Corporate story Refresco world s largest independent bottler for retailers and A-brands J.P. Morgan 2018 European High Yield & Leveraged Finance Conference I London, September 7, 2018
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Today s presenter Aart Duijzer CFO Refresco CFO of Refresco and one of the founders of the company He was appointed to that position in December 2000 Prior to joining Refresco Aart worked as Finance Director of the Continental European division of Hazlewood Foods Plc He holds Masters degree in business economics from the Erasmus University in Rotterdam, the Netherlands. Aart is a Dutch Chartered Accountant 3
Agenda Refresco at a glance Governance and latest results Integration of Cott s bottling activities Summary
Refresco today TB 5
We are the world s largest independent bottler for retailers and A-brands Founded in 1999 with a management buyout from a major Dutch dairy group Unique production footprint with 57 manufacturing sites across North America and Europe Offering a complete product portfolio of soft drinks and fruit juices for retailers and A-brands Customers benefit from quality, reliability and cost leadership 6
With an 18 year track record of accelerated growth 2018 2015 2016 First step into North America Acquisition of Cott s bottling activities PAI & BCI enter to fuel next stage of growth 2013 Public listing Euronext Amsterdam 2007 Merger Gerber Emig 2000 2002 Refresco established through a MBO from a major Dutch dairy group European expansion First steps in contract manufacturing Buy & Build More than 20 companies in 15 years 7
The world s largest independent bottler for retailers and A-brands Leadership positions In Europe and North America TB Proforma Volume 2017 Proforma Revenue 2017 Proforma synergies adj. EBITDA 2017* People & Facilities 11.0 bn liters 3.7 bn 392 m 9,500 people 57 locations 12 countries * Including run-rate synergies achievable within the first 18 months and full year results of Cott s bottling activities. 8
..with a well balanced volume split across geographies & products Leadership positions In Europe and North America TB Proforma 2017 volume by channel Proforma 2017 volume by geography Proforma 2017 volume by product Contract manufacturing 30% Retailer brands 70% UK 14% North America 37% Energy/Sport drinks 7% Still drinks 9% RTD tea 11% Other 4% CSD 28% Europe 63% Juices 20% Water 21% 9
Our 59 facilities are strategically located to service customers in North America and Europe Canada North America 26 EUROPE 31 United States Mexico 10
Governance and latest results 11
Ownership and Group structure Management 2% PAI 63% BCI 35% Sunshine Equity B.V. Sunshine Top B.V. Reporting entity Sunshine Holding B.V. Sunshine Mid B.V. Sunshine Investments B.V. (BidCo) 99.4% Senior Notes 445mm Term Loan Facilities 1,975mm equiv. Revolving Credit Facility 200mm Refresco Group B.V. 1 Note: 100% shareholding unless otherwise specified 1 Following the completion of the Squeeze-out, Refresco Group B.V. is expected to merge into Sunshine Investments B.V. Before May 2, 2018 the company was named Refresco Group N.V. 12
Key financials Q2 and YTD 2018 In millions of unless stated otherwise, Unaudited Q2 2018 Q2 2017 YTD 2018 YTD 2017 Volume (millions of liters) 3,040 2,052 5,313 3,726 Revenue 1,037 643 1,810 1,166 Gross profit margin 428 275 755 511 Gross profit margin per liter (euro cents) 14.1 13.4 14.2 13.7 EBITDA 44 65 78 102 Adjusted EBITDA 99 66 143 103 Net profit/(loss) (24) 27 (64) 33 Adjusted net profit/(loss) 15 27 17 33 Net debt 2,436 621 The YTD 2018 financial information comprises the financial information of Refresco Group N.V. for the period 1 January 2018 - March 31, 2018 and the financial information of Sunshine Top B.V for the period April 1, 2018 - June 30, 2018. The YTD 2017 financial information relates to Refresco Group N.V. All values are rounded to the nearest million unless otherwise stated. Cott's bottling business in North America and the UK was consolidated in Refresco's financial information as of January 30, 2018. 13
