U.S. Markets closed

Edited Transcript of BVIC.L earnings conference call or presentation 22-May-19 8:30am GMT

Half Year 2019 Britvic PLC Earnings Presentation

Chelmsford May 23, 2019 (Thomson StreetEvents) -- Edited Transcript of Britvic PLC earnings conference call or presentation Wednesday, May 22, 2019 at 8:30:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Chris Hancock

* Simon Litherland

Britvic plc - CEO & Director

================================================================================

Conference Call Participants

================================================================================

* Damian Paul McNeela

Numis Securities Limited, Research Division - Analyst

* Ewan Mitchell

Barclays Bank PLC, Research Division - Research Analyst

* Ned Peter Hammond

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Nicola Victoria Mallard

Investec Bank plc, Research Division - Consumer Analyst

* Patrick Higgins

Goodbody Stockbrokers, Research Division - Analyst

* Richard Felton

Morgan Stanley, Research Division - Equity Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [1]

--------------------------------------------------------------------------------

Okay. Good morning, everybody, and welcome to our interim results. Before we kick into the presentation, if I can just introduce you to Chris Hancock, who is our Strategy Director, for those of you who don't know him. And Chris will be leading the financial side of the presentation today.

So as we -- you all have seen, our results -- in our results release this morning, I am really pleased to say that we've delivered another strong performance, and we continue to make progress delivering our long-term strategy. We posted organic revenue margin and earnings growth as well as brand contribution growth in each of our markets.

In GB, we've delivered revenue growth in both carbonates and stills, and all 3 of our major stills brands are in revenue growth at the half year. Our Business Capability Programme is on track to complete at the end of the year, and this transformational program is already delivering both cost and commercial benefits and provides us with the modern supply chain for the longer term.

ESG and our nonfinancial performance has always been core to our strategy. And this year, we've continued to progress against the 3 pillars of our Healthier Everyday program. We also continued to invest in our brands through marketing campaigns and brand development, and we're successfully building our categories through innovation.

I'm really proud of the Britvic team and how we continue to grow our business in the right way, both in the short term and for the long term.

GB soft drinks and in particular the carbs category has proved to be extremely resilient in the face of the introduction of the U.K. soft drinks levy in April last year. The levy has accelerated the existing consumer trend towards low/no-sugar variance, resulting in double-digit volume declines in full sugar and strong growth in low- or no-sugar products, though we expect this trend to moderate as we lap the introduction of the levy. Britvic was leading growth in low/no-sugar brands well before the levy, with 10 years of growth to build on and this year is no exception, with every one of our core low- or no-sugar variance in double-digit revenue growth.

Pepsi MAX has added more incremental value than any other cola variant and gained value share, while 7UP free has done the same in the lemon and lime category. R Whites growth is led by the on-trade and Tango also performed well, even ahead of our planned relaunch.

Turning to our GB stills performance, Robinsons continued to drive strong revenue growth through premiumization. This strategy is working. We're growing market share and growing the category, and both Creations and Cordials are driving positive price mix. We've also capitalized on our improved brand strength to take price across the core range for the first time in several years. Encouragingly, brand penetration is 600 basis points higher than this time last year, as we attract new consumers into the Robinsons' franchise. Furthermore, existing consumers are buying more and trading up into Creations and Cordials.

In the dilutes category, Robinsons' squash revenue has increased by 9% this half, and we've now delivered 4 consecutive quarters of growth. In addition, we continue to broaden the shoulders of the Robinsons brand through new formats with the ready-to-drink Refresh'd growing revenue 37% in this half.

I'm pleased to report that we're seeing brand contribution growth in all our other geographies. In Brazil, we've delivered a particularly strong performance in a still volatile market. We're seeing signs of market conditions improving and we're cautiously optimistic on that score. As I think you know, the Bela Ischia acquisition has been fully integrated and has delivered synergies ahead of guidance and has enabled us to expand our market coverage. Across the portfolio, we're being highly proactive on price and mix management, and we're seeing growth in both core and new brands as we executive strongly in store.

In Ireland, we've been highly disciplined in our revenue management over several years and have continued, in 2019, to move our promotional pricing forward. The introduction of the sugar tax initially resulted in strong growth in low/no-sugar brands and declines in regular variance, though this has now begun to stabilize. Revenue from our soft drinks portfolio has increased with strong growth in Pepsi Max, MiWadi and 7UP Free. We have, however, faced challenges in our Counterpoint wholesale business, where we've seen a softening in alcohol sales for the on-trade.

