refresco reports q3 2019 results/media/files/r/refresco... · q3 2019 highlights solid results: buy...
TRANSCRIPT
14 November 2019 I Rotterdam, the Netherlands
Refresco reports Q3 2019 results
Agenda
• Refresco at a glance
• Q3 2019 highlights
• Financials
• Key takeaways
• Q&A
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Refresco at a glance
14-11-2019 Q3 2019 results 3
Q3 2019 highlights
Solid results: buy & build strategy in action
• Volume 2.9 billion liters, down 3.8% on Q3 2018, in line with market developments
‒ Discontinuation of non-profitable volumes in the UK and low margin water volumes in the US
• Gross profit margin €446 million, up 9.2% on Q3 2018
• Gross profit margin per liter 15.3 euro cents vs. 13.5 euro cents in Q3 2018
‒ Synergies from former Cott’s bottling business
‒ Shift in customer offering towards higher margin products, increased complexity and more services
• Adjusted EBITDA €128 million, up 32% on Q3 2018
• Working capital improvement of €74 million compared to Q2 2019 and €9 million compared to last year despite acquisitions
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Integration of Cott’s bottling business progressing well
• Synergy plan update
‒ Overhead synergies achieved in full in North America and the UK
‒ Procurement synergies outperforming our plan
‒ Operations synergies in progress and expected to take full effect in the coming 12 months
• Objective to fully realize run-rate savings within 24 months after acquisition
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Growth strategy accelerated
• Buy & build strategy in full force
‒ Refresco acquires Coca-Cola European Partners’ Milton Keynes site in the UK
‒ Refresco forms a strategic partnership with PepsiCo in Spain
‒ Refresco to acquire Britvic’s three juice bottling facilities in France
‒ Refresco acquires AZPACK in Arizona, USA
• From bottler to beverage solutions provider
‒ Creation of a new role of Chief Commercial Officer (CCO) in the Executive Committee
‒ COO Europe Vincent Delozière assumed the CCO role as of October 1, 2019. Dieter Schulz to take on the COO Europe position as of January 13, 2020.
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Q3 2019 Financials
15-08-2019 Q2 and HY 2019 results 7
Key financials Q3 2019
14-11-2019 Q3 2019 results
In millions of € unless stated otherwise
(Unaudited) 1,2,3Q3 2019 Q3 2018 YTD 2019 YTD 2018
Volume (millions of liters) 2,905 3,019 8,489 8,332
Gross profit margin 446 408 1,319 1,163
Gross profit margin per liter (euro cents) 15.3 13.5 15.5 14.0
Adjusted EBITDA 128 97 343 240
Net profit/(loss) 15 4 7 (60)
Adjusted net profit/(loss) 17 14 14 31
Net debt42,741 2,400
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1 All values are rounded to the nearest million unless otherwise stated. YTD 2018 figures relate to Refresco Group N.V. for the period January 1, 2018 - March 31, 2018 and to
Sunshine Top B.V. for the period April 1, 2018 – September 30, 2018.
2 Cott's bottling business in North America and the UK was consolidated in Refresco's financial information as of January 30, 2018.
3 Q3 2019 and YTD 2019 figures include IFRS 16 effect. Preliminary estimate of the IFRS 16 related EBITDA improvement is in a range of €74 million (+/-10%) for the full year 2019.
4 Net debt in Q3 2019 includes €108 million shareholder funding. Preliminary impact of the IFRS 16 Leases is €333 million (+/-10%) for the full year 2019.
Increase in gross profit margin per liter
• Solid gross profit margin per liter improvement.
• Q3 2019 increase reflects synergies from the Cott acquisition and a shift towards higher margin products.
• Focus on innovation into new packaging, smaller formats, more sustainable use of materials and value-added products.
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13.8 13.9 13.5
15.3
14.1 13.8 14.0
15.5
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
2016 2017 2018 2019
Gross profit margin per liter (in euro cents)
Q3 YTD
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Reconciliation of operating profit to adjusted EBITDA
In millions of € (Unaudited) Q3 2019 Q3 2018 YTD 2019 YTD 2018
Operating profit / (loss) 58 45 128 54
Depreciation and impairment 39 35 120 98
Amortization of intangible assets 12 4 37 10
Depreciation – IFRS 16 17 - 49 -
EBITDA 126 84 334 162
One-off costs / (benefits) 3 13 9 78
Adjusted EBITDA 128 97 343 240
Adjusted net profit / (loss) 17 14 14 31
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Working capital
• Working capital €94 million vs. €103 million in Q3 2018
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Working capital (€m)
2018
Q3 2019 results
2019
77
58 5542
185
156
103
49
172 168
94
1 2 3 4 5 6 7 8 9 10 11
2017
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Balance sheet and financial position
• Net debt at the end of Q3 2019 was €2,741 million, including €341 million impact of IFRS 16 Leases.
• Cash position of €293 million as of September 30, 2019.
14-11-2019 Q3 2019 results
In millions of € (Unaudited)30 September
2019
30 September
2018
Total assets 4,968 4,485
Total non-current assets 3,685 3,226
Total current liabilities 957 946
Total equity 835 882
Cash and cash equivalents (net of overdrafts) 293 198
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Key takeaways
Key takeaways
15-08-2019 Q2 and HY 2019 results 13
Solid overall Q3 results
Gross profit margins up
Continued synergies from Cott acquisition
Buy & build strategy in full force
Increased focus on more innovative and sustainable products as we move
from bottler to beverage solutions provider
Key takeaways Q3 2019
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Appendix: Cash flows
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In millions of € (Unaudited) Q3 2019 YTD 2019 YTD 2018
Adjusted EBITDA 128 343 240
Working capital change 58 (32) 27
Net cash operating activities 157 208 104
Net cash investing & acquisition activities (17) (140) (2,712)
Net cash (used in) / from financing activities (18) 83 2,666
Movement in cash 125 153 52
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Appendix: Reconciliation from operating profit to adjusted net profit
In millions of € (Unaudited) Q3 2019 Q3 2018 YTD 2019 YTD 2018
Operating profit / (loss) 58 45 128 54
Net finance cost (38) (34) (114) (125)
Profit / (loss) before income tax 20 11 14 (71)
Income tax (expense) / benefit (3) (6) (2) 16
Minority interest (2) (2) (5) (5)
Profit / (loss) 15 4 7 (60)
One-off cost EBITDA 3 13 9 78
One-off cost Finance cost - - - 43
Tax effect on one off costs (1) (3) (2) (30)
Adjusted net profit 17 14 14 31
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Appendix: Net debt as of September 30, 2019
In millions of € (Unaudited) Amount
Cash and cash equivalents (293)
Senior notes (EUR) 445
Term Loan B (equiv.)12,154
Mortage Loan 18
RCF -
Finance leases 2
Capitalized finance costs (36)
Other loans 3
Net debt excl. IFRS 16 effect and shareholder loan 2,293
IFRS 16 Lease liability 341
Shareholder loan 108
Total net debt 2,741
All values are rounded to the nearest million.
1 Represents the euro-equivalent aggregate amount outstanding under the Term Loan B (denominated in EUR, USD and GBP).
Preliminary impact of the IFRS 16 Leases is €333 million (+/-10%) for the full year 2019.
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