AG Barr Plc Non-alcoholic Beverages Article 2022

AG Barr Plc
- A manufacturer, distributor and marketer of non-alcoholic beverages
- Comprises a wide range of carbonated drinks, juices, still drinks, energy drinks and packaged
water
- Three reportable segments: Carbonates; Still Drinks and Water; and Other
- Manufactures and markets soft drinks
- portfolio comprises carbonated soft drinks, fruit drinks, juices, energy drinks and cocktails
- also offers packaged water, sugar free flavored water and sugar free squashes
- Brand Names: IRN-BRU, Barr Originals, KA, D&B, St. Clements, Simply, Sun Exotica, Rubicon,
Strathmore, St Clements Sparkling, Snapple, Rockstar, Primer Spremitura, Le Joli, Big Wille,
Bundaberg and Tizer
- various third-party brands including Rockstar and Snapple, through partnerships.
- Distributes Rockstar energy drinks in the UK and Ireland / Snapple fruit juices and iced teas in
the UK and EU territories
- Is headquartered in Cumbernauld, North Lanarkshire, the UK.
Revenues, Operating Margin and Net Margin
- Rvenues of (British Pounds) GBP255.7 million for the fiscal year ended January 2020 (FY2020), a
decrease of 8.4% over FY2019
- In FY2020, the company’s operating margin was 14.9%, compared to an operating margin of
16.2% in FY2019.
- In FY2020, the company recorded a net margin of 11.7%, compared to a net margin of 12.8% in
FY2019

Investor Area
We are a UK based branded multi beverage business focused on growth and creating long-term
shareholder value
○ Long established business (140+ years)
○ Conventionally governed, listed in 1965
○ Ambitious and value driven with strong consumer focus
○ UK-wide with significant growth potential
- Building a differentiated portfolio of great tasting soft drinks brands that people love
- Democratising cocktails with an unrelenting desire to make great tasting cocktails available to all
Strategic Priorities
Our overarching purpose is to create value, with values - for our shareholders, consumers, customers and
for society as a whole
o Connecting with consumers Consumer insight drives our business. Consumers’ needs and
preferences are changing and we ensure that we take the time to listen, to understand them
and to offer everyone a choice of great tasting, high quality products
o Building trust Building and maintaining long-lasting trust and successful relationships is central
to our business and always has been. Our responsible behaviour over the last 140 years has
created a firm foundation, but one we want to build upon further. Being a trusted business that
acts with integrity is fundamental to our stakeholder relationships - from our consumers and
customers to our suppliers and communities. Equally, as the world around us changes, with
climate change in particular becoming increasingly more pressing, our strategic choices are
more than ever informed and supported by our desire to do the right thing and to play our part
in addressing the key issues facing society.
o Building brands We are brand owners and builders, offering a diverse and differentiated
portfolio of products that people love. With our own powerful brands, complementary franchise
partner brands and a strong track record of bringing successful innovation to market, we seek to
build brand awareness, equity and product distribution such that we outperform the market.
o Driving efficiency We continually strive for greater efficiency across our business, investing for
growth while also ensuring strong financial controls are in place. As our business develops, we
are committed to driving continuous improvement across our processes and technology. As an

asset backed business we drive operational improvements, flexibility and efficiency through our
expansionary capital investment programme, equipping us with some of the industry’s most
advanced operational capability.
Investment Case
o Ambitious with clear and consistent value driven strategy
o Brand owner and builder with differentiated portfolio
o Strong customer and consumer focus
o Asset-backed, simple and effective business model
o Disciplined capital allocation
o Growth potential within key markets
o A responsible business
o Long-term strong financial performance
Ambitious with clear and consistent value driven strategy
1. Successful selection and integration of acquisitions
 Acquisition -----Strathmore ------Consolidation of manufacturing operations
 Acquisition ----- Rubicon
2. Business Process Redesign implementation (new ERP system)
3. RTM development and manufacturing investment
4. Organisational capability development------ Britvic merger discussions
5. Supply Chain investment & rationalisation
6. Business re-org & Cumbernauld manufacturing investment
7. MK manufacturing investment
8. Margin Development
9. Minority investment in zero proof spirits brand STRYKK
10. Business re-engineering programme ------------------Currently 2019 and 2020
Brand owner and builder with differentiated portfolio

 National core brands complemented by regional brands with well established consumer
strongholds across the UK ○ Portfolio developing through brand extension, flavour development
and innovation
 c.98% of portfolio now lower or no sugar - exempt from UK Soft Drinks Industry Levy
 Opportunities to grow further through increased geographical and channel distribution points
1. Well established strong core brands in the UK such as IRN-BRU, RUBICON, FUNKIN, BARR,
STRATHMORE
2. Complementary long-term partnership brands such as SAN BENEDETTO, BUNDABERG, SNAPPLE
Strong customer and consumer focus
1. Understanding consumers’ attitudes and behaviours to drive category strategy and consumer
and trade engagement programmes
2. Broad-based consumer and trade engagement programmes such as ……..
3. Well balanced market coverage meeting consumers’ needs across a range of drinking occasions
Asset-backed, simple and effective business model
An approach that delivers sustainable growth, in an expandable category and maximises available
margins
Disciplined capital allocation
1. Partnerships and acquisition
○ Value driven, growth orientated and ambitious M&A track record and approach
○ Strong balance sheet provides optionality
○ Well funded business with supportive bank syndicate
2. Funkin Case Study
Growth potential within key markets
1. Soft drink --- Barr Soft Drink