In France, we're proactively managing mix, price and cost of goods, which is having a positive effect on brand contribution. Teisseire syrups are back in revenue growth. And at the same time, we're taking steps to protect profitability and margin across our French business overall. The French retail climate has remained challenging. However, we have successfully navigated the latest round of customer negotiations and look forward to an exciting program of marketing activity this summer. We continue to manage the decline in private-label sales as we focus on our higher margin brand portfolio.

And finally, our international business is performing well. We've seen a very strong performance from Teisseire Zero taking 140 basis points of value share in the Netherlands as we grew our retail value by over 60%. Our Travel & Export business grew as we secured new listings and increased export sales. Then the U.S.A. Fruit Shoot revenue increased, benefiting from the extended presence in Walmart that was secured this time last year.

As you all know, we've been working hard to transform our supply chain through our Business Capability Programme. And I'm delighted to report that we'll complete the project on time at the end of the year. Since starting this journey in 2016, we have installed 6 new PET lines, 3 new can lines, 1 new fully aseptic line, and we've also built new on-site warehousing in Leeds and London. In Rugby, we've completed the fully automated warehouse and commissioned our new combined heat and power plant. And by the end of 2019, we will have completed the commissioning of the last 3 lines there and close the Norwich site.

We're on track to deliver the planned cost benefits, and we are also benefiting commercially from the pack and price flexibility these new lines offer by unlocking opportunities across the portfolio for different channels and customers.

In addition, our BCP program is delivering significant environmental benefits. We have reduced our manufacturing carbon emissions by 14% this year from our more efficient lines, and we will reduce road miles by producing closer to the point of demand and making use of our new on-site warehousing.

Staying with sustainability, we are prioritizing the importance of building credibility and trust with all our key stakeholders. In 2017, we launched our "A Healthier Everyday" sustainable business program, which is based upon 3 pillars; healthier people, communities and planet. We want to make it easier for consumers to make healthier choices. In GB, we've reduced the average calories per serve by 17% so far this year with absolutely no compromise on taste. This is a fantastic achievement, meaning that today around 90% of our total GB portfolio is now exempt from the soft drinks levy. We continued to develop our employee experience with renewed focus on diversity, inclusion, health and well-being. We're now in the top 20 of the Great Place to Work league tables in both GB and Ireland, and we're doing well elsewhere.

We're also making great strides on our new partnership with Diabetes UK, supporting programs to help children with type 1 diabetes and their families. In the first half, Britvic employees have raised over GBP 100,000 for Diabetes UK.

In terms of a healthier planet, in addition to our BCP program, we continued to take steps to reduce the environmental impact of our packaging. We're one of the first signatories to the UK Plastics Pact this time last year, and since then we've removed more than 600 tonnes of plastic packaging through light weighting both bottles and labels. All our plastic bottles are recyclable and we're encouraging consumers to recycle through unpack messaging and TV ad taglines. Going forward, we're looking forward to -- we're looking to significantly increase the use of our recycled PET across our portfolio.

And finally, we continue to work in partnership with government and the industry on the various public consultations that are entrained. We welcome the opportunity to shape the future approach to produce a responsibility that will further reduce plastic pollution in the right way.

We are maintaining our focus on innovation, one of our core revenue growth drivers. We are constantly innovating across multi-categories, and the images on this slide illustrate just some of the innovation and brand development work that is new to market. In terms of extending our core brands, building on the success of Pepsi MAX Cherry and Ginger, we've recently launched a raspberry variant and the initial response has been very positive.

We're launching limited edition flavors of Creations and Cordials for the summer, including the Wimbledon inspired strawberry, cucumber and mint. We're expanding the Teisseire Fruit Shoot brand into flavored water, with the launch of Hydro in France. Tango, our iconic fruit carbonates brand, is also about to be relaunched in GB. And elsewhere in France, we're adopting the good, better, best strategic principles of premiumization to Teisseire with a healthier Fraicheur de Fruit 85% juice and Bio ranges.

And finally, we continue to nurture the emerging brands of Purdey's Aqua Libra and London Essence with new flavors and pack formats. It is still early days for these emerging brands and they are small in the context of the group, but we are encouraged by the progress that they continue to make.

