%1 to £794.0m (AER +10.4%)
• Adjusted EBIT increased 16.7%1 to £85.3m (AER +16.1%), operating profit increased 21.5%1
• Adjusted EBIT margin increased 80bps1 to 10.7% (AER +50bps)
• Profit after tax increased 21.2%1 to £54.4m
• Adjusted earnings per share of 22.8p, up 17.5%
• Interim dividend of 8.2p, up 5.1%
• Adjusted net debt/EBITDA of 2.2x, in line with the same time last year
Highlights:
• Consumer demand for our brands remains strong - Q2 volumes in growth
• Successfully managing the challenging inflationary environment
• Continued investment in growth capacity, with new lines operational in GB and Brazil
• Standout performance from Tango and Pepsi MAX
• Robinsons relaunch to accelerate flavour concentrates
• Further share buyback programme announced, of up to £75m over the next 12 months
6 months ended 6 months ended Underlying
31 March 31 March % change % change
2023 2022 actual exchange constant
£m £m rate (AER) exchange rate1
Revenue 794.0 719.3 10.4% 7.9%
Adjusted EBIT 85.3 73.5 16.1% 16.7%
Adjusted EBIT margin 10.7% 10.2% 50bps 80bps
Operating profit 80.7 67.1 20.3% 21.5%
Operating profit margin 10.2% 9.3% 90bps 120bps
Profit after tax 54.4 45.9 18.5% 21.2%
Basic EPS 21.0p 17.2p 22.3%
Adjusted EPS 22.8p 19.4p 17.5%
Interim dividend per share 8.2p 7.8p 5.1%
Adjusted net debt/EBITDA 2.2x 2.2x -
See glossary on page 15 for definitions of performance measures and appendix 1 for
reconciliations of non-GAAP measures
1. Adjusted for constant currency exchange rates
Simon Litherland, Chief Executive Officer commented:
“We have delivered an excellent start to the year, making great progress on our People,
Planet and Performance measures. Our continued focus on lower calorie, healthier drinks has
resulted in some standout performances, including Pepsi MAX and Tango in Great Britain as
well as Ballygowan ‘Hint of Fruit’ in Ireland. We have successfully mitigated the impact of
the challenging inflationary environment, while continuing to offer consumers great quality
and value at affordable prices. Looking ahead, we will be activating a series of exciting
marketing and innovation campaigns this summer. We have a fantastic portfolio, a
well-invested business, and a very talented team, so I am confident that we will continue to
make further strong progress this year and beyond, creating value for all our stakeholders.”
For further information please contact:
Investors:
Steve Nightingale (Director of Investor Relations) +44 (0) 7808 097 784
Media:
Stephanie Macduff-Duncan (Head of Corporate Communications) +44 (0) 7808 097 680
Stephen Malthouse (Headland) +44 (0) 7734 956 201
There will be a webcast of the presentation given today at 09:00am by Simon Litherland
(Chief Executive Officer) and Chris Hancock (Chief Strategy Officer). The webcast will be
available at www.britvic.com/investors with a transcript available in due course. To ask a
question on the webcast, please dial +0808 109 0700 or +44 (0) 33 0551 0200 and quote
Britvic Interim Results when prompted by the operator.
Note to editors
About Britvic
Britvic is an international soft drinks business rich in history and heritage. Founded in
England in the 1930s, it has grown into a global organisation with 37 much-loved brands sold
in over 100 countries.
The company combines its own leading brand portfolio including Fruit Shoot, Robinsons,
Tango, J2O, London Essence, Teisseire and MiWadi with PepsiCo brands such as Pepsi, 7UP and
Lipton Ice Tea, which Britvic produces and sells in Great Britain and Ireland under
exclusive PepsiCo agreements.
Britvic is the largest supplier of branded still soft drinks in Great Britain and the number
two supplier of branded carbonated soft drinks in Great Britain. Britvic is an industry
leader in the island of Ireland with brands such as MiWadi and Ballygowan, in France with
brands such as Teisseire, Pressade and Moulin de Valdonne and in its growth market, Brazil,
with Maguary, Bela Ischia and Dafruta. Britvic is growing its reach into other territories
through franchising, export and licensing.
Britvic is a purpose driven organisation with a clear vision and a clear set of values. Our
purpose, vision and values sit at the heart of our company, driving us forward together to
create a better tomorrow. We want to contribute positively to the people and world around
us. This means ensuring that our sustainable business practices, which we call Healthier
People, Healthier Planet, are embedded in every element of our business strategy.
Our purpose: Enjoying life’s everyday moments
Our vision: To be the most dynamic soft drinks company, creating a better tomorrow
Our values: We care, We’re courageous, Own it, Stronger together, Act with Pace
Britvic is listed on the London Stock Exchange under the code BVIC and is a constituent of
the FTSE 250 index.
Find out more at 1 Britvic.com
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 including the
COVID-19 pandemic, which may cause the actual results, performance, or achievements of the
Group 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. This announcement contains inside information related to a share buyback
programme. The person responsible for making this announcement is Clare Thomas, Company
Secretary.
Alternative performance measures
The annual financial statements of the Group are prepared in accordance with UK-adopted
International Financial Reporting Standards (IFRS). The condensed set of financial
statements included in this interim results announcement has been prepared in accordance
with UK-adopted IAS 34 ‘Interim Financial Reporting’. We use certain non-IFRS alternative
performance measures to provide additional information about the Group’s performance.
Non-IFRS measures may be considered in addition to, but not as a substitute for or superior
to, information presented in accordance with IFRS and are also used internally to measure
and manage the business. Non-IFRS measures are defined in the glossary on page 15 and
reconciled to the nearest IFRS measure in Appendix 1.
Market data
GB take-home market data referred to in this announcement is supplied by Nielsen and runs to
25 March 2023. ROI take-home market data referred to is supplied by Nielsen and runs to 26
March 2023. French market data is supplied by Nielsen and runs to 26 March 2023.
Next scheduled announcement
Britvic will publish its Q3 trading statement on 27 July 2023.
Chief Executive Officer’s Review
Today we report our results for the six months to 31 March 2023. I am delighted with our
progress in the first half, both in terms of key performance measures and our strategic
priorities. Once again, the Britvic team demonstrated their passion and commitment, and I
want to thank them for this and the crucial part they play in driving our progress. The
elevated inflationary environment and global supply chain challenges are well-documented in
the media and we have not been immune to these pressures. Our procurement and commercial
teams have done an outstanding job of ensuring continuity of supply and effective revenue
management, while continuing to offer consumers fantastic, affordable brands.
Revenue and adjusted EBIT are ahead of last year, at +7.9% and +16.7% respectively, on a
constant currency basis. Consumer demand has remained solid, with only a modest volume
decline in the first half. Through a combination of revenue growth management actions and
cost discipline we have been able to mitigate the cost inflation pressures. More recently,
we have seen a sequential improvement, with Q2 volume slightly ahead of last year, up 0.6%.
Adjusted EBIT margin was 80bps ahead of last year, aided by the planned phasing of A&P
expenditure into the second half. Britvic is a highly cash-generative business with a
robust, well-financed balance sheet. With confidence in our strategy and growth momentum, we
are confirming a further share buyback programme of up to £75m over the next 12 months,
following the completion in February 2023 of the initial £75m buyback announced last year.
Healthier People, Healthier Planet is a key pillar of our strategy. Across our portfolio, we
continue to expand our offering of healthier choices with lower sugar reformulations and the
introduction of an ‘added benefits’ Robinsons range. Our focus on the planet will see
Ballygowan in Ireland produced using 100% locally-sourced renewable electricity. In GB, we
are investing £8 million in an industry leading heat recovery system at our Beckton site,
which will save 1,200 tonnes of carbon annually and decarbonise 50% of the site’s heat
demand. Our Aqua Libra business launched London's first WasteShark in Canary Wharf to clear
plastic waste from the area's bodies of water.
A growth strategy
With a portfolio of market-leading brands, multi-channel routes to market, collaborative
customer relationships and a well-invested supply chain, we set out our strategic framework
as follows:
Our future focus remains on four key strategic priorities:
• Build local favourites and global premium brands
• Flavour billions of water occasions
• Healthier People, Healthier Planet
• Access new growth spaces
Each of our markets has a defined role to play:
• GB – to lead market growth
• Brazil – to accelerate growth and expand our presence
• Other International – to globalise premium brands and improve profitability in Western
Europe
Underpinning this strategy are three critical enablers:
• Generate fuel for growth through efficiency
• Transform organisational capability and culture
• Selective M&A to accelerate growth
Market review
Great Britain
In GB, we have delivered a strong performance, growing revenue across both our own brands
and the PepsiCo portfolio. The retail and hospitality channels increased revenue by 9.7% and
12.5%, respectively.
We went early with price movements in Q1 this year, to offset double digit cost inflation
and to avoid the lag we experienced last year, when cost of goods increases impacted us from
the start of the financial year but we were only able to respond through pricing in Q2. We
have seen a sequential improvement in volumes as we moved into Q2, returning to volume
growth and building momentum as we head towards the key summer trading period. Importantly
we have carefully managed promotional activity, pack architecture and mix, ensuring that our
brands continue to provide consumers with great quality and value at affordable price
points.
Pepsi MAX has continued to lead the cola category growth. Our taste challenge results show
that 70% of consumers prefer the taste of Pepsi MAX, and our range of appealing flavours
continue to drive incremental brand and category growth. In Champions League football and
music festival sponsorship, MAX has proven marketing platforms with strong consumer appeal,
providing fantastic in-outlet activation opportunities.
Tango has continued its success this year, with 39.7% revenue growth. Brand retail sales
value, at £84m, has grown by £53m since 2019. Much of the growth has been driven by our
range of great-tasting, sugar-free variants, such as Berry Peachy, Dark Berry and, more
recently, Paradise Punch. The focus on flavour innovation means that new flavours account
for 50% of brand value, compared to 20% in 2019. Our new Dark Berry advertising campaign is
now live, and our Berry Peachy emoji parody #PeachPolice campaign won Best Social Strategy
at the prestigious 2023 Campaign Media Awards. Led by our in-house studio INFUSED in
collaboration with our agency mSIX and content partners LADbible Group, this was one of the
first campaigns to take insights from our marketing excellence programme and create a
digital-first ecosystem that genuinely engaged with our targeted Gen Z audience.
We have commissioned another can line at our Rugby factory to meet demand for our carbonates
brands. Not only will this support increasing consumer demand for our multi-pack cans, but
it has also enabled us to bring Rockstar production in-house. Since taking on the brand in
2021 under a co-pack model, we have suffered several issues that have impacted our ability
to supply customers and effectively activate marketing campaigns. The energy category is a
significant opportunity for us, and with PepsiCo, we will continue building brand equity.
This year we are increasing investment, resourcing a new regional field sales team to
deliver outstanding execution in outlet. We will soon be announcing an exciting new music
partnership.
The new line also allows us to launch Lipton Ice Tea in a can format. Widely available in
Europe, this will be a brand-new pack format for Lipton in GB, enabling us to continue to
grow the brand. Our plant-based brand, Plenish, continued to build scale. Being part of
Britvic has enabled the brand to expand distribution and gain listings, leveraging our
strong customer relationships. The retail sales value for the shots range increased by 62%,
and plant-based milk was up by 26%. London Essence has expanded distribution in retail, and
the Freshly Infused fount can now be found in 1,200 outlets. AquaLibra Co also continues its
growth and, ahead of Global Recycling Day on 18 March, launched London's first WasteShark in
Middle Dock at Canary Wharf in partnership with the Canary Wharf Group. The WasteShark is a
marine robot designed to be harmonious with the environment, which will clear plastic waste
from the area's bodies of water while collecting data to improve the surroundings.
