Britvic Regulatory News (BVIC)

Britvic plc 

("Britvic" or the "Company")

Legal Entity Identifier: 635400L3NVMYD4BVCI53

8 December 2022

2022 ANNUAL REPORT AND 2023 NOTICE OF ANNUAL GENERAL MEETING

Following the release on 23 November 2022 of the Group's Preliminary Results Announcement for the year ended 30 September 2022, and in compliance with Listing Rule 9.6.1, the Company has today submitted the following documents to the Financial Conduct Authority, and they will shortly be available for inspection at the National Storage Mechanism which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

· Annual Report and Accounts 2022

· Notice of the Annual General Meeting (AGM) of the Company, to be held on Thursday, 26 January 2023 at 11.00am at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ

· Proxy form for the 2023 AGM

The Annual Report and Accounts 2022 is available to view or download in pdf format from the Company's website at www.britvic.com/annualreport.

A condensed set of Britvic plc financial statements and information on important events that have occurred during the year and their impact on the financial statements were included in the Company's preliminary announcement on 23 November 2022. That information, together with the information set out below in appendices A and B which is extracted from the Annual Report and Accounts 2022, constitute the requirements of DTR 6.3.5 which are to be communicated via a RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report and Financial Statements. Page and note references in the text below refer to page numbers in the Annual Report and Accounts 2022.

The 2023 Notice of Meeting is available to view or download in pdf format from the Company's website at www.britvic.com/agm.

Clare Thomas

Company Secretary

Appendix A

Principal risks and uncertainties

The principal risks and uncertainties relating to the Company are set out on pages 73 - 75 of the Britvic Annual Report and Accounts 2022. The following is extracted in full and unedited text from the Britvic Annual Report and Accounts 2022.

The table [below] sets out our principal risks, a summary description of the risk, the connection with our strategy, a summary of key controls in place to mitigate the impact should a risk come to fruition.

This does not represent an exhaustive list of all the risks facing the organisation, nor are they set out

in priority order below. There will be additional risks not known to management, or currently assessed

to be less material, that may also have an adverse effect on the business.

Key:

H Healthier People, Healthier Planet

B Build local favourites and global premium brands

F Flavour billions of water occasions

A Access new growth spaces

Consumer preference: Innovation

Risk score movement from the prior year: No change.

Risk description

Risk that our portfolio over time becomes less relevant to consumers and customers as we fail to adapt to changing needs or environment and as such we lose market share and revenue.

Link to strategic objective: H, B, F, A

Risk owner

Chief Marketing Officer

Change during the year and residual risk

Flavouring billions of water occasions, which is operating as a separate entity to help focus purely on innovation, and innovating to scale are key parts of our 2025 strategic plans.

We have continued to develop and build our innovation pipeline across our markets, for example Robinsons Mini, Aqua Libra Co, Tango Berry Peachy and Tango Apple Sugar Free, Ballygowan Hint of Fruit and Fruit Shoot Brazil.

Impact on the business

If our innovation fails to win and build scale in the marketplace this can weaken existing brands and

means we miss out accessing new spaces with both an impact on financials and our reputation with

customers and consumers.

Risk mitigation

- Continuous assessment of consumer and customer trends and insights in order to anticipate changes in preferences and adapt our offering accordingly.

- Well-established controls in place with gate process, external competitor reviews and market analysis.

- Acceleration of speed to market in a number of areas with agile techniques to address a more volatile environment.

- Increased participation in rapidly growing energy category through Rockstar and launch of Club and Energise innovations in Ireland.

Health concerns

Risk score movement from the prior year: No change.

Risk description

The continued focus on health and wellness, changing consumer attitudes and the threat of increased regulation, may impact our performance and the wider soft drinks category.

Link to strategic objective: F, A

Risk owner

Chief Marketing Officer

Change during the year and residual risk

Health remains key concern despite cost of living pressures and delays to regulation.

Continued focus on portfolio choice with leading low and no sugar offerings and on enhancing our health credentials, e.g. with Benefit Drops and Robinsons Fruit & Barley with added vitamins both in

Great Britain.