2. Cocktails ---- Cocktails providing significant growth opportunities for both the GB on trade and
take-home markets
3. Emerging sectors --- Minority investment in Elegantly Spirited Limited (ESL) and consumer
perspective
4. Digital ------- consumers will continue to shop online after COVID and Significant opportunities to
leverage consumer digital dynamics
A Responsible Business
1. We act with integrity
Safety & well-being
Employee engagement
Responsible policies and practices
Long-term goals- Zero work related accidents 2022 : 80% employee engagement
2. We respect the environment
Carbon reduction
Packaging Waste & water
Sustainable sourcing
Long-term goals -Never again send non hazardous waste to landfill
2022 : IRN-BRU and Rubicon in 100% recycled PET
2023 : Full portfolio in 100% recycled PET
2025 : 15% Improvement in water usage efficiency (baseline 2015) 40% Reduction in greenhouse gas
emissions (baseline 2015)
3. We support healthy living
Calorie reduction
Responsible advertising & marketing

Labelling Inspiring active lifestyles
Long-term goals - To continue to advertise responsibly, offer a wide range of pack sizes to assist with
portion control and, by providing clear nutritional information on all of our products, enable our
consumers to make informed choices
4. We give back
Community engagement
Charity partnership
Employee volunteering
Long-term goals -To support our corporate charity partnership with Mental Health UK improving the
lives of those with mental health challenges by donating £150,000 over 3 years and raising awareness
across our own teams
No Time To Waste environmental sustainability programme ------ Ambition to be net zero by 2040
Long-term strong financial performance
 Long-term operating margin improvement
Tables and charts are provided in Investors Presentation file
2020 Annual Report
Our Business

- established over 140 years ago in Scotland and now operating across the UK and internationally,
we strive to grow our business both organically and through partnerships and acquisition.
- operate long-term partnerships
- 860 employees, 16 brands, 9 UK sites
- Whether it’s the iconic IRN-BRU, launched in 1901 and still going strong today, our vibrant
RUBICON fruit and juice drinks,
or our unique range of BARR flavours
- our brands offer people a choice of great tasting products and bring exciting innovation to the
market.
- offering a diverse and differentiated portfolio of products that people love.
CHAIRMAN’S INTRODUCTION
- Has continued to support the executive team and the wider business to navigate through this
extraordinary period
- The variable and fast-moving impacts of the COVID-19 pandemic have led to a volatile and
unpredictable 12 months.
- A.G. Barr delivered a resilient financial performance, with revenue of £227.0m (2019/20:
£255.7m)
- Both our Barr Soft Drinks and Funkin businesses felt the effects due to Covid pandemic; The
severity of the impact on our business lessened as the year progressed
- Our flexibility, alongside the resilience of our business model and the strength of our brands,
were key to delivering a robust performance in these testing times
- The considerable management actions to protect our financial stability the business ended the
year with an even stronger balance sheet than this time last year.
- In April 2020, given the unprecedented circumstances arising from COVID-19, we communicated
our decision to temporarily suspend dividend payments. However, we remain committed to our
plan to recommence dividend payments during the course of this financial year ending January
2022
- The Board remains confident in our value driven strategy
Our Business Model
Our business model is simple, effective and profitable
We Make:
- pride ourselves on our effective and safe manufacturing capabilities, producing high quality
products across our well-invested and efficient production sites.

- From sourcing our raw materials to designing our packaging, we aim to reduce our
environmental impact while delivering continuous improvement across our supply chain.
We Move:
- long-standing relationships with our key distribution partners
- Deliver great service to all our customers, from the biggest food service customer to the
smallest local shop
- Operating across multiple routes to market, we have a well established and efficient distribution
network, with our Barr Direct channel
- Offering a tailored and personal direct to store service to thousands of independent retailers
across the UK
We Market:
- Listening carefully to our consumers is paramount
- Have developed a diverse and differentiated brand portfolio of great tasting products to satisfy
their needs and offer choice
- And when it comes to marketing, innovating and building our brands we like to have some fun,
appealing to our broad range of consumers, whether that’s through TV campaigns, digital and
social media, sponsorship or supporting local community events
We Sell
- Building long-lasting relationships with our customers across all our key markets is fundamental
to our business.
- Grocer, a wholesaler, a regional restaurant group or a local independent retailer
- Work collaboratively with all customers to understand their businesses and find winning
consumer propositions in a practical and profitable way
- 96.5% Revenues generated in the UK
We behave responsibly:
- works to minimise our environmental impact and gives something back to the communities we
serve
- Years of Responsible actions: 140+
We create value with values:
Continues to create and deliver value, with values, to a wide range of stakeholders.
Shareholders - re-invested in long-term business growth through both annual capital expenditure of
£7.1m and a further £1m
Suppliers and customers - directly contracted with more than 70 suppliers with an annual spend of over
£100m while working closely with thousands of customers to co-create joint business plans.

Employees - 860 employees across the UK at the year end, £38.9m was paid in salaries and wages
UK economy and communities - With 96.5% of our revenue generated in the UK, and through our
£10.3m corporation tax and £4.5m national insurance payments to the government
-we continue to play our part in growing the UK economy while also donating the equivalent of over
£140k to 150 good causes across our communitie
As strategies priorities,
1. Connecting with customers
2. Building Brands
3. Driving Efficiency
4. Building Trust
Key Performance Indicators
Chief Executive Review
Our key financial metrics for the year were as follows:
– Group revenue £227.0m (2020: £255.7m)