As we head into the key summer trading period, we have a strong program of marketing campaigns ready to engage and excite consumers. We are repeating the Pepsi MAX Taste Challenge that was so successful last summer. We consistently outscore the competition because we know our consumers prefer the taste of MAX to any other cola.

Fruit Shoot has a brand-new campaign, Fruit Shoot for the Moon, enabling kids to win their dream thing. And Purdey's will hit the screens with a brand new campaign, Energy As Nature Intended, capitalizing on the brands all natural credentials. And meanwhile, our cheeky Alpaca merger will reappear to support J2O's summer activity.

Of course, summer is not summer without Wimbledon. And this year, we're activating a broad campaign, highlighted here by Robinsons Refresh'd. In France, we've signed a new partnership with the National Forestry Office that will be activated by Teisseire syrups. While in Ireland, we've arranged our marketing campaigns with the MiWadi Zero sugar activity highlighted here.

And finally, I'm sure you'll all be familiar with Tango, and how it has a quite a history of disruptive marketing. The fruit carbs category has been -- has clearly been benefiting from the industry levy. And at the brand level, Tango is already posting double-digit growth as we saw earlier.

We've recently launched a new pack design and range of sugar-free flavors, and we have a multi-channel advertising campaign ready to roll. Let's take a look at one of the TV spots.

(presentation)

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [2]

--------------------------------------------------------------------------------

Okay. So I'm really pleased with the first half performance and excited about what we're going to bring to the market this summer. But taking a step back, you've heard me say many times over the years that soft drinks is a highly robust and resilient category that continues to grow, both in value and volume, even in our mature markets. Consumer trends continue to change and this creates opportunity for growth. Britvic is well placed to capitalize on these opportunities through our portfolio of brands and our strength in bringing them to market.

So let me now handover to Chris to take us through the financial side of the presentation.

--------------------------------------------------------------------------------

Chris Hancock, [3]

--------------------------------------------------------------------------------

Thank you, Simon. Good morning, everyone. As you will have seen from the RNS this morning, we've delivered a strong first half with organic revenue margin and earnings growth, underpinned by disciplined approach to revenue management.

Organic group revenue increased 1.9%, organic EBIT margin expanded by 30 basis points, and adjusted EPS increased by 5.2%. With our improving free cash flow and confidence in the full year, we've declared an interim dividend of 8.3p, which is an increase of 5.1%. In previous years, the interim dividend is typically represented around 30% of the full year payout. As you will be aware, interims are working capital high for us ahead of the key summer trading period. We've reported adjusted net debt-to-EBITDA of 2.4x, an improvement on this time last year.

So for the business units, let me call out some of the highlights from the first half. GB stills revenue increased 4.9%, with Robinsons, Fruit Shoot and J2O all in growth. The ARP increase reflects the price movement on the core Robinsons range as well as the success of Robinsons premiumization and J2O growth.

Brand contribution increased 5.7% as a result of the favorable brand mix and strong price realization, while also absorbing an increase in A&P spend.

In the second half of the year, we will lap the introduction of the new Robinsons ranges and the impact of the carbon dioxide shortage when we switched activity from carbonates to stills past summer. GB carbonates revenue grew 2.2% due to revenue management of promotional mechanics and favorable pack channel mix with ARP increasing 7.2%.

Volume declined 4.5% against a strong comparative last year, which included trade stock loading ahead of the introduction of the levy. Brand contribution and margin declined due to a combination of cost of goods inflation and a significant increase in A&P spend, as we reverse the delay in spend due to the levy introduction last year.

In Ireland, both brand contribution and margin increased, while ARP grew by 4.1%. Volume declined as we focused on value over volume. For example, for Ballygowan, we increased promotional price points for large packs. Ireland also introduced the Sugar-Sweetened Drinks Tax last year with trade buy-in ahead of the original implementation date of April 2018. The main driver of the revenue decline was a fall in alcohol sales through the Counterpoint wholesale division.

In France, we delivered an ARP improvement as well as brand contribution and margin growth through proactive management of price and cost of goods. The positive mix was due to growth in higher margin syrups versus a managed decline in private label. Fruit Shoot declined as intense competition in the grocery channel continued.

Performance in Brazil was strong as we lapped a weak comparative last year. Volume increased 1.5% led by growth in the ready-to-drink portfolio. ARP increased 6.6%, resulting in revenue growth of 8%. Brand contribution grew while margin declined, reflecting both increased cost of goods inflation and increased A&P spend in areas such as on-pack promotions and in-store sampling.