Impact on the business

This could result in a decline in the soft drinks category and/or our share of it.

Risk mitigation

- Playing an active role in health policy debate with key external stakeholders, policymakers and nongovernmental organisations.

- Maintaining transparent stakeholder engagement and lobbying to understand best practice and share intelligence through our active membership of the Food and Drink Federation and the British Soft Drinks Association.

- Healthier People, Healthier Planet strategy to 2025 in place includes public targets on calories per serve, which is monitored and reported on across our markets.

Retailer landscape and customer relationships

Risk score movement from the prior year: No change

Risk description

We may not be able to maintain strong relationships with our key customers or respond to changes in both the route to market (e.g. channel shift) and the retailer landscape (e.g. consolidation or failure).

Link to strategic objective: H, B, F, A

Risk owner

Business Unit Managing Directors

Change during the year and residual risk

Increased inflationary pressure has increased the resilience risk to our customer base.

The strength of our customer relationships has been demonstrated through the recent Advantage Group survey, which measures customer feedback from Retailers, Wholesalers and Suppliers in the UK. We have been ranked in the top three suppliers across all of Grocery, Convenience and Wholesale, and first for e-Commerce.

We have invested in upgrading our commercial systems and processes to allow the team to focus on value add and growth activities.

Impact on the business

Failure to mitigate this risk could lead to reduced margin and returns from customers due to market

pressures, pricing not keeping up with input inflation, and not keeping up with consumer trends.

Risk mitigation

- We operate across many different customer channels and markets and continuously monitor customer performance and trends.

- Revenue growth management strategy in place.

- We develop joint business plans with customers that include investment and activation plans.

- We have a strong and established customer relationship and contact strategy procedures.

Supply Chain

Risk score movement from the prior year: Increased.

Risk description

Supplier failure, market shortage or an adverse event in our supply chain impacts sourcing of our products and the cost of our products is significantly affected by commodity price movements.

Link to strategic objective: H, B, F, A

Risk owner

Business Unit Managing Directors

Change during the year and residual risk

Key projects to address resiliency are well underway, with the national distribution centre redevelopment and warehouse management system upgrade, following the completion of a new can line in Rugby, and further improvements in capacity are planned next year.

As a result of the heightened inflationary environment, we see an increased risk of raw material supply disruption.

Impact on the business

Failure to supply required volumes and deliver acceptable customer service levels could limit revenue growth (volume and innovation) as well as increase the risk of adversely impacting customer relationships.

Risk mitigation

- Robust supplier strategy, selection, monitoring and management processes are in place and we are seeking to diversify our supplier base in key areas.

- Enhancement of business continuity planning launched to enhance the visibility of our key dependencies, our key threats and solution design.

- Improvements made to enhance medium to long‑term demand and supply forecasting.

- A commodity risk management policy in place, approved by the Board, allowing for the use of standard commodity derivatives to manage the commodity price risk.

Sustainability and environment

Risk score movement from the prior year: No change.

Risk description

Climate change, water scarcity, biodiversity loss, natural resource depletion and environmental pollution all present risks to our ability to source, manufacture and market our drinks.

Link to strategic objective: H, B, F, A

Risk owner

Chief Marketing Officer

Change during the year and residual risk

Sustainability remains front and centre for all our stakeholders and is the subject of increasing regulatory focus.

We have invested in significant carbon reduction plans with biomass boilers installed in Brazil and we are underway with plans for electric boilers in Ireland and a heat capture system at one of our British sites.

We have completed our identification and modelling of the key climate risks and opportunities as part of TCFD and are working on how we embed risk mitigation actions into business as usual going forward.

Impact on the business

These risks could lead to a reduced availability and quality of raw materials, which could result in price rises or interruptions to supply. It could also mean increased regulation, for example extended producer responsibility and carbon pricing or a reputational impact arising from the failure to adequately address societal and stakeholder concerns.

Risk mitigation

- Water stewardship plan in place and current year projects on track.

- DRS project team and governance in place with modelling and scenario planning underway and we're working closely with the local administration body to ensure our approach is fit for purpose.