In the second half of the year, we have some exciting plans. We recently started the
relaunch of Robinsons to accelerate our flavour concentrates business and lead the squash
category in GB. Established in 1823, Robinsons has a retail value of £200m. Bought by nearly
half of all UK households, with over nine million glasses consumed daily, the brand has
firmly secured its position in homes nationwide. Our latest activity, building on the
success of the recent good/better/best portfolio segmentation, is designed to disrupt the
category norms by making the squash aisle more exciting and easier to navigate. As well as a
new brand visual identity to improve shelf standout, we are bringing to market a new range
of innovations, pack formats and an exciting new marketing campaign.
Also in the second half, our new small PET line will go live in Beckton, facilitating the
acceleration of our targeted growth in Immediate Consumption. Beckton will also be the home
for our innovative new heat recovery system. The £8m investment is part funded by a £4.4m
government grant from the Department for Energy Security and Net Zero. This is one of the
largest grants ever awarded, reflecting the innovative nature of the technology. The system
will enable us to switch our heating from natural gas boilers to carbon free heat
extractors.
Brazil
While Brazil is an identified growth market within our strategy and has delivered double
digit revenue growth over several years, the extreme inflation experienced last year
required a correction in margin. Brazil is particularly reliant on juice pricing, especially
our fruit processing business, which has been hit hardest by the extreme volatility in
agricultural commodities driven by poor crop yields. Achieving the margin shift required
several levers to be pulled at the same time, including increasing headline price at
multiple points during last year, and flexing our recipe agility to manage cost of goods. We
have also been proactively managing our mix, such as by building our higher margin
categories such as flavour concentrates, premium grape juice and Fruit Shoot. At the same
time, we have maintained our commercial and operational discipline, sharpening our focus on
superior in-store execution, and increasing production capacity on growth brands such as
Fruit Shoot.
We have invested in sponsoring Carnival, a vast series of events that brings people out onto
the streets to celebrate. In addition, we have activated our brands around sport, sponsoring
events such as Circuito das Estações (The Circuit of the Stations), which is synonymous with
street racing across the major cities of Brazil. There are four stages, each representing a
new season of the year and a time to seek a new goal. Other sports sponsorships have
included the Maguary football team and the South American volleyball championships.
Other International
Ireland delivered a strong first half, with growth across the portfolio and successful
revenue management activity. I am particularly pleased with the success of Ballygowan’s
‘Hint of Fruit’. Leveraging the strong brand equity of Ireland’s leading water brand, we
innovated into the growing flavoured water category. Sugar-free, and with less than 3
calories per serve, Ballygowan with a ‘Hint of Fruit’ is sourced locally and available in 3
great tasting flavours: Strawberry, Summer Fruits, and Mango and Passion Fruit. A year after
launch, it has achieved an 18% share of the flavoured water category and nearly €6m of
retail sales value, making it the number one soft drink launch in Ireland.
As part of our healthier planet strategy, and in keeping with the Ballygowan brand, we’ve
recently entered into an agreement for Ballygowan production to be 100% wind powered,
helping to reduce our direct carbon emissions by 90%. This has been achieved through a new
Customer Corporate Power Purchase Agreement (CPPA) with Flogas Enterprise, and is the first
Irish-based CPPA of its kind with a drinks brand in Ireland. It will allow Britvic Ireland
to fund electricity generation, producing enough electricity annually to power our
production facility in Newcastle West. Every Ballygowan bottle is also made from 100%
recycled plastic and is fully recyclable.
In France, trading has been more challenging in the highly competitive retail market.
Pricing discussions have been difficult and have concluded much later than in our other
markets. In the first half, we faced double-digit inflation with minimal price benefit to
mitigate the impact; while pricing has now gone through, it is not sufficient to cover
inflation and we are also yet to observe volume impacts in market. Strategically we continue
to build resilience, simplifying the Teisseire range globally, with a strong new visual
identity, and consistent branding across all markets. Going forwards, this will improve
supply chain resilience and manufacturing benefits, as well as support customer
negotiations. In addition, we continue to focus on innovation, with lower sugar and natural
ingredient ranges to meet consumer needs.
Our global premium brands, London Essence and Mathieu Teisseire, continued to make progress
in the first half. London Essence has secured an exclusive pouring agreement with Ennismore
Hotels, a premium global hospitality brand majority-owned by Accor, as well as Ritz Carlton
listings in Melbourne and Hong Kong. The crafted soda range has expanded with two new
flavours – Aromatic Orange & Fig, and Raspberry & Rose. While Mathieu Teisseire recently won
gold at the prestigious Monde selection awards 2023 for four of our new flavours. New
listings have also been secured for two tea chains across China as well as new listings in
Thailand, Indonesia, and Malaysia.
Outlook
While all companies have faced significant economic uncertainty and considerable
inflationary pressures, the soft drinks category continues to demonstrate high levels of
resilience. Soft drinks are an affordable staple, offering great quality and value choices
for all occasions. We have a portfolio of leading brands enjoyed by millions of consumers.
Our strategy is building momentum, and we will continue to invest to unlock growth.
This year and into the future, I am confident we will continue to make further progress,
creating value for both our shareholders and all our stakeholders.
Financial Review
Overview
We have delivered a strong start to the year, with revenue, adjusted EBIT margin, and
adjusted EBIT ahead of last year. Group revenue increased 7.9% year-on-year on a constant
currency basis. We saw a sequential improvement with second-quarter revenue increasing 8.4%
year-on-year and volume returning to growth, up 0.6%.
We have successfully executed pricing plans in each of our markets through the first half.
In addition to base price, we have used other levers to help mitigate inflationary pressure,
including pack mix, promotional optimisation, productivity initiatives and disciplined cost
management. Brand contribution is ahead of last year, aided by the favourable phasing of
A&P into the second half of the year.
Adjusted EBIT, on a constant currency basis, increased 16.7% to £85.3m, resulting in an
adjusted EBIT margin of 10.7%, an 80bps improvement year-on-year. The increase in adjusted
EBIT margin reflects the strong trading performance and phasing of A&P into the second
half.
Adjusted EPS increased 17.5% year-on-year. The interim dividend equates to 8.2p per share, a
year-on-year increase of 5.1%, reflecting multiple factors including the accelerated profit
delivery in the first half. We remain committed to a 50% dividend pay-out policy.
Since 31 March 2022, we have paid dividends of £75.3m and executed a share buyback of
£75.0m, while maintaining our leverage with an adjusted net debt/EBITDA ratio of 2.2x at 31
March 2023. Our confidence in the prospects of the business and cash generation has resulted
in the Board’s decision to confirm a further share buyback programme of £75.0m over the next
12 months, subject to market conditions and other uses of capital.
Below is a summary of the segmental performance and explanatory notes related to items,
including taxation, interest, and free cash flow generation.
% change
6 months ended 6 months ended
GB actual
31 March 2023 31 March 2022
exchange rate
Volume (million litres) 820.7 827.1 (0.8)%
ARP per litre 66.3p 59.6p 11.2%
Revenue (£m) 544.2 493.0 10.4%
Brand contribution (£m) 218.6 187.8 16.4%
Brand contribution margin 40.2% 38.1% 210bps
See glossary on page 15 for definitions of performance measures.
In GB, we have delivered strong revenue growth, 10.4% ahead of last year through both owned
and PepsiCo brands. While volume in the first half was down 0.8%, performance improved in
the second quarter with volume growth of 1.2%. ARP growth of 11.2% was driven by an improved
mix and the benefit of price and promotional actions implemented during the half. In
mainstream carbonates, Tango, and Pepsi were the main drivers of growth, with revenue
increasing 39.7% and 9.2% respectively. Tango benefited from the addition of new,
sugar-free variants, while no-sugar MAX continued to lead the growth for Pepsi. Rockstar was
a drag on performance, with revenue down 25.1% on last year, partly due to the third-party
supply issues. Rockstar production moved in-house during Q2 and we will be activating an
upweighted marketing and field sales plan in the second half. J2O revenue increased 20.9%
following a strong Christmas, while Robinsons RTD continued to build scale, with revenue up
67.0% on last year, partially due to the planned delist of Drench. Brand contribution margin
increased 210bps, largely from the planned phasing of A&P spend into the second half of the
year.
% change
% change
6 months ended 6 months ended like-for-like
Brazil actual
31 March 2023 31 March 2022 at constant
exchange rate
exchange rate
Volume (million litres) 143.4 154.8 (7.4)% (7.4)%
ARP per litre 52.8p 41.8p 26.3% 6.5%
Revenue (£m) 75.7 64.7 17.0% (1.4)%
Brand contribution* (£m) 18.2 13.7 32.8% 12.3%
Brand contribution margin* 24.0% 21.1% 290bps 290bps
*Brand contribution for the 6 months ended 31 March 2022 restated by +£4.4m from £9.3m to
£13.7m to correctly present certain costs that are fixed in nature (see fixed costs below).
Brand contribution margin for the 6 months ended 31 March 2022 adjusted accordingly from
14.3% to 21.1%.
In Brazil, revenue declined 1.4%, with volume down 7.4%. This was due to a weaker
performance of the fruit processing business known as ‘Be Ingredient’, where revenue was
down over 50%, reflecting the impact of poor weather on crop supply and a competitive
trading environment.
Our branded portfolio delivered a solid performance, with revenue 7% ahead of last year,
benefiting from the price realisation actions taken in the last year. Our high-margin
flavour concentrates revenue was +26.2%, Fruit Shoot +50.1% and Seleção grape juice +40.8%.
This was partly offset by a 15.6% revenue decline in the competitively priced, lower margin,
RTD juice pack formats. Consequently, the combination of price realisation and positive mix
has resulted in brand contribution margin increasing by 290bps.
% change
% change
6 months ended 6 months ended like-for-like
Other International actual
31 March 2023 31 March 2022 at constant
exchange rate
exchange rate
Volume (million litres) 190.0 193.7 (1.9)% (1.9)%
ARP per litre 91.6p 83.4p 9.8% 6.8%
Revenue (£m) 174.1 161.6 7.7% 4.7%
Brand contribution (£m) 42.7 48.0 (11.0)% (13.0)%
Brand contribution margin 24.5% 29.7% (520)bps (500)bps
Note: Other International consists of France, Ireland and other international markets.
Concentrate sales are included in both revenue and ARP but do not have any associated
volume.
In Other International, volume declined 1.9%, revenue increased 4.7%, while brand
contribution declined 13.0%. Performance in Ireland was robust, with growth in the key
metrics of volume, ARP, revenue, and brand contribution. Margin declined, reflecting
inflationary cost pressure and brand mix, with Ballygowan water and carbonates growing ahead
of higher margin products, such as MiWadi and Robinsons. We also generated revenue growth in
the USA, Middle East and Asia. Performance in France was weak, with both volume and revenue
down year-on-year, led by the higher-margin Teisseire brand. Price increases have been
especially difficult in the French retail environment and could only be achieved at the end
of the half, while cost inflation impacted from the start of the year.