And finally, International. Pleasingly, each of the subchannels generated revenue growth. The Travel & Export channel benefited from new account wins and increased sales to overseas markets. In Benelux, growth was lead by Teisseire, particularly the no-sugar Zero range in Holland. And in the U.S.A., Fruit Shoot revenue increased due to the expansion in Walmart last year, which we will now lap in the second half. With A&P spend in line with last year, both brand contribution and margin increased.

Overheads are modestly ahead of last year. We have, however, continued to focus on driving cost efficiency to enable us to support reinvestment behind our growth drivers. This half, we've invested more spend in A&P, which is largely phasing, while selling costs increased 4.6%, reflecting increased investment in field sales resource to support great in outlet execution.

Half year is always a cash outflow for us as we build stock for the summer. This year, working capital has been impacted by our Brexit contingency and the unwind of actions in response to last year's carbon dioxide shortage.

As you can see, from this slide, however, we have still reduced the half one outflow, and we anticipate further improvement in free cash flow generation at the end of this year and into the future. We're confident in our future cash flow growth for the following reasons: First, continued organic profit growth; second, we have the balance of the BCP cost benefits guidance come through next year; third, lower ongoing capital investment requirements and reduction in adjusting items as the Business Capability Programme completes; and fourth, we expect lower ongoing inventory levels in GB from optimizing the BCP and eliminating the Brexit contingency. The exact completion date of the Business Capability Programme may effect the year-end position as we transition production from the Norwich side and the level of associated contingency stocks run down.

Turning now to our full year guidance. The guidance remains the same for input cost inflation, capital spend, pension contributions, the effective tax rate and interest. We've upped the guidance for adjusting items to reflect the inclusion of the GMP pension equalization judgment. We did highlight this at prelims as a potential future item when there was a wide range of potential impact. We're now in a position to confirm the impact in the order of GBP 6 million. And as the BCP nears completion, we can confirm that debt leverage will fall to between 2x and 2.2x at the year-end.

So before we open up for Q&A, let me summarize our first -- strong first half performance. We've delivered growth in revenue, margin and earnings as well as in brand contribution in all geographies. We've successfully delivered strong price growth through disciplined revenue management. Across the group, we're raising our game in the sustainability space and we're confident of delivering against full year expectations and into the future.

Many thanks for listening. Simon and I will now be happy to take questions from the floor. If you could wait for the microphone and state your name and company for those listening to the webcast, that would be great. Thank you.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Richard Felton, Morgan Stanley, Research Division - Equity Analyst [1]

--------------------------------------------------------------------------------

Richard Felton from Morgan Stanley. Two questions for me, please. Firstly on capital allocation. As we get towards the end of the Business Capability Programme, clearly we're going to see a significant improvement in free cash generation. I appreciate the net debt-to-EBITDA is perhaps a little bit on the high side, you're talking about returning cash to shareholders at this stage. But could you please remind us of your capital allocation priorities? And at what level of net debt-to-EBITDA you'll begin to see your balance sheet is inefficient? Secondly, on Robinsons, it seem like the brand is in a much better place today compared to a few years ago. Can you comment on the sustainability of that improvement? And are you confident that the brand can continue to grow even as you start to lap the introduction of various innovations, such as Creations?

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [2]

--------------------------------------------------------------------------------

Okay. Thanks, Richard. Yes, I mean, our capital allocation policy is -- as previously stated, which is focused around progressive dividend payment with $0.50 payout. We've said CapEx will obviously drop down into the range of 3.5% of 4.5% of revenue going forward. And then it will be -- cash flow will be used to pay down debt into the range of 1.5 to 2.5x. We will look continually for add-on acquisitions, either into new geographies. France and Brazil are good examples of that. We'll add on acquisitions into existing marketplaces. But if we get towards the low end of that range and we can't find good uses of cash, of course we'll look at them in a way that we might return it to shareholders, but that's a little way away yet.

And then on Robinsons, look, we're really pleased with the performance, as we said in the presentation. We've got 4 years of -- 4 quarters of consecutive growth. I think importantly, we're gaining penetrations, attracting new consumers into the brand, directing consumers from other brands. And just as importantly, for customers, we're growing the category overall. So I'm really excited about what we're doing with the brand. We have got further innovations in the pipeline. We've got a strong marketing campaign with a big idea at its core. So I don't see any reason why the improved performance of the brand is not sustainable. Having said that, quarter 3 and 4 will be slightly less strong in terms of growth, given the CO2 shortage last year. Well, you remember, we transferred some of our feature and display from carbs to stills. And you'll see us lapping some of that this quarter. But I'm pretty confident we'll grow in the second half as well.