– Profit before tax and exceptional items* £32.8m (2020: £37.4m)
– Profit before tax and after exceptional items £26.0m (2020: £37.4m)
– Operating margin before exceptional items* 14.8% (2020: 14.9%)
– Strong balance sheet with net cash at bank* of £50.0m
In Covid 19.
Focused on 3 key areas,
1. Puttingourpeopleandsafetyfirst
2. Supporting Group operating resilience
3. nsuring our financial security and stability
Soft Drink Market
- The 2020 soft drinks market was characterised by the migration
of out of home consumer demand into the home environment
- Hospitality sector
- grocery multiple channel
- some positive spill-over for soft drinks purchasing into online and neighbourhood convenience stores
- The switch of consumer purchase habits and the data read in take home will reflect reality but will not
reflect the impact of reduced consumption in the less measured but materially impacted channels
Cocktail Market
- cocktail consumption at home has risen dramatically.
- The Funkin brand capitalised on this increase in demand with its range of premium ready to drink (RTD)
cocktails and is now the UK’s No.1 RTD cocktail brand and a Top 5 RTD grocery brand, leading the growth
of the RTD category.
Strategy Execution
- continued to invest for growth and made progress in some key strategic focus areas such as
environmental sustainability, digital development and our increasing drive towards a multi-beverage
operating model.
OUR STRATEGY IN ACTION
1. Finding better ways
With representation from all parts of our business, our value optimisation programme is
creating and delivering a continuous pipeline of product optimisation actions
2. Rubicon – The Unboring Choice

With a totally new positioning and fresh new design, Rubicon encourages consumers to make the “unboring
choice”, supported in 2020 by a broad consumer engagement programme across TV, digital and social media,
out of home advertising and shopper communications
3. IRN-BRU – Gets You Through
As part of its “Gets You Through” campaign across the summer of 2020, IRN-BRU invited fans to create and
star in their own TV adverts, providing a lockdown lift. Superfans of all ages submitted some incredibly
inventive and entertaining entries. The five winning videos featured in a special IRN-BRU TV ad-break takeover
on STV in July, showcasing the creativity and humour of our amazing IRN-BRU fans.
4. FUNKIN – Best served everywhere
Not only did our Funkin brand confirm its position as the UK’s No. 1 ready to drink
cocktail brand in 2020 but it also made its first ever TV appearance, with an exciting
advertising campaign supporting the launch of our great tasting ready to drink cocktails.
5. IRN-BRU Energy for the real stuff
IRN-BRU Energy combines the iconic flavour of IRN-BRU’s top secret essence with
taurine, caffeine and B vitamins, and comes in sugar and no sugar variants.
6. Capitalising on our investment
Our £14m capital investment in a new liquid processing facility at our Cumbernauld site has delivered a wide
range of efficiency improvements including greater automation, faster processing, waste reduction and
increased product yields. It’s also keeping our employees safe, through reduced manual handling and an
improved working environment for our process team
7. Playing our part
The UK’s frontline workers have been heroic during the COVID-19 pandemic and we’re not alone in being
incredibly grateful to them all. We have tried to play a small part in supporting them, and our wider
communities, by donating over 500,000 drinks and lifting spirits in a time of crisis. We also donated 40,000
empty bottles and caps to local distilleries for production of hand sanitiser at the start of the pandemic.
8. NO Time To Waste (Their Main Sustainability program)
- It’s a long-term vision and an ongoing commitment, but we have the bottle, and there’s no time to waste.
- Towards a circular economy and net zero. No time to waste increasing our sustainable packaging
- we now have 100% renewable electricity at all our sites, 100% of our soft drinks packaging is recyclable
and 100% of our non hazardous waste is now diverted from landfill.
- by early 2022 and all our plastic bottles will be in 100% rPET by the end of 2023. We’re also one of the first
businesses to introduce 100% recyclable packaging film made from 100% recycled content, which will be
on all consumer multipacks by the end of 2021.
Key Sustainability Commitment

Non-Financial KPIs
Financial Review
Overview
- Trading was nonetheless disrupted, particularly in the hospitality and ‘out of home’ channels.
- This resulted in an 11.2% reduction in reported net sales, down £28.7m to £227.0m, and a 12.3%
reduction in profit before tax and exceptional items, down £4.6m at £32.8m.

- The termination of the Rockstar franchise required prompt and decisive action to reduce costs and to right-
size our operations, while ensuring we maintained appropriate capacity for growth
- We re-focused our marketing on the channels where spend remained effective and pivoted our resources
to those routes to market that remained open.
- Entered the pandemic with strong financial fundamentals, a well-maintained asset base and significant net
cash.
- At £50.7m (2019/20 : £40.1m) net cash generated from operating activities continued to be strong
throughout 2020/21, reflecting the prompt action taken. Disciplined cash management, combined with
capital programme deferrals and dividend suspension, resulted in the Group closing the financial year with
net cash at bank* of £50.0m.
- We are a well invested asset-backed business with strong brands and varied, but balanced, routes to
market. We are intending to emerge from the pandemic as a simpler, more resilient and agile business
with a clear path to value-creating growth
Carbonated Soft Drinks
- represents over 81% of our revenue and over 87% of gross profit.
- reported revenue decline of 6.2% in this segment is a creditable performance in a year clearly impacted by
COVID-19 as well as the loss of the Rockstar franchise from 1 November 2020.
- The IRN-BRU brand reported net revenue down 9.7%, with a decline in out of home sales partially offset by
growth in the take home category. Recognising the importance of focusing on core trading activities, we
chose not to launch any new brand innovation in the year, however recent innovations – IRN-BRU Energy
and IRN-BRU XTRA – continued to deliver revenue growth.
- Barr Flavours continued to grow, up 3.3%, on the back of sustained distribution gains, largely in England,
despite the headwinds of the pandemic. The brand has built a strong position as a great tasting value
brand in symbols and independent stores, a sector that has held up relatively well during lockdown
restrictions
- Our carbonated Rubicon drinks (Rubicon Spring and Rubicon Sparkling) represent over 2/3rds of the
Rubicon range. These brands, particularly Rubicon Spring, are predominately ‘out of home’ focused and
while they performed strongly outside of lockdown (pre COVID-19 and late summer) they were
disproportionately impacted when restrictions were in place. Rubicon Spring net revenue was down 8.1%
while Rubicon Sparkling revenues were flat year on year.
- Overall, our carbonates pricing has been sustained and strong cost management activity has mitigated the
impact of lower volumes on our largely fixed cost base. However, the combination of stronger than
average growth by Barr Flavours and the switch from ‘out of home’ formats to multi-packs and larger ‘at
home’ formats, has resulted in a modest margin dilution on gross margin.
Stills and Waters
- Segmental net revenue declined 36% driven by a 43.3% fall in volume, a direct reflection of the impact of
pandemic restrictions on the brands in this segment.
- key promotional activities during Ramadan (April/May 2020), resulted in Rubicon Stills revenue being down
18.2% versus the prior year
- The other still brands in this segment, KA, Simply Fruity and Snapple, were also exposed to the ‘out of
home’ trading challenges leading to year on year declines.
- Strathmore brand with sales down 80-90% during lockdown periods
- Can take immediate and significant remedial action to reduce costs, the extent of the sales reduction
during lockdowns and the largely fixed cost nature of the single plant Strathmore operation had a material
impact
on gross profit.
- Implemented a full review of the Strathmore business during Summer 2020. The results of this review
necessitated the impairment of the brand value and a reduction to a more efficient single shift
manufacturing operation.
These actions, and the beneficial impact of brand mix, resulted in a gross margin improvement for
the stills and water segment as a whole.