% change
6 months ended 6 months ended % change
like-for-like
Fixed costs – pre-adjusting items 31 March 2023 31 March 2022 actual
at constant
£m £m exchange rate
exchange rate
Non-brand A&P (6.0) (5.2) (15.4)% (15.4)%
Fixed supply chain* (70.2) (68.6) (2.4)% 0.2%
Selling costs (45.3) (37.9) (19.5)% (16.5)%
Overheads and other (72.8) (64.3) (13.2)% (11.1)%
Total (194.3) (176.0) (10.4)% (8.0)%
Total A&P investment (21.8) (25.7)
A&P as a % of own brand revenue 2.7% 3.6%
* Fixed supply chain costs for 6 months ended 31 March 2022 restated by +£4.4m from £64.2m
to £68.6m to correctly present Brazil costs that are fixed in nature.
Overall, our fixed cost base increased 8.0% on a like-for-like basis. Total A&P was £3.9m
lower year-on-year, which reflects the planned phasing into the second half of the year.
During the period we increased production capacity, adding a new can line in GB and
additional capacity in Brazil. We invested in additional resource for the field sales team
to support our channel growth strategy. Our people costs have also increased reflecting both
changes to headcount and salary investment to retain and recruit the best talent. We adopted
a tiered approach to ensure those on lower salaries received a higher percentage increase,
in recognition of the increased costs of living people face.
Finance costs
The net finance charge for the period ended 31 March 2023 was £11.4m, compared with £7.8m in
the comparative period, primarily due to the higher cost of borrowing on floating rate debt.
Adjusting items – pre-tax
In the period, the Group incurred, and has separately disclosed, a net charge of £4.6m
(2022: £6.4m) of pre-tax adjusting items. Adjusting items comprised:
• restructuring costs of £0.4m;
• strategic M&A credit of £0.1m in relation to the remeasurement and utilisation of
historic provisions; and
• acquisition-related amortisation of £4.3m.
Taxation
The adjusted tax charge for the period was £15.0m (6 months ended 31 March 2022: £13.8m),
which equates to an adjusted effective tax rate of 21.5% (6 months ended 31 March 2022:
22.4%). This decrease in the effective tax rate is mainly due to the change in profit mix in
overseas jurisdictions and a small prior year adjustment. The reported net tax charge was
£14.9m (6 months ended 31 March 2022: £13.4m), which equates to an effective tax rate of
21.5% (6 months ended 31 March 2022: 22.7%).
Earnings per share (EPS)
Adjusted basic EPS for the period was 22.8 pence, an increase of 17.5% (at actual exchange
rates) on the prior year, due to higher operating profits in the half and the impact of a
lower number of shares in issue because of the share buyback. Adjusted diluted EPS improved
16.5%. Basic EPS for the period was 21.0 pence, an increase of 22.3% on last year. Diluted
EPS for the period was 20.9 pence, an increase of 22.2% on the same period last year.
Dividends
The Board is proposing an interim dividend of 8.2p per share, with a total value of £21.2m.
The interim dividend for 2023 will be paid on 5 July 2023 to shareholders on record as of 26
May 2023. The ex-dividend date is 25 May 2023.
Share buyback programme
On 23 May 2022, the company commenced an initial share buyback programme to repurchase
ordinary shares with a market value of up to £75.0m. The purpose of the programme was to
reduce share capital and, accordingly, the shares repurchased were subsequently cancelled.
During the half year ended 31 March 2023, the company has completed the initial share
buyback, returning £37.3m to shareholders this half year, excluding transaction costs.
Adjusted net debt leverage at 31 March 2023 is 2.2x and is within Britvic’s long-term policy
for leverage to be maintained within a range of 1.5x to 2.5x.
In the context of Britvic’s expected free cash flow and its capital requirements over the
next three years, the Board believes it is appropriate to commence a further share buyback
of up to £75m over the next 12 months. Britvic will continue to assess the strength of the
balance sheet on an annual basis, in the context of its growth ambitions. The company’s
dividend policy remains unchanged.
Free cash flow
Free cash flow (defined as cash generated from operating activities, plus proceeds from sale
of property, plant and equipment, less capital expenditure, interest and repayment of lease
liabilities) was an outflow of £9.0m, compared with an inflow of £2.0m in the 6 months ended
31 March 2022.
Cash generated from operating activities before changes in working capital and income tax
paid was £110.6m compared with £95.2m in the comparative period, reflecting an improved
operating performance and continued disciplined cash management during the half year.
This half year there was a working capital outflow of £65.3m (6 months ended 31 March 2022:
£47.6m outflow), comprising an outflow from increases in inventory of £48.8m (6 months ended
31 March 2022: £36.2m outflow), an inflow from decreases in trade and other receivables of
£43.2m (6 months ended 31 March 2022: £2.8m outflow), an outflow from decreases in trade and
other payables of £58.9m (6 months ended 31 March 2022: £5.7m outflow) and an outflow from
decreases in provisions of £0.8m (6 months ended 31 March 2022: £2.9m outflow).
The increased inventory levels since year-end were due to inflation and an increased level
of both raw materials and finished goods stock to protect our customer service levels as we
approach the summer period.
Net income taxes paid were £9.6m (6 months ended 31 March 2022: £9.2m).
Cash capital expenditure increased slightly from £24.6m during the 6 months ended 31 March
2022 to £29.4m for the current half year, reflecting our continued investment. Lease
payments increased from £4.7m to £6.0m.
Treasury management
The financial risks faced by the Group are identified and managed by a central treasury
department, whose activities are carried out in accordance with Board approved policies and
subject to regular Audit and Treasury Committee reviews. The department does not operate as
a profit centre and no transaction is entered into for trading or speculative purposes. Key
financial risks managed by the treasury department include exposures to movements in
interest rates, foreign exchange rates and commodities, while managing the Group’s debt and
liquidity profile. The Group uses financial instruments to hedge against interest rate and
foreign currency exposures as well as commodity exposures, including aluminium, sugar, gas,
power, diesel and certain resin components.
In December 2022, private placement notes with a principal amount of US$43.0m reached
maturity, resulting in a cash outflow of £27.8m, net of the impact of derivatives.
On 31 March 2023, the Group had £933.8m of committed debt facilities, consisting of a
£400.0m bank facility and a series of private placement notes, with maturities between
February 2024 and May 2035. £83.0m was drawn under the bank facility at 31 March 2023.
£366.7m of the bank facility matures in February 2027 and the remaining £33.3m will mature
in February 2025. The next maturity for the company’s private placement notes is in February
2024, when notes with outstanding principal amounts of US$39.0m and £15.0m will be due for
repayment.
On 31 March 2023, the Group’s adjusted net debt, including the impact of interest rate
currency swaps hedging the balance sheet value of the private placement notes, was £593.4m,
which compares with £474.8m at 30 September 2022. The increase in net debt reflects the
seasonality of the business, where profits and operating cash flow are higher in the second
half of the year, and that during the first half of the year the company has paid dividends
of £54.6m and purchased own shares of £55.5m.
Excluding derivative hedges, net debt was £615.0m, comprising £555.4m of private placement
notes, £83.0m of borrowings under the bank facility, £3.9m of accrued interest, offset by
net cash and overdrafts of £25.0m and unamortised debt issue costs of £2.3m. Adjusted net
debt to EBITDA leverage at 31 March 2023 was 2.2x, maintaining the same level as at 31 March
2022.
Pensions
At 31 March 2023, Britvic plc had IAS 19 pension surpluses in GB, ROI and NI totalling
£108.4m and an IAS 19 pension deficit in France of £1.2m (30 September 2022: pension
surpluses of £138.9m and pension deficits of £1.4m). The decrease in the net pension assets
is primarily attributable to a net remeasurement loss of £39.0m, of which £36.6m relates to
the GB scheme.
The net income for defined benefit schemes recognised in the income statement for the 6
months ended 31 March 2023 was £3.2m (6 months ended 31 March 2022: net income of £0.7m).
The defined benefit section of the GB plan was closed to new members on 1 August 2002 and
closed to future accrual for active members from 1 April 2011, with new employees being
invited to join the defined contribution scheme. The Northern Ireland scheme was closed to
new members on 28 February 2006 and future accrual from 31 December 2018, and new employees
are eligible to join the defined contribution scheme. All new employees in Ireland join the
defined contribution plan.
Contributions are paid into the defined benefit section of the GB plan as determined by the
trustee, agreed by the company and certified by an independent actuary in the schedule of
contributions. As noted in the Group’s Annual Report and Accounts 2022, no further deficit
funding payments are due to be paid except for the £5.0m annual partnership payment which
will continue until 2025. The triennial valuation as of 31 March 2022 was finalised in April
2023 and did not result in any change to the schedule of contributions.
The triennial valuation reflects that, in April 2023, an agreement in principle has been
reached between the trustee and the company that all pension increases (excluding GMP) under
the plan should be based on the RPI measure of inflation. This is expected to result in an
amendment to the plan’s trust deed and rules to clarify that the company does not have the
power to set an alternative rate of pension increases. The triennial valuation also reflects
revised demographic assumptions, including mortality base tables. The company expects to
incorporate revised pension increase and demographic assumptions in its forthcoming
actuarial valuation at 30 September 2023 prepared in accordance with IAS 19 ‘Employee
Benefits’. The company is at an early stage in quantifying the impact of the revised
assumptions on the defined benefit pension surplus recognised in the consolidated balance
sheet. Initial high-level estimates suggest that the revised RPI pension increase
assumptions would decrease the pension surplus by approximately £20m and that revised
mortality assumptions would positively impact the surplus by approximately £13m. The revised
mortality assumptions take into consideration the latest plan-specific and wider UK
population mortality experience.
Risk management process
As with any business, Britvic faces risks and uncertainties. We believe that effective risk
management supports the successful delivery of our strategic objectives. The management of
these risks is based on a balance of risk and reward, determined through assessment of the
likelihood and impact, as well as the Group’s risk appetite. The Executive team performs a
formal robust assessment of the principal risks facing the Group bi-annually, which is
reviewed by the Board. Similarly, all business units and functions perform formal risk
assessments that consider the Group’s principal risks and specific local risks relevant to
the market in which they operate.
Risks are monitored throughout the year with consideration given to internal and external
factors and the Group’s risk appetite. We continue to further refine and embed our risk
management approach across the breadth of the organisation, focussing on driving the
effectiveness of the risk management framework across the organisation. Updates to risks and
mitigation plans are managed agilely, with changes made as required. In response to the
volatile and uncertain external environment, the risk team has continued to support each of
our markets and functions in identifying and managing existing and emerging risks to the
organisation.
The principal risks and uncertainties facing the Group are set out on pages 73 to 75 of the
Britvic Annual Report and Accounts 2022. These principal risks and uncertainties include:
consumer preference; health concerns; retailer landscape and customer relationships; supply
chain; sustainability and environment; market; quality of our products and the health and
safety of our people; legal and regulatory; technology and information security; treasury,
tax and pensions; and talent.
The nature and potential impact of the principal risks and uncertainties facing Britvic did
not change in the six months ended 31 March 2023 and are not expected to change during the
second half of the financial year.
Glossary
A&P is a measure of marketing spend including marketing, research and advertising.
Acquisition-related amortisation is the amortisation of intangibles recognised as part of a
business combination.
Adjusted earnings per share (Adjusted EPS) is a non-GAAP measure calculated by dividing
adjusted earnings by the average number of shares during the year. Adjusted earnings is
defined as the profit/(loss) attributable to ordinary equity shareholders before adjusting
items. Average number of shares during the year is defined as the weighted average number of
ordinary shares outstanding during the period excluding any own shares held by Britvic that
are used to satisfy various employee share-based incentive programmes.