- For more on our approach and progress with our Healthier Planet strategy see pages 45-50.

- Our TCFD disclosure can be found on pages 51-64.

Market risk

Risk score movement from the prior year: Increased.

Risk description

Failure to develop and grow our business across our markets, increasing market share and generating the fuel for growth due to either our ability to execute our plans or external market factors (e.g. economic downturn).

Link to strategic objective: H, B, F, A

Risk owner

Business Unit Managing Directors

Change during the year and residual risk

We have delivered strong performance in the past 12 months, with underlying revenue growth of 15.5% and margin expansion of 10bps.

In Brazil, we have seen another year of significant growth, gaining market share in all key categories

including kids and coconut water. See page 66 for more on Brazil's performance.

However, the residual risk is increasing due to the cost of living crisis and rising inflationary pressure

means that forward category trajectory is more uncertain.

Impact on the business

This may lead to adverse impact on our financial position and future growth forecasts as we aren't able to grow and invest in the key drivers to support the delivery of our strategy.

Risk mitigation

- Strategic and annual planning process in place for business units and Group, including both reflection and re-appraisal of market drivers of the strategic plan.

- Regular management reviews to govern, monitor and amend plans, bringing together market, competitor and consumer insight.

Quality of our products and the health and safety of our people

Risk score movement from the prior year: No change.

Risk description

Risk that a faulty or contaminated product, either through malicious contamination, human error or

equipment failure, is supplied to the market. Risk associated with the health and safety of our employees, contractors and visitors.

Link to strategic objective: H, B, F, A

Risk owner

Business Unit Managing Directors

Change during the year and residual risk

Our total consumer complaint rate per million units sold was 2.61, slightly above the target of 2.30 set for the year.

We have implemented a third party horizon scanning tool enabling us to systematically identify and close gaps in HSE audits across all our sites.

AIB audit performance across Great Britain and Ireland manufacturing was good with our Leeds site

achieving their best unannounced audit score to date.

Impact on the business

This could result in reputational, regulatory and commercial impact to our business as the quality of

our products and the health and safety of our employees is of the utmost importance to us.

Risk mitigation

- Integrated quality, safety and environment (QSE) management system, Integrity, has been rolled out across all territories. This contains all QSE standards, site procedures and KPI reporting functionality.

- We have a technical specification tool for raw materials and packaging in Great Britain, Ireland and France and are rolling this out to Brazil in the next 12 months.

- Monthly zero harm forum in place, led centrally, for health and safety executive managers to share standards, monitor performance and share best practice.

- Group certification against FSSC 22000 was achieved across British, Irish and French production sites, while Brazil also maintained quality certification against ISO 22000.

Legal and Regulatory

Risk score movement from the prior year: No change.

Risk description

Non-compliance with local laws or regulations or breach of our internal policies and standards.

Link to strategic objective: H, B, F, A

Risk owner

General Counsel

Change during the year and residual risk

We have completed the implementation of a system to simplify and standardise our supplier contract

creation and are embedding effective contract management practices across the organisation.

The external environment means that residual risk is trending upwards given third party failure and contract default risk, but the strength of our controls means it remains the same as last year.

Impact on the business

Failure to comply with such requirements could have a significant impact on our reputation and/or incur financial penalties.

Risk mitigation

- Retention and investment, via promotions, in the in-house legal function responsible for ensuring compliance with all relevant legislation and regulations. It works closely with the rest of the business and external advisors and other key stakeholders regarding current, and changes to legislation.

- Regular compliance related training in place with data protection, whistleblowing and anti-bribery and corruption conducted this year.

- Horizon scanning process in place supported by two external firms to help the business assess the impact of potential and incoming legislation.

Technology and information security

Risk score movement from the prior year: No change.

Risk description

Disruption to business due to loss or failure of systems or exposure to loss of information or technology due to cyber attacks.

Link to strategic objective: H, B, F, A

Risk owner

Chief Financial Officer

Change during the year and residual risk

We are continuing to strengthen and improve our control environment by enhancing our external security testing and improving our site access controls for third parties. We also continue to invest in our operational technology so we're more aware of active threats and greater testing of our security controls.