--------------------------------------------------------------------------------

Ewan Mitchell, Barclays Bank PLC, Research Division - Research Analyst [3]

--------------------------------------------------------------------------------

It's Ewan Mitchell from Barclays here. First question, on Purdey's energy. Your competitors have both launched a couple of new variants into the market. Purdey's, certainly from the scan data appears to be doing very well. How do you see the new launches helping or hindering the category? And how do you see Purdey's within that and going forward? And secondly, coming back to Robinsons, how much of that was -- of the price growth was trading out through mix and the benefits you've seen there? I know you've said that the Robinsons core brand took price, but how much of the Creations is in there?

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [4]

--------------------------------------------------------------------------------

Sure. I'll take the first and you can talk about the price mix. So look, we've decided not, at this point, to compete in what we refer to as hard energy and come up against some very big brands and very strong #1 and #2 brands in that category. But we do see that consumer trend towards more natural and healthier offering's creating a space for more natural energy, which is where Purdey's plays. It's still relatively small, but taking some share and has grown in high double-digits in the first half. So we're very pleased with the performance, and we think it's got lots of potential. We've got a new marketing campaign coming through in the summer. We've gained some great distribution points across both the retail and convenience channels. And we'll continue to invest behind the brand going forward.

--------------------------------------------------------------------------------

Chris Hancock, [5]

--------------------------------------------------------------------------------

So to pick up your questions on Robinsons, Ewan, I think as Simon referenced and you referenced in your question, we've done a couple of things. So the Creations and Cordials ranges have been very successful in trading consumers up. So both of those are ahead of the expectations that we had for them, which is fantastic. And that's had a positive effect on margin as well as the overall squash category. And the enhanced brand strength we've had across Robinsons means that price taking that you're referring to, it's the first time we've been able to do that really for about 4 or 5 years. So that's quite a significant step for us to be able to move it forward. And that drives quite a significant mix benefit within the Robinsons brand. Now inevitably, core is much bigger than the Creations and Cordials range, so you've got a -- in terms of your asking if how much is any -- you get a more significant move just because of the sheer size of core, but Creations and Cordials are becoming increasingly important in the overall mix as we move forward.

--------------------------------------------------------------------------------

Damian Paul McNeela, Numis Securities Limited, Research Division - Analyst [6]

--------------------------------------------------------------------------------

Damian McNeela from Numis. First question is on France, and clearly the margin is benefiting from lower private label sales. But can you give us sort of an update on what proportion of the portfolio is not private label? Until what extent the contribution margin is sustainable in the sort of low 30s number, please? And then the second one is around the depreciation charge. It's obviously a lot higher than it was in the first half of last year, can you just sort of confirm that we're looking for depreciation charge of double what we saw in the first half, please?

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [7]

--------------------------------------------------------------------------------

Okay. Yes. So I'll do France and Chris, you could pick up the second.

Yes, Damian, the -- we're actually quite pleased with the French performance, 9% contribution growth. As you say, the margin improvement is driven partly by the decline in private -- lower margin private label sales, but also by favorable raw material costs. And as a proportion of the total business, private label is now more like 40%, 60-40, and that includes both syrups private label and juice private label. But we would see ourself continuing to focus on the branded side of the business going forward, which is obviously at much higher margin. Great to see Teisseire returning to growth in the first half, and that is obviously the core brand in the French portfolio. And Fruit Shoot, which is a better margin, obviously than our own label business as well as it has come under some pressure this half, but we've got a strong summer program for that brand as well.

--------------------------------------------------------------------------------

Chris Hancock, [8]

--------------------------------------------------------------------------------

On your depreciation question, Damian, so you're quite right. So you can see depreciation is starting to move forward, which is something that we flagged as part of inevitable consequence of the Business Capability Programme. You're seeing some of that flowing through at half year now. You'll see that continue to flow through as we go through to the balance of the year.