Adjusted effective tax rate is a non-GAAP measure and is defined as the income tax
charge(credit), excluding the tax effect of Adjusting items, as a proportion of the Adjusted
profit before tax.
Adjusted EBIT is a non-GAAP measure and is defined as operating profit before adjusting
items.
Adjusted EBIT margin is a non-GAAP measure and is defined as Adjusted EBIT as a proportion
of Revenue.
Adjusted EBITDA is a non-GAAP measure calculated by taking Adjusted EBIT and adding back
depreciation, amortisation and loss on disposal of property, plant and equipment and
deducting payments of lease liabilities as an estimate for pre-IFRS16 rental charges.
Adjusted net debt is a non-GAAP measure and is defined as net debt, adding back the impact
of derivatives hedging the balance sheet debt.
Adjusted net debt/EBITDA is a non-GAAP measure and is defined as the ratio of Adjusted net
debt to Adjusted EBITDA (calculated for the preceding 12 months).
Adjusted profit before tax is a non-GAAP measure and is defined as profit before tax,
excluding Adjusting items, with the exception of acquisition-related amortisation.
Adjusting items are those items of income and expense set out in Appendix 1 that have been
identified because of their size, frequency and nature to provide shareholders with
management’s view of the underlying financial performance in the period.
AER are changes in measures at actual exchange rates.
ARP is defined as average revenue per litre sold, excluding factored brands and concentrate
sales.
bps is basis points and is a measure used to describe the percentage change in a value. One
basis point is equivalent to 0.01%.
Brand contribution is a non-GAAP measure and is defined as revenue, less material costs and
all other marginal costs that management considers to be directly attributable to the sale
of a given product. Such costs include brand specific advertising and promotion costs, raw
materials and marginal production and distribution costs. Brand contribution is reconciled
to profit before tax in note 6 of the interim financial statements.
Brand contribution margin is a non-GAAP measure and is a percentage measure calculated as
brand contribution divided by revenue. Each business unit’s performance is reported down to
the brand contribution level.
Constant exchange rate is a non-GAAP measure of performance in the underlying currency to
eliminate the impact of foreign exchange movements.
EPS is Earnings Per Share.
FMCG is Fast Moving Consumer Goods.
Free cash flow is a non-GAAP measure and is defined as cash generated from operating
activities, plus proceeds from the sale of property, plant and equipment, less capital
expenditure, interest and repayment of lease liabilities.
GB is Great Britain.
GMP is Guaranteed Minimum Pension.
Group is Britvic plc, together with its subsidiaries.
Immediate Consumption is defined as pack formats to be consumed on purchase, rather than
deferred packs which are purchased and consumed later.
Innovation is defined as new launches over the last five years, excluding new flavours and
pack sizes of established brands.
M&A is mergers and acquisitions.
Net debt is the sum of interest-bearing loans and borrowings, overdrafts and cash and cash
equivalents.
NI is Northern Ireland.
Non-GAAP measures are provided because they are closely tracked by management to evaluate
Britvic’s operating performance and to make financial, strategic and operating decisions.
Operating profit margin is operating profit as a proportion of revenue, both as reported in
the consolidated income statement.
PET is polyethylene terephthalate plastic.
RCF is revolving credit facility.
Revenue is defined as sales achieved by the Group net of price promotional investment and
retailer discounts.
ROI is Republic of Ireland.
rPET is recycled polyethylene terephthalate plastic.
RTD is ready to drink.
Volume is defined as number of litres sold. No volume is recorded in respect of
international concentrate sales or Brazil fruit pulp sales.
BRITVIC PLC
RESPONSIBILITY AND CAUTIONARY STATEMENTS
Company number: 5604923
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge, this unaudited condensed set of
consolidated interim financial statements has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34 ‘Interim Financial Reporting’ and that
the interim management report herein includes a fair review of the information required by
DTR 4.2.7R (indication of important events and their impact during the first six months and
description of principal risks and uncertainties for the remaining six months of the year)
and DTR 4.2.8R (disclosure of related parties’ transactions and changes therein).
CAUTIONARY STATEMENT
This report is addressed to the shareholders of Britvic plc and has been prepared solely to
provide information to them.
This report is intended to inform the shareholders of the Group’s performance during the six
months to 31 March 2023. This report contains forward-looking statements made in good faith
based on knowledge and information available to the Directors at the date the report was
prepared. These statements should be treated with caution due to the inherent uncertainties
underlying any such forward-looking information and any statements about the future outlook
may be influenced by factors that could cause actual outcomes and results to be materially
different.
DIRECTORS
The Directors of Britvic plc are:
John Daly
Ian Durant
Simon Litherland
Sue Clark
Euan Sutherland
William Eccleshare
Emer Finnan
Hounaida Lasry
By order of the Board,
Simon Litherland
Chief Executive Officer
Date: 15 May 2023
INDEPENDENT REVIEW REPORT TO BRITVIC PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in
the half-yearly financial report for the six months ended 31 March 2023 which comprises the
Condensed Consolidated Income Statement, the Condensed Consolidated Statement of
Comprehensive Income, the Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Balance Sheet, the Condensed Consolidated Statement of Cash Flows,
and related notes 1 to 21.
Based on our review, nothing has come to our attention that causes us to believe that the
condensed set of financial statements in the half-yearly financial report for the six months
ended 31 March 2023 is not prepared, in all material respects, in accordance with United
Kingdom adopted International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom’s Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK)
2410 “Review of Interim Financial Information Performed by the Independent Auditor of the
Entity” issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK)
2410). A review of interim financial information consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in Note 2, the annual financial statements of the group are prepared in
accordance with United Kingdom adopted international accounting standards. The condensed set
of financial statements included in this half-yearly financial report has been prepared in
accordance with United Kingdom adopted International Accounting Standard 34, “Interim
Financial Reporting”.
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed in an audit as
described in the Basis for Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately adopted the going concern basis
of accounting or that the directors have identified material uncertainties relating to going
concern that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with ISRE (UK)
2410; however future events or conditions may cause the entity to cease to continue as a
going concern.
Responsibilities of the Directors
The directors are responsible for preparing the half-yearly financial report in accordance
with the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial
Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible for assessing
the group’s ability to continue as a going concern, disclosing as applicable, matters
related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for expressing to the
company a conclusion on the condensed set of financial statements in the half-yearly
financial report. Our Conclusion, including our Conclusion Relating to Going Concern, are
based on procedures that are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410. Our work has
been undertaken so that we might state to the company those matters we are required to state
to it in an independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the
company, for our review work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London
15 May 2023
BRITVIC PLC
CONDENSED consolidated income statement
For the 6 months ended 31 March 2023
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
(unaudited) (unaudited) (audited)
Note £m £m £m
Revenue 6 794.0 719.3 1,618.3
Cost of sales (487.5) (427.4) (952.4)
Gross profit 306.5 291.9 665.9
Selling and distribution expenses (126.6) (128.4) (266.8)
Administration expenses (99.2) (96.4) (206.7)
Operating profit 80.7 67.1 192.4
Finance income 0.4 0.4 0.9
Finance costs (11.8) (8.2) (18.2)
Profit before tax 69.3 59.3 175.1
Income tax expense 7 (14.9) (13.4) (34.9)
Profit for the period attributable to 54.4 45.9 140.2
the equity shareholders
Earnings per share
Basic earnings per share 8 21.0p 17.2p 52.6p
Diluted earnings per share 8 20.9p 17.1p 52.5p
BRITVIC PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(EXPENSE)
For the 6 months ended 31 March 2023
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
(unaudited) (unaudited) (audited)
Note £m £m £m
Profit for the period attributable to 54.4 45.9 140.2
the equity shareholders
Items that will not be reclassified to
profit or loss
Remeasurement (losses)/gains on defined 15 (39.0) 24.1 (2.1)
benefit pension schemes
Current tax on pension contributions – – 0.1
Deferred tax on defined benefit pension 9.5 (5.3) 2.3
plans
Deferred tax on other temporary 0.1 – –
differences
(29.4) 18.8 0.3
Items that may be subsequently
reclassified to profit or loss
(Losses)/gains in the period in respect 18 (30.4) 18.5 56.6
of cash flow hedges
Amounts reclassified to the income
statement in respect of cash flow 18 (6.1) (2.1) (23.8)
hedges
Current tax in respect of cash flow
hedges accounted for in the – – 0.5
hedging reserve
Deferred tax in respect of cash flow
hedges accounted for in the hedging 18 7.3 (2.7) (6.8)
reserve
Exchange differences reclassified to
profit or loss on disposal of foreign 18 (0.3) – (0.8)
operations
Exchange differences on translation of 18 (3.9) 15.7 28.9
foreign operations
Tax on exchange differences accounted 18 (0.2) (0.3) 0.5
for in the translation reserve
(33.6) 29.1 55.1
Other comprehensive (loss)/income for (63.0) 47.9 55.4
the period, net of tax
Total comprehensive (loss)/income for
the period attributable to the equity (8.6) 93.8 195.6
shareholders
BRITVIC PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 31 March 2023
Restated* Restated*
31 March 2023
31 March 2022 30 September
2022
(unaudited) (unaudited) (audited)
Note £m £m £m
Non-current assets
Property, plant and 9 516.6 479.1 513.9
equipment
Right-of-use assets 63.9 70.2 68.7
Intangible assets 9 410.9 403.9 416.4
Other receivables 8.3 7.3 6.0
Derivative financial 13 18.1 23.3 45.9
instruments
Deferred tax assets 4.1 3.5 4.4
Retirement benefit assets 15 108.4 164.0 138.9
1,130.3 1,151.3 1,194.2
Current assets
Inventories 218.8 179.7 172.0
Trade and other receivables 394.7 384.9 445.2
Current income tax 6.7 12.2 10.9
receivables
Derivative financial 13 17.6 22.3 38.9
instruments
Cash and cash equivalents 48.0 33.3 97.4
Other current assets – – 3.1
685.8 632.4 767.5
Assets held for sale 19 16.8 16.8 16.8
702.6 649.2 784.3
Total assets 1,832.9 1,800.5 1,978.5
Current liabilities
Trade and other payables (473.1) (425.6) (508.8)
Commercial rebate (111.3) (121.1) (137.0)
liabilities
Lease liabilities (7.5) (10.2) (8.6)
Interest-bearing loans and 10 (50.4) (36.1) (42.2)
borrowings
Derivative financial 13 (8.6) (1.5) (11.2)
instruments
Current income tax – (2.1) (0.2)
liabilities
Overdrafts (23.0) (9.3) (9.8)
Provisions 16 (0.9) (2.3) (1.9)
Other current liabilities (5.6) (10.2) (11.1)
(680.4) (618.4) (730.8)
Non-current liabilities
Lease liabilities (61.9) (65.0) (65.3)
Interest-bearing loans and 10 (589.6) (543.9) (563.1)
borrowings
Deferred tax liabilities (107.2) (114.4) (123.1)
Retirement benefit 15 (1.2) (1.9) (1.4)
obligations
Derivative financial 13 (1.1) – (0.4)
instruments
Provisions 16 (1.0) (0.6) (0.9)
Other non-current – (5.7) (5.5)
liabilities
(762.0) (731.5) (759.7)
Total liabilities (1,442.4) (1,349.9) (1,490.5)
Net assets 390.5 450.6 488.0
Equity
Issued share capital 11 51.7 53.5 52.7
Share premium account 157.2 157.2 157.2
Own shares reserve (16.8) (0.9) (7.2)
Other reserves 18 77.5 81.3 106.0
Retained earnings 120.9 159.5 179.3
Total equity 390.5 450.6 488.0
* Comparative figures for overdrafts and cash and cash equivalents have been restated as set
out in Note 2 'basis of preparation’.