Impact on the business

Disruption to our IT systems could have a significant impact on our sales, cash flows and profits. Additionally, cyber security breaches could lead to unauthorised access to, or loss of, sensitive information.

Risk mitigation

- Cyber risk desktop simulation exercises conducted. Identified continuous improvement actions to further strengthen our control environment are currently been worked on.

- Regular system and client security patching is in place including use of vulnerability scanning to identify security weakness via out of date software or missing security patches.

- Quarterly internal phishing campaigns are run and followed up with training and guidance.

- We have developed an assurance plan across IT to provide objective and external scrutiny of the control environment.

Treasury, tax and pension

Risk score movement from the prior year: Decreased.

Risk description

Britvic is exposed to a variety of external financial risks relating to treasury, tax and pensions.

Link to strategic objective: H, B, A

Risk owner

Chief Financial Officer

Change during the year and residual risk

Increased external risk driving upward trajectory on interest rates and volatility in foreign exchange. We remain well placed with our current controls, and experienced Treasury team to manage the risks effectively.

We are developing a full and comprehensive understanding of our legal position with respect to the M&B court ruling, in order to evaluate and understand the funding impact should Britvic ultimately lose the power to set an alternative rate of annual pension increase. See more details on our pension scheme on page 68.

The risk score has decreased due to a reduction in tax risk linked to regular testing and resolution of issues following the introduction of the plastic packaging tax.

Impact on the business

Changes to exchange rates and interest rates can have an impact on business results and the cost of

interest on our debt. Additionally, the British and Irish businesses have defined benefit pension plans

which, while closed to new employees, are exposed to movements in interest and inflation rates, values of assets and increased life expectancy.

Risk mitigation

- Monitoring of investment and funding strategies for the pension fund. Quarterly updates provided on the funding position to Trustees.

- Board approved foreign exchange and interest rate hedging policy to cover rolling 18-month period.

- Strong relationship management with tax authorities in the UK and accountancy firms (e.g. annual updates) and open dialogue with tax authorities to seek non-statutory clearances upfront where possible and ahead of inspections.

Talent

Risk score movement from the prior year: No change.

Risk description

Risk that the lack of the correct skills and capability and/or workforce resilience impact the business' ability to deliver ambitious plans for our long-term strategy.

Link to strategic objective: H, B, F, A

Risk owner

Chief People Officer

Change during the year and residual risk

Our employee feedback survey continued this year with 85% response rate achieved this year and over 5,000 individual comments. See pages 36-39 for more detail on Healthier People.

A focus on engagement and wellbeing for all with wellbeing roadshows delivered to all of our sites in

Great Britain and Ireland.

Impact on the business

We rely on key individuals to contribute to the success of Britvic, and we need our people to continue to develop and be fit for the future.

Risk mitigation

- Identification and retention of key talent through development and reward mechanisms.

- Regular employee surveys take place across the company to obtain employees feedback on a wide range of topics. This leads to constructive actions at both a central and individual team level.

- Internal development programmes are underway to build our talent pipeline. These will support the building of succession health to mitigate attrition risks.

Appendix B

Responsibility statement of the Directors in respect of the Annual Report

The Annual Report and Accounts 2022 contains a responsibility statement in compliance with DTR 4.1.12. This statement is set out on page 122 of the Annual Report and Accounts 2022 and is set out below in full and unedited text. This statement relates solely to the Britvic Annual Report and Accounts 2022 and is not connected to the extracted information set out in this announcement or the Preliminary Announcement.

The Directors confirm that to the best of their knowledge:

- The consolidated financial statements, prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 (and IFRSs adopted pursuant to Regulation (EC) No 1606/202 as it applies in the European Union), give a true and fair view of the assets, liabilities, financial position and profit of the parent company and undertaking included in the consolidation taken as a whole.

- The Annual Report, including the Strategic report, includes a fair review of the development and performance of the business and the position of the company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

- The Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company's position, performance, business model and strategy.

On behalf of the Board

Simon Litherland, Chief Executive Officer

Joanne Wilson, Chief Financial Officer