Funkin
- Entered the financial year as an on-trade focused brand with a track record of sustained, often double
digit, growth
- pivoted Funkin’s focus towards branded ready to drink cocktails in the take home channels
- While total sales across the year were down 11.5%, and gross profits fell 31.5%, the underlying
performance of the take home channel, currently representing c.50% of the business, was very strong.
Exceptional Items
- Four items considered to be non-recurring and exceptional in nature. The net P&L charge (pre-tax) of these
items was £6.8m.
- Restructuring costs, product development or asset write offs
1. Strathmore brand and asset impairment (£10.0m P&L charge). Strathmore is a highly regarded premium
brand in a structurallylow margin bottled water category. The brand is predominantly targeted on the
hospitality sector which continues to be significantly challenged by lockdown measures. A review of the
outlook for both the brand and the sector highlighted an impairment requirement which has resulted in a
write-down of the Strathmore brand (£7.0m), goodwill (£1.9m) and tangible fixed assets (£1.1m)
2. Funkin goodwill (£1.3m non cash P&L charge). A charge to the income statement relating to acquisition
goodwill
3. Business re-engineering programme (£3.1m P&L charge). In September 2019 the Group embarked on a 2
year change programme. Phase 1, which delivered a number of portfolio simplification actions alongside
an initial reorganisation and refocusing of our Commercial teams, completed on time and to budget during
the first half of 2020/21. Following the announcement of the termination of the Rockstar agreement, we
reviewed and updated our Phase 2 plans, also taking into account pandemic related changes in operations.
Phase 2 regrettably led to further right-sizing decisions which resulted in a number of redundancies across
the business, including both our Strathmore production and Funkin teams where COVID-19 has had the
greatest impact. The programme is now complete
4. Rockstar compensation (£7.6m P&L credit). The early termination of the Rockstar franchise entitled the
Group to a one-off contractual termination payment.
Interest
Net finance charges, totalling £0.7m, comprise the interest relating to the drawdown of the revolving credit facilities
between March and September 2020, lease interest costs under IFRS 16 and notional finance costs associated with
the defined benefit pension deficit under IAS 19.
Taxation
Our reported tax expense of £6.9m (2019/20: £7.6m) represents an effective tax rate of 26.8% (2019/20: 20.3%).
This is higher than the UK statutory rate of 19.0% and higher than the prior year primarily due a one-off revaluation
of deferred tax balances following the government decision to reverse the planned reduction in UK corporation tax
rate from 19% to 17% and a non deductible element within exceptionals. These have been partially offset by an
over-provision of prior year tax charges.
Earnings per share (EPS)
Basic EPS, before exceptionals, was 22.31p (2019/20: 26.50p), a decrease of 15.8%, based on a basic weighted
average of 111,171,047 shares (2019/20: 112,452,517), reflecting the impact of the challenging trading
environment and the increased tax charge following the revaluation of deferred tax. Basic EPS post exceptionals
was 17.18p (2019/20:26.50p), a decrease of 35.2%. Based on a diluted weighted average of 111,312,006 shares,
diluted EPS was 17.16p (2019/20: 26.49p).
Dividends
The Group took the opportunity to review the dividend distribution strategy with the aim of creating a progressive
and sustainable dividend policy that has regard to current performance trends including sales, profit after tax and
cash, and satisfies certain guiding principles:

 – Dividend cover: targeting 2 times cover
 – Payout ratio: targeting 50% of free cash flow
 – Consistent with medium-term profit outlook
Investment in associate – Elegantly Spirited Limited (STRYKK brand)
In June 2019, the Group made a 20% minority equity investment in Elegantly Spirited Limited (ESL), a business
start-up in the emerging zero proof spirits market, and the owner of the STRYKK brand, a range of zero proof spirits
products.
Financial Risk Management
The process is based on a balance of risk and reward, determined through assessment of the likelihood and impact
of the risk and within the context of the Group’s risk appetite as established by the Board.
European Union withdrawal
As a result of actions undertaken by the working group, the business did not experience any significant disruption
during or in the immediate aftermath after the end to the transition period on 31 December 2020. As the majority
of the Group’s production and trading is domestically focused, we anticipate only a modest financial impact under
the new EU/UK trade arrangements resulting from tariffs on a small group of raw materials and finished goods. We
continue to believe that the Group’s overall risk remains largely around these tariffs, the potential for short-term
foreign exchange volatility and possible temporary logistic disruption. These risks are considered manageable and
the withdrawal from the EU is not considered to be a principal risk. Medium-term supply disruption risk is being
managed through a targeted increase in inventories, close coordination with our logistics partners and continued
monitoring of the cross border environment. Foreign exchange requirements are not significant and exposure to
exchange rate volatility is mitigated by our currency hedging programme.
Treasury and commodity risk management
- Seeks to mitigate risks in relation to the continuity of supply of key raw materials and ingredients by
developing strong commercial relationships with its key suppliers. The Group manages commodity pricing
risk actively and where commercially appropriate, will enter into fixed price supply contracts with suppliers
to improve certainty. We have not directly entered into commodity hedge contracts.
- Enters into insurance arrangements to cover certain insurable risks where external insurance is considered
by management to be an economic means of mitigating these risks.
Accounting Policies
No changes applied in this year.
Pensions
- Operate two pension plans – the A.G. BARR p.l.c. (2005) Defined Contribution Pension Scheme and the A.G.
BARR p.l.c. (2008) Pension and Life Assurance Scheme. The latter is a defined benefit scheme based on
final salary, which also includes a defined contribution section for pension provision to senior managers.
- as part of the Group’s ongoing strategic risk management.
2021 Interim Report
Interim Statement
- Positive first half performance reflects these fundamentals as well as the encouraging
performance of recent innovation launches in both soft drinks and cocktails.
- This strong performance reflects positive underlying volume momentum as well as a number of benefits
specific to the circumstances in the first half of this year. While it is difficult to be precise, it is estimated

that in operating profit terms the impact of the benefit in the first half, which will not repeat in the second
half, equates to c.£5m.
Business Performance
Trading has been strong across both our business units, Barr Soft Drinks and Funkin. This performance has been
driven by
a combination of brand-led initiatives and market factors, some long-term and structural and others more one-off,
resulting in an unusually high profit performance in the first half.
Balance Sheet and Cash flow
- remains robust and in a cash positive position with £50m net cash at bank* as of 24 January 2021.
- provides the Group with financial resilience and the flexibility to pursue our strategic objectives as we exit
the crisis. We entered the pandemic with a strong balance sheet and significant liquidity and we exit the
year in a stronger financial position.
- continued to apply a disciplined approach to cash management
-
-

2021 Interim Report
“We are pleased to report a strong performance in the first half of our 2021/22 financial year reflecting
the underlying strength of the business alongside the encouraging performance of recent innovation
launches in both soft drinks and cocktails.”
Roger White, CEO (September 2021 Interim Results)
AG Barr is a growth-focused business operating in resilient and growing market categories, with dynamic
brands, great people and a strong financial position. Our positive first half performance reflects these
fundamentals as well as the encouraging performance of recent innovation launches in both soft drinks
and cocktails. We remain on track to deliver strong full year profit performance, slightly ahead of our
2019/20 pre-COVID level.
Interim Statement
Britvic Plc
- A producer and supplier of still and carbonated soft drinks
- Markets its products under Robinsons, J20, Fruit Shoot, MiWadi, Club, Teisseire, Ballygowan,
and Teisseire Fruit Shoot brands

- Exports products to over 50 countries
- Its business units into six reportable segments: GB stills (United Kingdom excluding Northern
Ireland), GB carbs (United Kingdom excluding Northern Ireland), Ireland (Republic of Ireland and
Northern Ireland), France, Brazil and International
- A manufacturer and wholesaler of soft drinks
- The company’s product portfolio comprises energy drinks, mineral water, carbonates, syrups,
juice, squash and sparkling soda
- Brands Name: Robinsons, Gatorade, Tango, J2O, MiWadi, Drench, Ballygowan, Pressade, Fruit
Shoot, Cidona, Teisseire, Fruite, Club and TK
- Through its licensing agreements with PepsiCo, Britvic also produces and sells soft drink brands,
such as Pepsi MAX, 7UP, SoBe, and Mountain Dew
- Has business presence in Ireland, the UK, France, the US, the Netherlands, Singapore and Brazil
- Headquartered in Hemel Hempstead, Hertfordshire, the UK
Annual Report 2021
Britvic is a purpose-driven organisation
with a clear vision and a clear set of values.
o be the most dynamic soft drinks company, creating a better tomorrow
With a portfolio of market-leading brands, a strong multi-channel route to market and collaborative customer
relationships in all our geographies, we believe we are well-placed to continue to deliver excellent returns to
shareholders and our other stakeholders.
6.6%
Underlying revenue growth.
Our future focus remains on four key strategic priorities:

— Build local favourites and global premium brands
So our focus on developing and growing healthier soft drinks has been pivotal to our success and our portfolio of
low and no calorie family favourite brands and better for you innovation have continued to resonate strongly.
— Flavour billions of water occasions
More recently we have launched new flavours to broaden appeal and announced new ranges for 2022, with added
functional benefits such as vitamins, to build on our leadership in healthy hydratio
We have continued to innovate across our markets with new liquids and types of packaging, to ensure we bring
excitement and develop opportunities to grow the category though our leadership
— Healthier People, Healthier Planet
We have also made strong progress this year on Healthier Planet. As we work to minimise the impact
of our packaging on the planet, the rollout of recycled PET across our Great Britain and Ireland portfolios is now up
to 30%. We have leading brands such as Fruit Shoot and Ballygowan and all our immediate consumption packs in
100% rPET.
— Access new growth spaces
Across the core portfolio, we have launched new flavours to broaden appeal to both new
and existing consumers, including Pepsi MAX Lime and Tango Dark Berry. We have launched new offerings to
expand our health and wellbeing leadership, including the relaunch of our natural energy brand, Purdey’s, and we
have leveraged our dispense leadership to offer new experiences and access new occasions with the rollout of
London Essence Tonic on Tap and Aqua Libra Co expansion beyond workplace into leisure and retail.
With the acquisition of Plenish, we now play in the high growth plant-based drinks category.
We are on track with the integration and we have made good progress, leveraging our strong customer
relationships to gain new listings in the UK and Europe, and using our group innovation and brand development
capability to support a brand relaunch next year.
With the extension of the PepsiCo agreement in 2020, we took on the Rockstar brand, in the scale energy category.
During the year we have worked with PepsiCo to bring to market a new, higher
priced Rockstar proposition, with a new pack design and new liquids, some with added health benefits, and
supported by a new marketing platform based around gaming. These innovations and entries into new categories
offer Britvic significant growth opportunities as we scale these brands in the years ahead.
In Brazil, we have continued to expand our category presence, nurturing, and scaling recent launches such as Puro
Coco, Seleçã o, Natural Tea and the Nuts brands. In addition, while still a small part of the business, we are trialling
some of our group brands, including Pressade organic juice, Britvic mixers and Mathieu Teisseire syrups to establish
a presence in premium categories that have long-term potential.
Underpinning this strategy are three critical enablers:
— Generate fuel for growth through efficiency
This year we are implementing new commercial systems to enhance our revenue growth management and
customer relationship management capability
— Transform organisational capability and culture
We are using some of our learnings from the pandemic to enable our people to work together in simple, focused,
and agile ways. We are using technology to ensure connected collaborative working everywhere, and we are
refreshing our office environments as part of our global hybrid working programme, Working Well. We continue to
invest in wellbeing programmes in each of our markets through myLife, and our active diversity and inclusion

employee networks are flourishing. We are also supporting our people’s development through a significant
expansion in our online training library, embracing e-learning on a global scale.
We are developing a centre of excellence for consumer experience which is focused on enhancing
our digital marketing capability. We are integrating the end-to-end consumer experience of our brands with
interactive communications across social media, while also developing an in-house digital studio to create
marketing content.
— Selective mergers and acquisitions (M&A) to accelerate growth
New 20-year agreement with PepsiCo and the launch of Rockstar
This financial year marked a new 20-year agreement between Britvic and PepsiCo with the exclusive franchise
bottling agreement for the production, distribution, marketing and sales of PepsiCo’s carbonated soft drinks
brands including Pepsi MAX, 7UP and Lipton Ice Tea. This new agreement extends the relationship which
started in 1987 to 2040.
It also allows Britvic to broaden the portfolio by adding Rockstar Energy to the lineup, increasing our
participation in the large and growing energy category. The international relaunch of Rockstar in July this year
featured 13 flavors in Great Britain.
£27 million investment in Rugby canning line
In September 2021, Britvic announced a £26.9m investment in its largest production site – adding a fourth
canning line at the Rugby factory. The new line increases the site’s total capacity by a further 18% and creates
at least 20 new jobs.
The efficient new set-up will produce recyclable 330ml cans for leading brands including Tango, Pepsi MAX
and 7UP. The first cans were produced in November and the new line will be fully operational in early 2022.
This latest announcement underscores Britvic’s continued commitment to investing in its supply chain and
follows the completion of the transformative business capability programme, improving facilities for the
benefit of colleagues and customers.
Plenish
Britvic’s acquisition of Plenish in May 2021 signalled our entry into the fast-growing plant-powered
drinks market. We know consumers are increasingly favouring plant- based alternatives, not only for
their own health but also for a healthier planet. In the UK, there are over nine million dairy alternative
households and plant-based milks are forecast to top £500m by 2024.
With the plant-based category soaring in both relevance and size, Plenish gives Britvic an excellent
platform in this exciting growth market. It fulfils our strategy of building a portfolio of soft drink brands
for every consumer occasion, delivers on our commitment to access new spaces in the soft drinks
category and strengthens our Healthier People, Healthier Planet sustainability agenda.
Healthier People, Healthier Planet
Our Healthier People, Healthier Planet sustainable business programme

Investment Case
A portfolio of market leading brands
In Great Britain and Ireland, we have a full portfolio of family favourites, both owned and as the bottler
for PepsiCo. In France and Brazil, the portfolios are all owned brands in a smaller number of categories.
In each market we are the leading supplier of flavour concentrates, underpinning our strategic pillar of
flavouring billions of water occasions.
A well-invested infrastructure
The completion of our business capability programme in 2019 in Great Britain means we have a fantastic
supply chain platform to enable us to lead market growth. In our other markets we continue to invest in
the supply chain to support growth, efficiency and our sustainability targets. Beyond supply chain we are
investing in both our digital capability and IT infrastructure to ensure that the business is future fit to
realise our growth ambitions.
A long-term agreement with PepsiCo
In October 2020, we signed a new and exclusive 20-year franchise bottling agreement for the
production, distribution, marketing and sales of its soft drink brands in Great Britain. Our PepsiCo
relationship provides access to a portfolio of global brands, including Pepsi MAX, 7UP, Lipton Ice Tea
and, more recently, Rockstar Energy. This follows a similar 10-year agreement signed in 2016 with
PepsiCo in Ireland.
A sustainable business
Britvic’s Healthier People, Healthier Planet sustainability ethos underpins every element of our business
strategy to ensure that we deliver sustainable value for all our stakeholders, and we create a better
tomorrow. This year, we developed five interactive training modules for Britvic colleagues to learn more
about our Healthier People, Healthier Planet strategy.
A well-financed and cash generative business
Britvic has a strong financing platform, with a £400m sustainability- linked multi-bank revolving credit
facility and a series of private placement notes in place. The business is cash generative and has a clear
capital allocation policy, including a commitment to a dividend policy that pays out 50% of profits.
A track record of growth
Since the appointment of Simon Litherland in 2013, we have consistently delivered excellent returns for
shareholders. While the COVID-19 pandemic interrupted progress in 2020, we have continued to
generate total shareholder returns significantly ahead of the FTSE 250.
A resilient and growing category

