New 20-year franchise bottling agreement for PepsiCo carbonated brands in Great Britain
All plastic bottles in GB to be made entirely from recycled PET by the end of 2022
FY20 performance - trading anticipated to be slightly ahead of market consensus
Britvic today announces it has reached agreement with PepsiCo for a new and exclusive 20-year franchise bottling agreement for the production, distribution, marketing and sales of its carbonated soft drink brands - including Pepsi, 7UP and Mountain Dew - in Great Britain. The new agreement extends the relationship, which commenced in 1987, to 31 December 2040 and includes the Rockstar energy brand, for which Britvic will take responsibility from 1 November this year.
Britvic also announces today its intent for all plastic bottles in GB to be made from 100% recycled plastic (rPET) by the end of 2022 – three years earlier than originally planned, and ahead of the previous target of 50%. This will cover the entire GB portfolio of Britvic-owned and PepsiCo brands, and demonstrates both companies’ commitment to sustainability and to a healthier planet.
Commenting on this renewal, Simon Litherland, Chief Executive Officer Britvic, said:
“I am delighted that we have formally extended our relationship with PepsiCo in Great Britain for a further 20 years. The powerful combination of the Britvic-owned and PepsiCo portfolio offers customers and consumers a broad range of great-tasting, trusted brands for any occasion. We are excited to add Rockstar to our offering and look forward to working together to grow the brand.
The announcement of our intent to move to 100% recycled PET in GB by 2022 is a significant moment for Britvic and our partnership with PepsiCo, demonstrating our joint commitment to protecting the planet today and for future generations. Both Britvic and PepsiCo have sustainability at the heart of their business strategies, and we will continue to work together to deliver on our shared ambition to protect the environment and offer healthier choices in the years ahead.”
Silviu Popovici, CEO PepsiCo Europe said:
“We are very pleased to announce this new and enhanced exclusive bottling appointment with Britvic in Great Britain, as well as further strengthening our portfolio with the exciting addition of Rockstar. This decision was based on our history of sustained strong performance in the market, backed by Britvic’s ongoing commitment to significantly invest behind our brands.
More importantly, our shared values have led to sustainability forming an integral part of this new agreement, which includes our latest mutual commitment to ensure that all of our bottles are made from 100% recycled PET by the end of 2022. This is in support of PepsiCo & Britvic’s vision of creating a circular economy on plastic and building a world where plastics need never become waste. We very much look forward to the next chapter of our strengthened relationship with Britvic.”
Trading Update and Outlook
Following better than expected trading across the peak summer period, Britvic’s adjusted EBIT for the full year 2020 is anticipated to be slightly ahead of current market consensus. Trading has benefited from both the limited re-opening of the UK hospitality sector since early July and continued strong trading in the at-home channel across its markets. The year-end adjusted net debt balance is expected to be approximately £40m to £50m lower than last year, reflecting disciplined cash management.
Looking forward, the economic outlook for 2021 remains uncertain. The re-introduction of further lockdown restrictions and the impact of social distancing measures on capacity in the hospitality sector will, undoubtedly, continue to have an impact on Britvic’s performance in 2021. However, Britvic is confident in its long-term prospects and anticipates rebuilding investment in 2021 behind its long-term growth drivers, including innovation and marketing, as well as its commitment to sustainability through its strategic priority of “Healthier People, Healthier Planet”. Britvic is well-positioned to lead the long-term recovery of the category with a portfolio of market-leading, trusted brands, a track record of operational agility and a dedicated and committed team.
Further detail will be communicated in the Preliminary results announcement on the 26 November 2020.
For further information please contact:
|Joanne Wilson||Chief Financial Officer||+44 (0) 7881 751550|
|Steve Nightingale||Director of Investor Relations||+44 (0) 7808 097784|
|Stephanie Macduff-Duncan||Head of Corporate Communications||
+44 (0) 7808 097680
|Stephen Malthouse||Headland||+44 (0) 7734 956201|
NOTES TO EDITORS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This announcement includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors including as a consequence of the Covid-19 pandemic, which may cause the actual results, performance or achievements of the group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by the Listing Rules and applicable law, Britvic undertakes no obligation to update or change any forward-looking statements to reflect events occurring after the date such statements are published.