BRITVIC PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the 6 months ended 31 March 2023
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
(unaudited) (unaudited) (audited)
Note £m £m £m
Cash flows from operating activities
Profit before tax 69.3 59.3 175.1
Net finance costs 11.4 7.8 17.3
Other financial instruments (2.9) (1.7) 0.8
Depreciation of property, plant and 21.7 20.1 40.9
equipment
Depreciation of right-of-use assets 5.1 5.2 10.9
Loss on disposal of property, plant and 1.7 0.3 0.9
equipment and intangible assets
Amortisation 8.0 7.6 15.6
Share-based payments charge, net of 5.8 2.9 4.2
cash settlements
Net pension charge less contributions (8.8) (6.3) (7.6)
Net foreign exchange differences (0.4) – 2.0
Exchange differences reclassified to
profit or loss from other comprehensive (0.3) – (0.8)
income
Increase in inventory (48.8) (36.2) (26.0)
Decrease/(increase) in trade and other 43.2 (2.8) (56.4)
receivables
(Decrease)/increase in trade and other
payables and commercial rebate (58.9) (5.7) 84.3
liabilities
Decrease in provisions (0.8) (2.9) (3.2)
Income tax paid (9.6) (9.2) (18.4)
Net cash flows from operating 35.7 38.4 239.6
activities
Cash flows from investing activities
Purchases of property, plant and (25.5) (21.8) (72.9)
equipment
Purchases of intangible assets (3.9) (2.8) (11.7)
Interest received 0.3 0.1 0.2
Net cash flows used in investing (29.1) (24.5) (84.4)
activities
Cash flows from financing activities
Interest paid, net of derivative (9.3) (7.1) (14.8)
financial instruments
Net movement on revolving credit 10 83.1 – –
facility
Payment of principal portion of lease (5.0) (3.8) (9.3)
liabilities
Payment of interest portion of lease (1.0) (0.9) (2.1)
liabilities
Other derivative cash – 0.9 (0.8)
receipts/(payments)
Repayment of private placement notes, (27.8) – –
net of derivative financial instruments
Issue costs paid 10 – (0.3) (0.3)
Proceeds from employee share incentive 0.9 0.9 1.0
schemes
Purchase of own shares related to share (16.7) (3.3) (9.0)
schemes
Share buyback programme (38.8) – (36.7)
Dividends paid to equity shareholders 12 (54.6) (47.2) (67.9)
Net cash flows from financing (69.2) (60.8) (139.9)
activities
Net (decrease)/increase in cash and (62.6) (46.9) 15.3
cash equivalents
Cash and cash equivalents at the 87.6 71.1 71.1
beginning of the period
Net foreign exchange differences on – (0.2) 1.2
cash and cash equivalents
Cash and cash equivalents at the end of 25.0 24.0 87.6
the period
Presented in the balance sheet as:
Cash and cash equivalents(1) 48.0 33.3 97.4
Overdrafts(1)(2) (23.0) (9.3) (9.8)
Cash and cash equivalents at the end of the period 25.0 24.0 87.6
1. Comparative figures for overdrafts and cash and cash equivalents have been restated as
set out in Note 2 'basis of preparation’.
2. Bank overdrafts are included in the cash and cash equivalents presented in the statement
of cash flows because they form an integral part of the Group’s cash management.
BRITVIC PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months ended 31 March 2023
For the 6 months ended 31 March 2023 (unaudited)
Other reserves
Issued Share Own
Capital Hedging Translation Merger Retained
share premium shares redemption reserve reserve reserve Total
reserve earnings
capital account reserve
£m £m £m £m £m £m £m £m £m
At 1 October 52.7 157.2 (7.2) 0.9 27.3 (9.5) 87.3 179.3 488.0
2022
Profit for – – – – – – – 54.4 54.4
the period
Other
comprehensive – – – – (29.2) (4.4) – (29.4) (63.0)
loss
Total
comprehensive – – – – (29.2) (4.4) – 25.0 (8.6)
(loss)/income
Share buyback (1.0) – 1.1 1.0 – – – (38.7) (37.6)
programme
Own shares
purchased for – – (16.4) – – – – 9.8 (6.6)
share schemes
Own shares
utilised for – – 5.7 – – – – (4.8) 0.9
share schemes
Movement in
share-based – – – – – – – 4.6 4.6
schemes
Current tax
on – – – – – – – 0.1 0.1
share-based
payments
Deferred tax
on – – – – – – – 0.2 0.2
share-based
payments
Transfer of
cash flow
hedge reserve – – – – 4.1 – – – 4.1
to
inventories
Payment of – – – – – – – (54.6) (54.6)
dividend
At 31 March 51.7 157.2 (16.8) 1.9 2.2 (13.9) 87.3 120.9 390.5
2023
For the 6 months ended 31 March 2022 (unaudited)
Other reserves
Issued Share Own
Hedging Translation Merger Retained
share premium shares reserve reserve reserve Total
earnings
capital account reserve
£m £m £m £m £m £m £m £m
At 1 October 2021 53.5 156.2 (1.5) 4.5 (38.1) 87.3 148.8 410.7
Profit for the period – – – – – – 45.9 45.9
Other comprehensive – – – 13.7 15.4 – 18.8 47.9
income
Total comprehensive – – – 13.7 15.4 – 64.7 93.8
income
Issue of shares – 1.0 (1.0) – – – – –
Own shares purchased for – – (3.2) – – – 3.2 –
share schemes
Own shares utilised for – – 4.8 – – – (12.0) (7.2)
share schemes
Movement in share-based – – – – – – 2.8 2.8
schemes
Current tax on – – – – – – 0.2 0.2
share-based payments
Deferred tax on – – – – – – (1.0) (1.0)
share-based payments
Transfer of cash flow
hedge reserve to – – – (1.5) – – – (1.5)
inventories
Payment of dividend – – – – – – (47.2) (47.2)
At 31 March 2022 53.5 157.2 (0.9) 16.7 (22.7) 87.3 159.5 450.6
BRITVIC PLC
notes to the financial information
For the 6 months ended 31 March 2023
1. General information
Britvic plc (the ‘Company’, together with its subsidiaries, the ‘Group’) is a public limited
company, incorporated and domiciled in the United Kingdom. The address of the registered
office is Britvic plc, Breakspear Park, Breakspear Way, Hemel Hempstead, Hertfordshire, HP2
4TZ.
The Company is listed on the London Stock Exchange.
The interim financial statements were authorised for issue by the Board of Directors on 15
May 2023.
2. Basis of preparation
The annual financial statements of the Group will be prepared in accordance with United
Kingdom adopted International Financial Reporting Standards. The condensed set of financial
statements included in this interim financial report has been prepared in accordance with
the Disclosure and Transparency Rules of the Financial Conduct Authority and with the United
Kingdom adopted International Accounting Standard (IAS) 34 ‘Interim Financial Reporting’.
The interim condensed financial statements comprise the condensed consolidated balance sheet
as at 31 March 2023 and the condensed consolidated income statement, condensed consolidated
statement of cash flows, condensed consolidated statement of comprehensive income/(expense),
condensed consolidated statement of changes in equity and the related notes 1 to 21 for the
6 months then ended of Britvic plc (the ‘financial information’).
These interim condensed financial statements do not constitute statutory accounts as defined
by Section 434 of the Companies Act 2006. They have been reviewed but not audited by the
Group’s auditor. The statutory accounts for Britvic plc for the year ended 30 September 2022
have been delivered to the Registrar of Companies, and were audited by the Group’s previous
auditor, Ernst & Young LLP. The auditor’s opinion on those accounts was unqualified, did not
draw attention to any matters by way of emphasis and did not contain a statement made under
section 498 (2) or (3) of the Companies Act 2006.
Restatement of overdrafts and cash and cash equivalents
The Group has identified that the balance sheet presentation of its notional cash pooling
arrangements did not comply with the requirements of IAS 32 ‘Financial Instruments:
Presentation’. The Group has previously presented cash and overdraft balances subject to
notional cash pooling arrangements on a net basis within cash and cash equivalents. However,
following a review of this facility and guidance issued by the IFRS Interpretations
Committee, it was determined that the balances did not meet all of the criteria in IAS 32
for offset. The prior period balance sheets have therefore been restated to show cash and
overdraft balances on a gross basis. The impact is to increase both cash and cash
equivalents and overdrafts by £9.8m at 30 September 2022 and by £9.3m at 31 March 2022.
There is no impact to the Group’s net debt position, income statement or earnings per share
for the affected periods. There is also no impact on previously presented statement of cash
flows, as the overdrafts are repayable on demand and form an integral part of the Group’s
cash management and are therefore included in the cash and cash equivalents presented in the
statement of cash flows.
3. Going concern
The Directors are satisfied that the Group has adequate resources to continue to operate as
a going concern for the foreseeable future and that no material uncertainties exist with
respect to this assessment. In making this assessment, the Directors have considered the
Group’s balance sheet position and forecast earnings and cash flows for the period from the
date of approval of these financial statements to 30 September 2024. Further details of the
Directors’ assessment are set out below.
The business has faced the challenges posed by a prolonged period of high inflation. The
Group has been able to respond by successfully implementing revenue growth management
actions, including price increases and optimising promotions. Inflationary pressures are
expected to persist throughout the 2023 financial year, which have required price increases
and other actions. This has been reflected in Britvic’s strategic plan and stress test
sensitivities.
As part of the going concern assessment, inflation scenarios have been combined with the
potential impact of key risks that could reasonably arise in the period. The Group has
modelled both a base case scenario and a severe but plausible downside scenario, to assess
the extent to which mitigating actions would be required, all of which are within
management’s control. Mitigating actions can be initiated as they relate to discretionary
and investment spend, without significantly impacting the ability to meet demand.
At 31 March 2023, the Group was operating within the banking covenants related to its
revolving credit facility and private placement notes. The consolidated balance sheet
reflects a net asset position of £390.5m and the liquidity of the Group remains strong. In
2022, the Group successfully secured a one-year extension of its £400.0m revolving credit
facility with six of the seven participating banks. As a result, £366.7m of this facility
now matures in February 2027, with the remaining £33.3m maturing in February 2025. As of 31
March 2023, £83.0m was drawn on the revolving credit facility. The Group’s next debt
maturity is in February 2024 when £39.2m of private placement notes mature, net of
derivative financial instruments. Both the Group’s revolving credit facility and private
placement notes have a net debt/EBITDA covenant limit of 3.5x, excluding IFRS 16 impact.
Based on adjusted net debt of £593.4m and adjusted EBITDA of £268.4m for the preceding 12
months, the net debt/EBITDA ratio at 31 March 2023 was 2.2x and well within the covenant
limit.
Under all the scenarios modelled, including the impact of the share buyback programme, and
after taking available mitigating actions, our forecasts did not indicate a covenant breach
or any liquidity shortages.