Gross profit margin per liter Gross margin per liter (in euro cents) 14.4 14.4 Gross profit margin per liter was 14.1 cents, in line with seasonal pattern. 14.2 14 14.2 14.2 14.0 14.1 Compared to Q2 2017, gross profit margin per liter was up 5.2%. 13.8 13.6 13.4 13.2 13 2015 2016 2017 Q1 2018 Q2 2018 14
One-off costs related to acquisition of Cott s bottling activities & takeover of Refresco by PAI and BCI impacted results In millions of, Unaudited Q2 2018 Q2 2017 HY 2018 HY 2017 Operating profit 6 41 9 55 D&A and impairment 38 24 70 48 EBITDA 44 65 78 102 One-off costs 55 1 65 1 Adjusted EBITDA 99 66 143 103 Breakdown of one-off costs In millions of Unaudited HY 2018 Transaction cost 1 46 PPA (non-cash) 12 Integration cost 5 Other 2 65 Adjusted net profit 15 27 17 33 1 The transaction cost is related to the acquisition of Cott s bottling activities and the acquisition of Refresco by PAI and BCI. 15
Net debt as of June 30, 2018 In millions of Amount Cash and cash equivalents (160) Senior notes (EUR) 445 Revolving Credit Facility ( 200million) 1 90 Net debt amounted to 2,436 million as of June 30, 2018 Term Loan B (equiv.) 2 1,975 Shareholder loan 100 Mortage Loan 21 Finance leases and other loans 3 Capitalized finance costs (42) Other loans 3 2,436 All values are rounded to the nearest million. 1 90mm RCF was drawn in connection with the acquisition of Refresco by PAI & BCI. 2 Represents the euro-equivalent aggregate amount outstanding under the Term Loan B (denominated in EUR, USD and GBP) based on EUR/USD FX rate of 1.164 and on EUR/GBP FX rate of 0.885 as of June 30, 2018. 16
Integration of Cott s bottling activities 17
The acquisition of Cott s bottling business is at the core of Refresco s strategy 1 2 3 4 World s largest independent bottler to serve its customers in Europe and North America Gain leadership in the attractive U.S. and UK markets Significant and tangible value creation opportunities Further diversification of customer base 5 Uniquely positioned to tap into several growth opportunities 18
Track record of synergy realisation from acquisitions - Significant value creation opportunity from Cott s bottling activities Run rate synergies (in % of 2017 Cott TB revenue mm) Envisaged synergy sources Synergy sources Management Ambition Procurement 2.3% - 34mm Operations 35% Operations 1.5% - 22mm Procurement 54% Overhead 0.5% - 7mm Total run-rate 4.3% - 63mm 1 (over 3 years) Overheads 11% Commercial Upside 1 63m run-rate synergies expected to be achieved in the first three years following consolidation, of which 44m run-rate synergies to be achieved within the first 18 months 19
Integration is well on track in the first five months Integration in North America started immediately after completion of the acquisition on January 30 UK integration commenced on April 3 after the green light from the UK Competition and Markets Authority Synergy realization 100% 95% 60% 30% Year 1 Year 2 Year 3 Year 4 Expected implementation costs ( mm) Integration Capex 59 28 16 38 13 24 16 21 8 6 6 Total Year 1 Year 2 Year 3 20
Summary 21
Key takeaways The world s largest independent bottler for retailers and A-brands Operations in 12 countries leading positions across North America & Europe Integration of Cott s bottling activities on track Overall volume development in line with expectations, old Refresco volumes slightly disappointing in H1 2018 First synergies are starting to flow into the results Attractive market dynamics 22
Appendix: Reconciliation from operating profit to adjusted net profit In millions of, Unaudited Q2 2018 Q2 2017 YTD 2018 YTD 2017 Operating profit 6 41 9 55 Net finance cost (33) (5) (91) (10) Profit / (loss) before income tax (27) 36 (82) 44 Income tax (expense) / benefit 6 (9) 21 (12) Minority interest (2) - (3) - Profit / (loss) (24) 27 (64) 33 One off cost EBITDA 55 1 65 1 One off cost Finance cost (3) 42 Tax effect on one off costs (13) - (27) - Adjusted net profit 15 27 17 33