--------------------------------------------------------------------------------

Patrick Higgins, Goodbody Stockbrokers, Research Division - Analyst [9]

--------------------------------------------------------------------------------

Patrick Higgins from Goodbody. Just two questions for me, please. Firstly, on A&P spend, obviously a bit of a pickup of the -- in H1. How should we anticipate that trend for the full year bearing in mind, obviously, you've a number of marketing campaigns laid out? And then secondly, just on the international business and specifically, Fruit Shoot U.S., obviously, you've seen the benefit of the Walmart expansion there. Is there any new business wins or negotiations currently ongoing that's worth disclosing?

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [10]

--------------------------------------------------------------------------------

Thanks, Patrick. Do you want to do A&P first?

--------------------------------------------------------------------------------

Chris Hancock, [11]

--------------------------------------------------------------------------------

Yes. Patrick, the A&P spend, do you -- if you cautiously mind back a year, you might remember with the introduction of the soft drinks levy, we delayed some spend from half 1 to half 2 only by few weeks as it happened, but it mainly fell over the half year, which was such that we could go on to TV and the like and advertise quite hard after the introduction of the levy. So what you're seeing in the A&P at the half year is effectively a reversal of that, so we've brought that spend back to its natural home, which means it comes back into the first half and that particularly affects GB carbonates. As you move forward, that's what we expect to be the more normal pattern, if you like, in a typical year. As we go the back end -- through the back end of the year, we expect A&P spend to tick up a little bit, but effectively that's -- what you're seeing at the moment is more of a phasing effect than an overall trajectory, if you like.

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [12]

--------------------------------------------------------------------------------

Yes. And on the International business and Fruit Shoot, there's not a great deal of new news in terms of distribution gains at this stage of the year. What we've been focused on is improving our in-store presence where we are distributed from a multi-pack perspective and improving rate of sale. And within the outlets and customers that we are distributed, our core focus has been in Walmart, where we've seen a satisfactory performance, I'd say. And from a single-serve perspective, we continued to grow that business and that is, as we've said before, the profitable half of the Fruit Shoot portfolio. But the strong performance in International, I think, is much wider than Fruit Shoot U.S.A, which is a small piece of it and is very much driven through the Travel & Export business as well as a strong performance in Benelux, which we're pleased to see particularly from the Teisseire brand.

--------------------------------------------------------------------------------

Nicola Victoria Mallard, Investec Bank plc, Research Division - Consumer Analyst [13]

--------------------------------------------------------------------------------

Nicola Mallard, Investec. You mentioned COGS were rising in -- sorry, declining in France, but they are rising in the U.K. in carbs. Can you explain what the difference in those COGS were, presumably some of them are similar like packaging?

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [14]

--------------------------------------------------------------------------------

Do you want to go?

--------------------------------------------------------------------------------

Chris Hancock, [15]

--------------------------------------------------------------------------------

I can do that one, sure. Yes. So COGS, I guess, taking the U.K., first of all Nicola, just in terms of what's happening within there, most of the increases that we're seeing are packaging related, so PET, bit on cans, bit on glass plus we also see COGS increases, utilities is a big area and fuel and the like that goes through that. Some of them are common with France, some of them aren't. So if you look at something like the Teisseire product in France, that's made in cans, for instance, it's not made in PET. So you get some of the differences that's happening within there. And some of the offset and things that are going in the other way are things which are big, raw materials for us in France, such as juices and sugar, which have gone in the other direction. So you have got quite a different COGS mix between the 2 geographies that drives a different shape of the performance.

--------------------------------------------------------------------------------

Ned Peter Hammond, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [16]

--------------------------------------------------------------------------------

Ned Hammond from Berenberg. Just one from me. On the sort of commercial benefits that you've been thinking about getting from the BCP program, is there anything specific that you would point to that you've gained so far? And what you're seeing as sort of the main opportunities over the next 12 to 18 months?

--------------------------------------------------------------------------------

Simon Litherland, Britvic plc - CEO & Director [17]

--------------------------------------------------------------------------------

Yes. I mean there -- with a quite wide ranging actually. I mean I think our ability to compete with multi -- large multi PET cans is something that we couldn't do before. We couldn't meet a cost point to meet the price point, at which we can compete, that's one example. 250 mL cans, slimline cans, we were unable to produce in-house. Large PET, so 3 liter PET is another example, which is proving a good growth driver both for Robinsons stills brand as well as within carbonates. So it really is quite wide ranging. And I think it's really what broadened our ability to offer different pack price points across different brands in the portfolio and across different channels. So it's something that the commercial team are very much enjoying.

Okay. I think that's about it. So there we have it. Thanks very much for coming, and thanks for your support. Have a good day.