On the basis of these reviews, the Directors consider it is appropriate for the going
concern basis to be adopted in preparing the interim financial statements.
4. Accounting policies
The accounting policies applied by the Group in these interim financial statements are
consistent with those applied by the Group in its financial statements for the year ended 30
September 2022. There were no new amendments, standards or interpretations that had a
material effect on the financial position or performance of the Group in the period.
The Group has not identified any changes to its key sources of accounting judgements or
estimations of uncertainty compared with those disclosed in the 2022 Annual Report and
Accounts.
5. Seasonality of operations
Due to the seasonal nature of the business, higher operating profits are usually expected in
the second half of the year than in the first half.
6. Segmental reporting
Operating segments are reported in a manner consistent with internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of the operating segments, has been
identified as the plc Executive team and Board of Directors of the Company.
For management purposes, the Group is organised into business units and has five reportable
segments:
• GB (United Kingdom excluding Northern Ireland)
• Brazil
• Ireland (Republic of Ireland and Northern Ireland)
• France
• International
These business units sell soft drinks into their respective geographical markets. Management
monitors the operating results of its business units separately for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is
evaluated based on brand contribution. This is defined as revenue less material costs and
all other marginal costs that management considers to be directly attributable to the sale
of a given product. Such costs include brand specific advertising and promotion costs, raw
materials and marginal production and distribution costs. All other costs, including net
finance costs and income taxes, are managed on a centralised basis and are not allocated to
reportable segments.
The ‘Other International’ subtotal comprising the Ireland, France and International
reportable segments has been presented to provide linkage to the Financial Review section of
the interim results.
Other International
GB Brazil Ireland France International Subtotal Total
6 months ended 31 March 2023
£m £m £m £m £m £m £m
Revenue from external customers 544.2 75.7 74.0 77.0 23.1 174.1 794.0
Brand contribution 218.6 18.2 22.9 15.1 4.7 42.7 279.5
Non-brand advertising & (6.0)
promotion(1)
Fixed supply chain(2) (70.2)
Selling costs(2) (45.3)
Overheads and other costs(1) (72.7)
Adjusted EBIT 85.3
Net finance costs pre-adjusting (11.4)
items
Adjusting items(3) (4.6)
Profit before tax 69.3
Other International
6 months ended 31 March 2022 GB Brazil(4) Ireland France International Subtotal Total
(restated(4)) £m £m £m £m £m £m £m
Revenue from external customers 493.0 64.7 63.7 76.1 21.8 161.6 719.3
Brand contribution(4) 187.8 13.7 21.1 21.2 5.7 48.0 249.5
Non-brand advertising & (5.2)
promotion(1)
Fixed supply chain(2)(4) (68.6)
Selling costs(2) (37.9)
Overheads and other costs(1) (64.3)
Adjusted EBIT 73.5
Net finance costs pre-adjusting (7.8)
items
Adjusting items(3) (6.4)
Profit before tax 59.3
Other International
12 months ended 30 September GB Brazil(4) Ireland France International Subtotal Total
2022 (restated(4))
£m £m £m £m £m £m £m
Revenue from external 1,100.4 143.0 143.9 179.4 51.6 374.9 1,618.3
customers
Brand contribution(4) 426.0 32.4 49.6 45.9 11.5 107.0 565.4
Non-brand advertising & (10.3)
promotion(1)
Fixed supply chain(2)(4) (135.7)
Selling costs(2) (82.0)
Overheads and other costs(1) (131.4)
Adjusted EBIT 206.0
Net finance costs (17.3)
pre-adjusting items
Adjusting items(3) (13.6)
Profit before tax 175.1
(1) Included within ‘administration expenses’ in the condensed consolidated income
statement. ‘Overheads and other costs’ relate to central expenses including salaries, IT
maintenance, depreciation, and non-acquisition amortisation.
(2) Included within ‘selling and distribution expenses’ in the condensed consolidated income
statement.
3. See appendix 1 for further details on adjusting items.
4. The Group has restated the classification of certain prior period costs in Brazil within
the segmental reporting note. For the year ended 30 September 2022, £9.7m of costs that
are fixed in nature previously included within brand contribution have been reclassified
to fixed supply chain. For the six months ended 31 March 2022, £4.4m of costs have been
reclassified from brand contribution to fixed supply chain. There has been no impact of
this disclosure change on the consolidated income statement.
7. Income tax
The total tax charge for the period is £14.9m (6 months ended 31 March 2022: £13.4m) which
equates to an effective tax rate of 21.5% (6 months ended 31 March 2022: 22.7%).
Tax charge by region
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
UK 16.0 10.7 31.7
Foreign (1.1) 2.7 3.2
Total tax charge in the condensed 14.9 13.4 34.9
consolidated income statement
Analysis of tax charge
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
Current income tax charge 13.7 4.8 15.3
Deferred income tax charge 1.2 8.6 19.6
Total tax charge in the condensed 14.9 13.4 34.9
consolidated income statement
The effective tax rate for the 6 months ended 31 March 2023 has decreased compared to the
effective tax rate for the 6 months ended 31 March 2022. This is mainly due to the change in
profit mix in overseas jurisdictions and a small prior year adjustment.
The deferred tax charge has decreased compared to the 6 months ended 31 March 2022. This
primarily relates to the inclusion in the prior year of the impact of the tax rate increase
in the UK and a restatement following an accounting policy change. The current year
includes an increase in the deferred tax asset on employee incentive plans.
8. Earnings per share
Basic earnings per share amounts are calculated by dividing the net profit for the period
attributable to the equity shareholders of the parent by the weighted average number of
ordinary shares in issue during the period.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to
the equity shareholders of the parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of ordinary shares that are
potentially issuable in connection with employee share-based payment plans.
The following table reflects the income and share data used in the basic and diluted
earnings per share computations:
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
Basic earnings per share
Profit for the period attributable to the 54.4 45.9 140.2
equity shareholders (£m)
Weighted average number of ordinary shares
in issue for basic earnings per share 258.6 267.4 266.5
(millions)
Basic earnings per share (pence) 21.0p 17.2p 52.6p
Diluted earnings per share
Profit for the period attributable to the 54.4 45.9 140.2
equity shareholders (£m)
Effect of number of dilutive potential 1.6 0.6 0.5
ordinary shares – share schemes (millions)
Weighted average number of ordinary shares
in issue for diluted earnings per share 260.2 268.0 267.0
(millions)
Diluted earnings per share (pence) 20.9p 17.1p 52.5p
9. Property, plant and equipment and intangible assets
Property, plant and equipment
During the 6 months ended 31 March 2023 the Group:
• capitalised property, plant and equipment additions at a cost of £27.5m (6 months ended
31 March 2022: £22.5m); and
• disposed of property, plant and equipment with a net book value of £1.7m (6 months ended
31 March 2022: £0.3m) resulting in a loss on disposal of £1.7m (6 months ended 31 March
2022: loss on disposal £0.3m).
There were no impairments or reversals of impairments recognised during the 6 months ended
31 March 2023 (6 months ended 31 March 2022: nil). See note 17 for details of the Group’s
capital commitments.
Intangible assets
During the 6 months ended 31 March 2023, the Group capitalised £3.8m of software additions
(6 months ended 31 March 2022: £2.8m).
The Group performed its last annual impairment test for goodwill and intangible assets with
indefinite lives in September 2022. The key assumptions used to determine the recoverable
amount for the different cash generating units were disclosed in the Group’s Annual Report
and Accounts 2022.
Since the last annual impairment test, management have evaluated whether there are any
indicators that the Group’s assets may be impaired. This evaluation included a review of
business performance for the 6 months ended 31 March 2023 and latest forecasts for the full
year ended 30 September 2023 against the budgets used in the last impairment test. Changes
in the applicable discount rates to determine value in use were also considered.
During the 6 months ended 31 March 2023, Britvic France has been challenged by cost
inflation as well as a decrease in sales volumes, resulting in a decrease in brand
contribution compared to the prior year (see note 6). The Group has updated its estimate of
recoverable amount at 31 March 2023 to take into consideration latest forecasts and discount
rates. The five-year cash flow forecasts used to assess the value in use of the business
assumes that Britvic France is able to grow revenue and improve operating margins. Should
these short-term forecasts not materialise, there is a risk that a reasonable change in
discount rate or long-term growth rate could lead to an impairment. Sensitivity analysis was
performed to assess the impact of a reasonable change in key assumptions to the impairment
headroom of £29.5m. A 1.1% increase in the pre-tax discount rate to 10.6% or a 1.1% decrease
in the long-term growth rate to 0.9% would eliminate the headroom.
During the 6 months ended 31 March 2023, although Britvic Brazil has significantly improved
brand contribution (see note 6), sales volumes and revenue (in constant currency) were lower
than the prior year. Brazil remains a growth market and some of the categories that Britvic
Brazil participate in continue to show high growth, however, growth in some of the
business’s traditional categories is now expected to be more modest. The Group has updated
its estimate of recoverable amount at 31 March 2023 to take into consideration latest
forecasts and discount rates. The five-year cash flow forecasts used to assess the value in
use of the business assumes that Britvic Brazil is able to grow revenue and improve
operating margins. Should these short-term forecasts not materialise, there is a risk that a
reasonable change in discount rate or long-term growth rate could lead to an impairment.
Sensitivity analysis was performed to assess the impact of a reasonable change in key
assumptions to the impairment headroom of £4.6m. A 1.0% increase in the pre-tax discount
rate to 22.0% or a 1.2% decrease in the long-term growth rate to 0.8% would eliminate the
headroom.
No impairment charges have been recognised during the 6 months ended 31 March 2023.
Other than disclosed above in relation to the goodwill held in Britvic Brazil and Britvic
France and as previously disclosed in the Group’s Annual Report and Accounts 2022 in
relation to the Plenish and Ballygowan intangibles, the Directors do not consider that a
reasonable possible change in the assumptions used to calculate recoverable amounts could
result in any impairment.
10. Interest-bearing loans and borrowings
Components of interest-bearing loans and borrowings:
31 March 2023 31 March 2022 30 September 2022
£m £m £m
2010 Notes – (34.0) (39.4)
2014 Notes (107.5) (101.8) (117.2)
2017 Notes (175.0) (175.0) (175.0)
2018 Notes (120.1) (118.7) (120.1)
2020 Notes (152.8) (150.6) (152.7)
Bank loans (83.0) – –
Accrued interest (3.9) (2.8) (3.5)
Unamortised issue costs 2.3 2.9 2.6
Total interest-bearing loans and borrowings (640.0) (580.0) (605.3)
Current (50.4) (36.1) (42.2)
Non-current (589.6) (543.9) (563.1)
Total interest-bearing loans and borrowings (640.0) (580.0) (605.3)
The next maturity for the Group’s private placement notes is in February 2024, when 2014
Notes with outstanding principal amounts of US$39.0m and £15.0m will be due for repayment.
These borrowings are classified as current at 31 March 2023 and had a carrying amount of
£46.5m.
Britvic has a committed £400.0m multi-currency revolving credit facility. A one-year
extension to the maturity of the facility was approved by six of the seven lenders in
February 2022 extending the maturity of £366.7m of this facility to February 2027. The
remaining £33.3m will mature in February 2025. Borrowings drawn against the facility incur
interest at a market reference rate plus a margin based upon a financial covenant ratio.
Amounts drawn can be repaid and redrawn during the term of the facility.
