Continued Progress by Britvic
Britvic, which is one of the leading branded soft drinks businesses in Europe, grew revenue by 1.4% at constant currency to £1.54 billion and adjusted EBIT by 4.4% to £214.1 million for the year ended 29 September 2019, marking six years of continuous adjusted EBIT growth. Adjusted EBIT margin improved by 40bps during the period but profit after tax decreased 30.9% to £80.9 million, due to adjusting items of £84.6 million including the £31.2 million write down of three French manufacturing sites that are being sold to Refresco.
Britvic increased revenue and brand contribution in both its carbonates and stills brands in Great Britain during the period. The soft drinks market in Great Britain (as measured by Nielsen) has continued to grow value at 2.3%, while volume declined 1.3%.
However, the soft drinks group faced a challenging year in France, with performance particularly disappointing in the second half of the year, as both the private label and branded business performed below expectations. Britvic is currently in discussions with Refresco over the potential sale of its three juice manufacturing sites in France, its private label juice business and the Fruité brand.
Similarly, 2019 was a more challenging year for Britvic’s Irish business, compared to a strong performance following an exceptionally hot summer in 2018.
In Brazil, Britvic has now delivered six consecutive quarters of revenue growth as the macroeconomic environment shows signs of improvement. Britvic leads the liquid concentrates segment in Brazil and continues to take share through the development of its three brands – Maguary, Dafruta and Bela Ischia.
Britvic is continuing to step change its business capability. During 2019 it completed its Great Britain capability programme, which has transformed the supply chain infrastructure over the last three years. Over this time, Britvic has installed ten new production lines and three new on-site warehouses. The group has also invested in its supply chain footprint to provide space for further expansion, and standardised the production processes across the sites, to help drive consistency and operational efficiency. During September 2019, the Norwich site closed, as Britvic consolidated production at Rugby, London and Leeds. The programme is delivering benefits ahead of previous guidance, with the final cost savings due to be realised in 2020.
Simon Litherland, chief executive of Britvic, comments: “I am pleased to report that Britvic has once again delivered a strong performance, with good momentum in our key brands and categories. In 2019 we have increased revenue, adjusted margin and EBIT, as well as significantly improving free cashflow generation. Our commercial execution, innovation agenda and revenue management continue to deliver results. Our transformational business capability programme is now complete – and importantly forms a key part of our broader commitment to building a more flexible and sustainable business model going forward.”
He adds: “Building on this strong platform, I am confident that Britvic is well placed to capitalise on the future growth opportunities in the years ahead. While we anticipate conditions to remain challenging, we fully expect that we will make further progress in 2020.”