Soft drinks are a consumer staple, meaning category performance is consistent, stable and projected to
grow. Growth is achievable through increasing consumption by innovating to meet emerging consumer
needs, accessing new spaces and premiumisation.
An engaged and agile workforce set up for success
We’re building a working environment where everyone belongs. This year we launched Working Well –
our new dynamic ways of working. We have repurposed
our work spaces to increase interactions, collaboration and opportunities for innovation with
performance based on output rather than hours spent.
Britvic is a leading supplier of soft drinks with a broad portfolio of market leading
brands.
Coca Cola Plc
We’re a leader in a soft drinks category that is worth nearly €100 billion, with brands that
are so popular and so widely consumed that we serve millions of people, businesses and
communities in our markets every
day. Our category is robust, resilient and set to keep growing in the long term. Our goal is
to outperform the market – growing faster and building share.
- Coca-Cola European Partners Plc (CCEP)
- markets and distributes ready-to- drink (RTD) beverages in 13 countries serving across 300
million consumers
- Nine geographic segments: Iberia, Germany, Great Britain, France, Belgium/Luxembourg, the
Netherlands, Norway, Sweden and Iceland
- An independent Coca-Cola bottling company
- It sources concentrates, beverage bases and syrups from The Coca-Cola Company (TCCC)
- Produces and distributes various packaged beverages to customers
- Vending partners who in turn sell these products to consumers

- Consist of non-alcoholic ready-to-drink (NARTD) beverages, bottled and canned soft drinks
juices, isotonic and carbonated waters
- Under various owned and licensed brands such as Glaceau, Fanta, Sprite, Powerade, Nestea,
Coca-Cola and Schweppes, for a few
- Has operations in Andorra, Belgium, France, Germany, Great Britain, Iceland, Luxembourg,
Monaco, the Netherlands, Norway, Portugal, Spain and Sweden.
- Headquartered at Uxbridge, England, the UK
Annual Report
For describing in Appendix ------- Our business
CCEP is the world’s largest independent Coca-Cola bottler by revenue, operating in 13 countries in
Western Europe and employing around 22,000 people. We are proud of our solid track record of
performance and, during 2020,
we responded rapidly to COVID-19, demonstrating the agility and resilience of our people and
business. We remain confident in our future, led by green and digital, and believe we will emerge from
this crisis as an even more efficient and sustainable business.
- During the year, the Board considered the opportunity to acquire Coca-Cola Amatil Limited (CCL), one of
the largest bottlers of RTD beverages and coffee in the Asia Pacific region. The Board invested significant
time in understanding CCL’s business and markets and how the acquisition aligns with CCEP’s long-term
growth ambition.
- CCEP has long-term growth plans to create value together with our franchisors.
- Partnering and collaboration with our suppliers on sustainability is helping drive progress on delivering our
This is Forward commitments while sustainable sourcing ensures security of supply
- of all the commodities and services needed to make, sell and distribute our drinks.
- Partnering and collaboration with our suppliers on sustainability is helping drive progress on delivering our
This is Forward commitments while sustainable sourcing ensures security of supply of all the commodities
and services needed to make, sell and distribute our drinks.
- the Board supervises the profitable operation and development of CCEP to maximise its equity
value over the long term, without regard to the individual interests of any shareholder
- We will continue to adapt to changes in consumer behaviour by focusing on the brands that
our consumers love while extending into exciting new areas such as coffee and hard seltzers.
- To support our ambitious growth plans, we will continue to invest but in a more targeted way,
focused on the biggest opportunities – the capabilities and technology that our people need to
win. This will require us to manage our costs, making choices about our spending and
developing ways to be more efficient and reduce complexity. This has been a long-term
priority for CCEP,
- In 2020, our innovation investment programme, CCEP Ventures, partnered with two new start
ups, Foodl and StarStock, to identify new ways of getting our products to consumers.
- As part of our journey to reach net zero emissions by 2040, we also announced our intention to
reduce absolute GHG emissions by 30% by 2030 (versus 2019)
Our Strategy