Analysis of changes in interest-bearing loans and borrowings:
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
At the beginning of the period (605.3) (579.1) (579.1)
Net movement on revolving credit facility (83.1) – –
Repayment of private placement notes* 36.6 – –
Issue costs – 0.3 0.3
Amortisation of issue costs (0.3) (0.3) (0.6)
Net translation gain and fair value 12.5 (0.9) (25.2)
adjustment
Net movement in accrued interest (0.4) – (0.7)
At the end of the period (640.0) (580.0) (605.3)
Derivatives hedging balance sheet debt** 21.6 22.2 42.9
Debt translated at contracted rate (618.4) (557.8) (562.4)
* During the 6 months ended 31 March 2023, the Group repaid £36.6m of the 2010 private
placement notes. £7.8m was also received on maturity of derivatives hedging the 2010 Notes
and £1.0m was received in respect of the firm commitment for the 2010 Notes, resulting in
net cash outflows presented in the consolidated statement of cash flows of £27.8m.
** Represents the element of the fair value of cross-currency interest rate swaps hedging
the balance sheet value of the notes. This amount has been disclosed separately to
demonstrate the impact of foreign exchange movements which are included in interest-bearing
loans and borrowings.
11. Share capital and own shares reserve
The issued share capital is wholly comprised of ordinary shares carrying one voting right
each. The nominal value of each ordinary share is £0.20. There are no restrictions placed on
the distribution of dividends, or the return of capital on a winding up or otherwise.
The movements in the Company’s issued share capital were as follows:
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
No. of shares No. of shares No. of shares
At the beginning of the period 263,300,881 267,314,637 267,314,637
Shares issued relating to incentive schemes – 428,785 445,546
for employees
Shares cancelled pursuant to share buyback (5,015,350) – (4,459,302)
At the end of the period 258,285,531 267,743,422 263,300,881
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
At the beginning of the period 52.7 53.5 53.5
Shares issued relating to incentive schemes – – 0.1
for employees
Shares cancelled pursuant to share buyback (1.0) – (0.9)
At the end of the period 51.7 53.5 52.7
Of the issued and fully paid ordinary shares, 1,996,643 shares (30 September 2022: 720,838
shares, 31 March 2022: 99,306 shares) are own shares held by an employee benefit trust. This
equates to £399,329 (30 September 2022: £144,168, 31 March 2022: £19,861) at £0.20 par value
of each ordinary share. These shares are held for the purpose of satisfying the Group’s
share schemes.
The movements in the Company’s own shares reserve are as follows:
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
At the beginning of the period 7.2 1.5 1.5
Shares issued/purchased for share schemes 16.4 4.2 10.1
Shares used to satisfy share schemes (5.7) (4.8) (5.5)
Shares purchased pursuant to share buyback 37.4 – 37.7
Shares cancelled pursuant to share buyback (38.5) – (36.6)
At the end of the period 16.8 0.9 7.2
The own shares reserve represents shares in the Company purchased from the market and held
by an employee benefit trust to satisfy share awards under the Group’s share schemes as well
as shares purchased for cancellation as part of the share buyback programme. Shares
purchased for cancellation are included in the own shares reserve until cancellation, at
which point the consideration paid is transferred to retained earnings and the nominal value
of the shares is transferred from share capital to the capital redemption reserve.
Share buyback programme
On 23 May 2022, the Company commenced a share buyback programme (the Programme) to
repurchase ordinary shares with a market value of up to £75.0m. The purpose of the Programme
was to reduce the Company’s share capital and therefore the shares purchased pursuant to the
Programme were subsequently cancelled.
During the six months ended 31 March 2023, the Company completed the Programme, purchasing
4,862,360 ordinary shares at an average price of 768.0p per share and an aggregate cost of
£37.6m, including £0.2m of transaction costs. In aggregate under the Programme, 9,474,652
shares were repurchased at an average price of 791.6p and at a total cost of £75.5m,
including £0.5m of transaction costs.
12. Dividends paid and proposed
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
Declared and paid in the period
Dividends per share (pence) 21.2p 17.7p 25.5p
Total dividend (£m) 54.6 47.2 67.9
Proposed after the balance sheet date
Dividend per share (pence) 8.2p 7.8p 21.2
Total dividend (£m) 21.2 20.9 54.6
13. Derivatives and hedge relationships
The Group’s outstanding derivatives were as follows:
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
Consolidated balance sheet
Non-current assets: derivative financial
instruments
USD GBP cross currency fixed interest rate 14.2 15.3 31.1
swaps*
Forward currency contracts* – 0.1 0.4
Commodity contracts* 2.5 6.6 11.0
Interest rate swaps* 1.4 1.3 3.4
18.1 23.3 45.9
Current assets: derivative financial
instruments
USD GBP cross currency fixed interest rate 7.6 3.6 7.4
swaps*
USD GBP cross currency floating interest – 2.3 4.4
rate swaps***
Forward currency contracts** – – 0.5
Forward currency contracts* 0.9 0.6 3.3
Forward currency contracts – 1.5 0.2
Commodity contracts* 5.5 14.3 11.6
Commodity contracts**** 1.9 – 11.5
Interest rate swaps* 1.4 – –
Forward currency contracts 0.3 – –
17.6 22.3 38.9
Current liabilities: derivative financial
instruments
Forward currency contracts* (0.7) (1.0) –
Forward currency contracts (0.1) – (1.3)
GBP euro cross currency floating interest – (0.4) (1.0)
rate swaps**
Commodity contracts* (7.7) (0.1) (8.2)
Commodity contracts**** (0.1) – (0.7)
(8.6) (1.5) (11.2)
Non-current liabilities: derivative
financial instruments
Commodity contracts* (1.0) – (0.4)
Forward currency contracts* (0.1) – –
(1.1) – (0.4)
Total net derivative financial assets 26.0 44.1 73.2
* Instruments designated as part of a cash flow hedge relationship.
** Instruments designated as part of a net investment hedge relationship.
*** Instruments designated as part of a fair value hedge relationship.
**** Instruments for which cash flow hedge accounting has been discontinued.
The above derivatives and associated hedge relationships are described in further detail on
pages 169 to 171 of the Group’s Annual Report and Accounts 2022. At 31 March 2023, the Group
is party to a range of commodity derivatives to hedge price risk associated with aluminium
(cans), diesel (logistics), sugar, natural gas, power and paraxylene (PET plastic) and has
designated these derivatives as cash flow hedges.
Discontinued cash flow hedges
In September 2022, the Group discontinued hedge accounting for certain commodity derivatives
that were hedging purchases during the period from October 2022 to March 2023 as there is no
longer an economic relationship between the hedged item and hedging instrument because of
new commercial arrangements with suppliers. Prior to the discontinuation of hedge
accounting, the Group had accumulated a gain of £13.8m through other comprehensive income in
the hedging reserve. This gain has been reclassified to profit or loss during the six months
ended 31 March 2023 as
the hedged purchases occurred.
14. Fair value of financial instruments
The Group uses the following valuation hierarchy when measuring financial instruments at
fair value:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the
recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair
value that are not based on observable market data.
The financial instruments which the Group measures at fair value on a recurring basis
comprise the derivatives set out in note 13. All derivatives are valued based on level 2 in
the hierarchy, i.e. using valuation techniques with market observable inputs; this covers
cross-currency interest rate swaps, interest rate swaps, foreign exchange forwards, foreign
exchange swaps and commodity swaps. The most frequently applied valuation techniques include
forward pricing and swap models using present value calculations. In assessing the fair
value of derivatives, the non-performance risk of both the Group and its derivative trading
counterparties has been taken into consideration. Default credit risk has been measured and
the potential impact on derivatives valuations quantified. As at 31 March 2023, the
potential impact from non-performance risk on the fair value of the derivatives portfolio is
not material.
As in the prior year, the carrying value of financial assets and liabilities other than
derivatives (trade and other receivables, cash and cash equivalents, overdrafts,
interest-bearing loans and borrowings and trade and other payables) are considered to be
reasonable approximations of their fair values, except for fixed rate borrowings, which have
a book value of £393.2m and a fair value of £337.6m at 31 March 2023 (30 September 2022:
£442.3m book value compared to a fair value £367.1m, 31 March 2022: £420.3m book value
compared to a fair value £403.2m). The fair value of the Group’s fixed rate interest-bearing
borrowings and loans are determined by using discounted cash flow methods using discount
rates that reflect the Group’s borrowing rate as at the end of the reporting period. The own
non-performance risk as at 31 March 2023 was assessed to be insignificant.
15. Retirement benefit schemes
At 31 March 2023, Britvic plc had IAS 19 defined benefit pension surpluses in GB, ROI and NI
totalling £108.4m and an IAS 19 defined benefit pension deficit in France of £1.2m (30
September 2022: pension surpluses of £138.9m and pension deficits of £1.4m, 31 March 2022:
pension surpluses of £164.0m and pension deficits of £1.9m). The decrease in the net defined
benefit pension asset is primarily attributable to a net remeasurement loss of £39.0m, of
which £36.6m relates to the GB scheme.
The net income for defined benefit schemes recognised in the income statement for the 6
months ended 31 March 2023 was £3.2m (6 months ended 31 March 2022: net income of £0.7m).
The defined benefit section of the GB plan was closed to new members on 1 August 2002 and
closed to future accrual for active members from 1 April 2011, with new employees being
invited to join the defined contribution scheme. The Northern Ireland scheme was closed to
new members on 28 February 2006 and future accrual from 31 December 2018, and new employees
are eligible to join the defined contribution scheme. All new employees in Ireland join the
defined contribution plan.
Contributions are paid into the defined benefit section of the GB plan as determined by the
trustee, agreed by the Company and certified by an independent actuary in the schedule of
contributions. As noted in the Group’s Annual Report and Accounts 2022, no further deficit
funding payments are due to be paid except for the £5.0m annual partnership payment which
will continue until 2025. The triennial valuation as of 31 March 2022 was finalised in April
2023 and did not result in any change to the schedule of contributions (see note
20).
16. Provisions
The movement in the Group’s provisions during the 6 months ended 31 March 2023 was as
follows:
Restructuring Other Total
£m £m £m
At 1 October 2022 1.9 0.9 2.8
Provisions created during the year 0.2 0.2 0.4
Provisions utilised during the year (0.7) – (0.7)
Unused amounts reversed (0.3) (0.3) (0.6)
At 31 March 2023 1.1 0.8 1.9
Current 0.9 – 0.9
Non-current 0.2 0.8 1.0
1.1 0.8 1.9
Restructuring provisions at 31 March 2023 primarily relate to the implementation of historic
group-wide strategic restructuring and provisions related to the closure of the Group’s
Norwich site.
Other provisions at 31 March 2023 relate to certain provisions recognised on acquisition of
subsidiaries in Brazil, including regulatory and legal claims.
17. Capital commitments
At 31 March 2023, the Group has capital commitments of £26.7m (30 September 2022: £26.6m)
for the acquisition of new plant and machinery, primarily relating to new production lines
at Beckton, Rugby and Crolles (France) and also a new heat recovery system at Beckton.