- We’ll aim for 50% of our sales to come from low or no calorie drinks.(E
- WITH OUR CONTINUED FOCUS ON PROVIDING CHOICE FOR OUR CUSTOMERS, CCEP IS TAKING
ACTION TOWARDS A STRONGER STRATEGIC ALIGNMENT MAINLY FOCUSING ON HEALTHIER CHOICES
WITH A SUGAR REDUCED ASSORTMENT AND SUSTAINABLE PACKAGING.”
- We’re committed to ensuring that 50% of our sales come from low and no calorie drinks by
2025.
- s, we continually invest in our wide portfolio which includes some of the world’s most popular
drinks
- In November 2020, we partnered with TCCC to launch Topo Chico hard seltzer in GB and the
Netherlands. It is a sparkling water with alcohol and natural flavours, and our first global drinks
brand in the alcohol category. The drink will be available in 330ml cans in three flavours:
Tangy Lemon Lime, Tropical Mango and Cherry Acai. It will be rolled out across our markets in
2021, and will be accompanied by an integrated responsible marketing campaign specifically
aimed at consumers older than the legal drinking age.
Financial Highlight
Reported revenue totalled €10.6 billion, down 11.5% on a reported basis and 11.0% on an fx-neutral
basis.
• Volume decreased 9.5% on a reported basis. Comparable volume decreased 10.0% and revenue per
unit case decreased 1.5%.
• Reported operating profit was €0.8 billion, down 47.5%. Comparable operating profit was €1.2 billion,
down 29.0%.
• Reported diluted earnings per share were €1.09 or €1.80 on a comparable basis, down 28.5% on a
comparable and fx-neutral basis.
• Net cash flows from operating activities were €1.5 billion. Full year free cash flow* was €0.9 billion.
Operational review
Reported revenue declined by 11.5%, driven by a 10.0% comparable volume decline reflecting the
impact of COVID-19. Revenue per unit case was down 1.5% on an fx-neutral basis with positive
momentum in the first and third quarter, offset by the second and fourth quarter, reflecting the
varying extent of restrictions during the year. Our cost of sales per unit case increased 2.5% on a
comparable and fx-neutral basis, mainly driven by an under-recovery of our fixed costs given the lower
volumes, combined with adverse mix. This was partially offset by a reduction in discretionary operating
expenses and resulted in comparable operating profit of €1.2 billion, down 28.5% on a comparable and
fx-neutral basis.
Restructuring
During 2020, we recognised restructuring charges of €368 million. These charges were principally
related to Accelerate Competitiveness, site closures in Germany in January 2020 and the
transformation of our cold drink operations.
Accelerate Competitiveness relates to initiatives across Europe aimed at improving productivity
through the
use of technology enabled solutions. Included in these proposals were the closure of certain production
facilities in Germany and Iberia. These proposals continue the focus on network optimisation and site
rationalisation of the Group. The proposals are also expected to impact a number of functions across
the Group, including business process technology, customer service, sales and marketing and finance,
as the Group seeks to reduce complexity and increase the use of technology. Charges in the year
include €202 million related to severance and accelerated depreciation.

Site closures in Germany relate to the closure of five distribution centres during the course of 2020
and a commercial restructuring initiative relating to vending operations and sales functions. Charges in
the year include €78 million related to severance and accelerated depreciation.
Liquidity and Capital Management
- We continue to invest in our capital expenditure programmes, although due to the impact of
COVID-19, 2020 capital expenditure was reduced by approximately a third by deferring non-
critical projects. Our 2020 capital spend on property, plant and equipment and capitalised
software as part of our business capability programme was €408 million, compared to €602
million in 2019.
- The primary objective of our capital management strategy is to ensure strong ratings and to
maintain appropriate capital ratios to support our business and maximise shareholder value
-
BR BA CCEP
Financial Ratios Return on Equity 2 1 3
Return on Assets 1 2 3
Profit Margin 1 3 2
Current Ratio 1 2 3
Quick Ratio 1 2 3
Net Assets
Turnover
2 1 3
Collection
Period
2 3 1
Credit Period 3 1 2
Gearing Ratio 1 3 2
Interest Cover 1 3 2
Non-financial Employee
Engagement
2 1 3

Ratios Contribution
Customer
Satisfaction
1 2 3
Overall Ranking 1 2 3
1. Employee Engagement Contribution
Employee engagement is used as a performance indicator related to the level of commitment and
connection of an employee to an organization (Bridger, 2014).
YR17 YR18 YR19
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
78% 74% 77%75% 73% 77%
57%
38%
32%
Employee Engagement Rate
BARR (A.G.) PLC BRITVIC PLC COCA-COLA E P PLC
Figure 13: Employee Engagement Contribution
Source – Created by Author
Both BA and BR have positive employee engagement rate with a fluctuated trend, 78% and 75%
in YR17, 74% and 73% in YR18 and 77% in YR19, respectively. On the other hand, CCEP invested
in its employees’ training and development (spent around €9million) according to Britvic
Annual Report (2020) but its employee engagement rate has been declining year after year,
reaching only 32% in YR19. All companies should improve their employee engagement rate

yearly as it leads to higher productivity level, long-term employee retention and improved their
quality of work. They should provide a culture that adopts continuous professional
development of their employees and pay attention to what employees say and act on their
feedback. Moreover, companies should continue to provide rewards and recognition systems
which can increase their engagement significantly, according to Naman, et al. (2019).
2. Customer Satisfaction Rate
According to Hill & Brierley (2017), identifying how customers are satisfied with a company in
terms of customer service, product quality and other satisfaction categories is known as
customer satisfaction rate.
YR17 YR18 YR19
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
72.20% 69.60%
82.30%
52.30%
62.50%
42.90%
47.90% 52.40%
37.80%
Customer SatisfactionRate
BARR (A.G.) PLC BRITVIC PLC COCA-COLA E P PLC
Figure 14: Customer Satisfaction Rate
Source – Created by Author
In YR17, AG started to output the best customer satisfaction rate, 72.20% where BR and CCEP only got
52.30% and 47.90% respectively. AG also became a leader in this ratio in YR18 with 69.60%, followed by
BR (62.50%) and CCEP (52.40%). This trend continued with 82.30% by BA, 42.90% by BR and 37.80% by
CCEP in YR19. However, the rate of BR and CCEP dropped down nearly 20% in YR19. Therefore, BA is the
company with the highest customers satisfaction rate where BR is in the middle and CCEP is the lowest.