18. Other reserves
The movement in the Group’s other reserves was as follows:
Capital Hedging Translation Merger
redemption reserve reserve reserve Total
reserve
£m £m £m £m £m
At 1 October 2022 0.9 27.3 (9.5) 87.3 106.0
Losses in the period in respect of cash flow – (30.4) – – (30.4)
hedges
Amounts reclassified to the income statement – (6.1) – – (6.1)
in respect of cash flow hedges
Deferred tax in respect of cash flow hedges – 7.3 – – 7.3
Exchange differences reclassified to profit or – – (0.3) – (0.3)
loss on disposal of foreign operations
Exchange differences on translation of foreign – – (3.9) – (3.9)
operations
Tax on exchange differences – – (0.2) – (0.2)
Movements included within other comprehensive – (29.2) (4.4) – (33.6)
income
Transfer of cash flow hedge reserve to – 4.1 – – 4.1
inventories
Shares cancelled pursuant to share buyback 1.0 – – – 1.0
At 31 March 2023 1.9 2.2 (13.9) 87.3 77.5
Capital Hedging Translation Merger
redemption reserve reserve reserve Total
reserve
£m £m £m £m £m
At 1 October 2021 – 4.5 (38.1) 87.3 53.7
Gains in the period in respect of cash flow – 18.5 – – 18.5
hedges
Amounts reclassified to the income statement – (2.1) – – (2.1)
in respect of cash flow hedges
Deferred tax in respect of cash flow hedges – (2.7) – – (2.7)
Exchange differences on translation of foreign – – 15.7 – 15.7
operations
Tax on exchange differences – – (0.3) – (0.3)
Movements included within other comprehensive – 13.7 15.4 – 29.1
income
Transfer of cash flow hedge reserve to – (1.5) – – (1.5)
inventories
At 31 March 2022 – 16.7 (22.7) 87.3 81.3
Capital redemption reserve
The capital redemption reserve relates to the repurchase and cancellation of shares of the
company pursuant to the share buyback programme (see note 11). Upon cancellation, the
nominal value of shares cancelled is transferred from share capital to the capital
redemption reserve.
Hedging reserve
The hedging reserve records the effective portion of movements in the fair value of
commodity swaps, forward exchange contracts, interest rate and cross-currency swaps that
have been designated as part of a cash flow hedge relationship.
Translation reserve
The translation reserve includes cumulative net exchange differences on translation into the
presentational currency of items recorded in Group entities with a non-sterling functional
currency net of amounts recognised in respect of net investment hedges.
Merger reserve
The merger reserve arose as a result of the non-pre-emptive share placement which took place
on 21 May 2010. It was executed using a structure which created a merger reserve under
Section 612-613 of the Companies Act 2006.
19. Assets held for sale
As previously reported, on 8 October 2020, contracts were exchanged for the sale of the
Britvic Norwich production site (jointly owned with Unilever). The sale of the Norwich land
and buildings (which form part of the Group’s GB operating segment) is subject to conditions
precedent, including certain planning consents being obtained by the buyer. On 1 February
2022, the Company signed a variation agreement to allow the buyer additional time to obtain
the necessary consents as certain planning processes have taken longer than initially
anticipated. Accordingly, the sale may now take up until October 2024 to complete. The
assets continue to be classified as assets held for sale under IFRS 5 as the assets
are available for sale in their present condition and the sale is highly probable. In line
with IFRS 5, assets held for sale are measured at the lower of carrying value and fair value
less costs to sell. The carrying value of the Norwich land and buildings is £16.8m (30
September 2022: £16.8m, 31 March 2022: £16.8m).
20. Events after the reporting period
GB defined benefit pension plan
In April 2023, the triennial valuation for the Group’s GB defined benefit pension plan as at
31 March 2022 was finalised. The valuation, which is prepared based on assumptions
determined by the plan’s trustee for the purpose of setting the appropriate level of future
contributions, indicated that the market value of the plan’s assets exceeded technical
provisions. Taking into consideration the results of the triennial valuation, the Company
and trustee agreed a schedule of contributions setting out the payments that the Company
will make to the plan over the period from April 2023 to March 2031. As detailed in the
Group’s Annual Report and Accounts for the year ended 30 September 2022, the plan benefits
from an interest in a pension funding partnership under which the Group contributes £5m per
annum to the plan in December of each year, up to and including December 2025. The schedule
of contributions confirms that no additional payments will be due to the plan in the period
up to 31 March 2026. Beyond 31 March 2026, an annual process to assess the funding position
has been agreed for the purpose of assessing whether any additional contributions are due.
The triennial valuation reflects that, in April 2023, an agreement in principle has been
reached between the trustee and the Company that all pension increases (excluding GMP) under
the plan should be based on the RPI measure of inflation. This is expected to result in an
amendment to the plan’s trust deed and rules to clarify that the Company does not have the
power to set an alternative rate of pension increases. The triennial valuation also reflects
revised demographic assumptions, including mortality base tables. The Company expects to
incorporate revised pension increase and demographic assumptions in its forthcoming
actuarial valuation at 30 September 2023 prepared in accordance with IAS 19 ‘Employee
Benefits’. The Company is at an early stage in quantifying the impact of the revised
assumptions on the defined benefit pension surplus recognised in the consolidated balance
sheet. Initial high-level estimates suggest that the revised RPI pension increase
assumptions would decrease the pension surplus by approximately £20m and that revised
mortality assumptions would positively impact the surplus by approximately £13m. The revised
mortality assumptions take into consideration the latest plan-specific and wider UK
population mortality experience. Further disclosure will be provided once the next IAS 19
valuation has been completed at 30 September 2023.
Continuation of share buyback
On 15 May 2023, the Board approved a second share buyback programme to repurchase ordinary
shares with a market value of up to £75.0m, to be carried out over the next 12 months. The
purpose of the programme is to reduce share capital and therefore the shares repurchased
will be subsequently cancelled.
21. Related party transactions
A full explanation of the Group’s related party relationships is provided in the Group’s
Annual Report and Accounts 2022. There are no material transactions with related parties or
changes in the related party relationships described in the last annual report that have
had, or are expected to have, a material effect on the financial performance or position of
the Group in the six month period ended 31 March 2023.
Appendix 1
NON-GAAP RECONCILIATIONS
Adjusting items
The Group excludes certain items, referred to as adjusting items, from its non-GAAP measures
because of their size, frequency and nature to allow shareholders to understand better the
elements of financial performance in the year, so as to facilitate comparison with prior
periods and to assess trends in financial performance more readily.
At March 2023 these items primarily relate to strategic restructuring and amortisation of
acquisition-related intangibles. Additionally, the expense associated with the change in
accounting policy for SaaS arrangements are considered to be adjusting items in FY22, but
form part of underlying results from 2023 onwards.
Adjusted KPIs are used to measure the underlying profitability of the Group and enable
comparison of performance against peers. They are also used in the calculation of short and
long-term reward schemes.
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
Note
£m £m £m
Implementation of SaaS accounting (a) – (3.2) (7.5)
guidance
Strategic restructuring – business (b) (0.4) (0.3) (0.5)
capability programme
Strategic restructuring –
organisational capability (c) – – 1.5
transformation
Credits in relation to the acquisition (d) – 0.2 0.3
and integration of subsidiaries
Strategic M&A activity (e) 0.1 1.2 1.0
Acquisition-related amortisation (f) (4.3) (4.3) (8.4)
Total included in operating profit (4.6) (6.4) (13.6)
Tax on adjusting items included in 0.1 0.4 1.2
profit before tax
Net adjusting items (4.5) (6.0) (12.4)
a. In FY22, a change in accounting policy was implemented in relation to customisation and
configuration costs of SaaS: due to the change in policy, these costs were presented as
adjusting items. In H1 2023 the costs have been recorded in underlying performance as
the costs now form part of normal business activity.
b. ‘Strategic restructuring – business capability programme’ relates to a restructuring of
supply chain and the operating model across the Group, initiated in 2016. Costs in the
period of £0.4m relate to the closure of the Norwich site and are primarily site running
costs. FY22 costs were of a similar nature.
c. ‘Strategic restructuring – organisational capability transformation’ in the prior period
relates to contract termination costs in relation to the closure of the Counterpoint
business. All activity is now complete and hence no costs were recorded in HY23.
d. FY22 included the release of provisions for Bela Ischia Alimentos Ltda (Bela Ischia) and
Empresa Brasileira de Bebidas e Alimentos SA (Ebba) which have been fully utilised.
e. A release of £0.1m has been recorded in HY23 relating to Strategic M&A activity, similar
to the credit of £1.2m in FY22 relating to the remeasurement of historic provisions.
f. Acquisition-related amortisation relates to the amortisation of intangibles recognised
on acquisitions in Britvic Ireland, Britvic France, Britvic Brazil, Aqua Libra Co and
Plenish.
Adjusted profit
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
Operating profit as reported 80.7 67.1 192.4
Add back adjusting items in operating profit 4.6 6.4 13.6
Adjusted EBIT 85.3 73.5 206.0
Net finance costs (11.4) (7.8) (17.3)
Adjusted profit before tax and 73.9 65.7 188.7
acquisition-related amortisation
Acquisition-related amortisation (4.3) (4.3) (8.4)
Adjusted profit before tax 69.6 61.4 180.3
Taxation (14.9) (13.4) (34.9)
Less adjusting tax credit (0.1) (0.4) (1.2)
Adjusted profit after tax 54.6 47.6 144.2
Adjusted effective tax rate 21.5% 22.4% 20.0%
Adjusted earnings per share
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
Adjusted basic earnings per share
Profit for the period attributable to equity 54.4 45.9 140.2
shareholders (£m)
Add: net impact of adjusting items (£m) 4.5 6.0 12.4
Adjusted earnings (£m) 58.9 51.9 152.6
Weighted average number of ordinary shares
in issue for basic earnings per share 258.6 267.4 266.5
(millions)
Adjusted basic earnings per share (pence) 22.8p 19.4p 57.3p
Adjusted diluted earnings per share
Adjusted earnings (£m) 58.9 51.9 152.6
Effect of dilutive potential ordinary shares 1.6 0.6 0.5
– share schemes (millions)
Weighted average number of ordinary shares
in issue for diluted earnings per share 260.2 268.0 267.0
(millions)
Adjusted diluted earnings per share (pence) 22.6p 19.4p 57.2p
Free cash flow
6 months ended 6 months ended 12 months ended
31 March 2023 31 March 2022 30 September 2022
£m £m £m
Net cash flows from operating activities 35.7 38.4 239.6
Purchases of property, plant and equipment (25.5) (21.8) (72.9)
Purchases of intangible assets (3.9) (2.8) (11.7)
Interest paid, net of derivative financial (9.3) (7.1) (14.8)
instruments
Repayment of principal portion of lease (5.0) (3.8) (9.3)
liabilities
Repayment of interest portion of lease (1.0) (0.9) (2.1)
liabilities
Free cash flow (9.0) 2.0 128.8
Adjusted net debt
31 March 2023 31 March 2022 30 September 2022
Note £m £m £m
Cash and cash equivalents* (48.0) (33.3) (97.4)
Overdrafts* 23.0 9.3 9.8
Derivatives hedging balance sheet debt 10 (21.6) (22.2) (42.9)
Interest-bearing loans and borrowings 10 640.0 580.0 605.3
Adjusted net debt 593.4 533.8 474.8
* Comparative figures for overdrafts and cash and cash equivalents have been restated as set
out in Note 2 ‘basis of preparation’.
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Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: GB00B0N8QD54
Category Code: IR
TIDM: BVIC
LEI Code: 635400L3NVMYD4BVCI53
OAM Categories: 1.2. Half yearly financial reports and audit
reports/limited reviews
Sequence No.: 243830
EQS News ID: 1633641
End of Announcement EQS News Service
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