Britvic Annual Report 2007

FY2007 Annual Report · Britvic

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Britvic plc
Annual Report 2007

Contents

02 Our Brands
08 Chairman’s Statement
09 Operating and Financial Review
09 Chief Executive’s Review
14 Current Trading and Outlook
14 Financial and Business Review
18 Business Resources
19 Risks and Uncertainties

20 Corporate Responsibility
22 Board of Directors
24 Reports and Accounts Contents

25 Directors’ Report
29 Corporate Governance
33 Directors’ Remuneration Report
40 Independent Auditor’s Report
to the Members of Britvic plc
41 Consolidated Income Statement
42 Consolidated Balance Sheet
43 Consolidated Statement

of Cash Flows

44 Consolidated Statement
of Recognised Income
and Expense

45 Notes to the Consolidated

Financial Statements

85 Independent Auditor’s Report
to the Members of Britvic plc

86 Company Balance Sheet
87 Notes to the Company
Financial Statements
92 Shareholder Information

BR1-007_Front_end_07_vAW5 13/12/07 17:24 Page 1

Financial Highlights*

Total branded revenue £716.3m, up 5.7%

EBITDA1 £126.3m, up 4.4%

Operating proﬁt £80.0m, up 8.5%

Operating proﬁt margin 11.2%,
up 30 basis points

Free cash ﬂow2 £75.1m, £48.9m in 2006

Proﬁt before tax £61.3m, up 9.7%

Basic earnings per share 20.4p, up 10.9%

Full year dividend per share 11.0p

* Footnotes can be found on the inside back cover.

Britvic plc Annual Report 2007

BR1-007_Front_end_07_vAW5 13/12/07 17:20 Page 2

Britvic brands are synonymous with quality, and
parents know they can buy our drinks with conﬁdence.
With brands that appeal to all ages, our drinks keep
the whole family hydrated and happy every day.

Britvic plc Annual Report 2007

BR1-007_Front_end_07_vAW5 13/12/07 17:20 Page 3

It has been a particularly busy year for the Robinsons
brand. We have introduced two new ambient fruit
juices: Fruit Shoot 100% for children and Robinsons
Smooth Juice for the whole family. These new
juices, each available in three ﬂavours, require
no refrigeration or preservatives, thanks to our
investment in new production facilities.

In response to the growing trend towards more
natural products, we have redesigned the Robinsons
range of squashes with no artiﬁcial colours or
ﬂavours, plus distinctive new label designs.

Britvic plc Annual Report 2007

Britvic offers a wide range of drinks for all occasions.
Whether at home, in the pub, or out-and-about,
we provide great tasting drinks in a broad range
of ﬂavours and formats to meet everyone’s needs.

Britvic plc Annual Report 2007

This year the Britvic range of mixers and juices,
a part of many people’s night out, has been
redesigned and relaunched in stylish new packaging,
with some great new ﬂavours. Our well-received
not-from-concentrate fruit juices have also gone
through a make-over and are now even more
distinctive as ‘AJ’ and ‘OJ’.

J2O, Britvic’s leading on-premise brand, has
continued to prosper. Last year’s ‘limited edition’
Orange & Pomegranate proved so popular that it
has now been conﬁrmed as a permanent member
of the range.

Britvic plc Annual Report 2007

With iconic brands and innovative and stylish pack
designs, our products provide refreshment and
enjoyment for the young and the young at heart alike.

Britvic plc Annual Report 2007

This year has been a year of transition for a number
of our brands. Tango went into rehab and returned
with a new look and a new formulation, with reduced
sugar and no artiﬁcial colours or ﬂavours. And
Drench, our recently developed water brand, was
repositioned to ensure more mass market appeal,
with an emphasis on the beneﬁts of hydration.

Our relationship with PepsiCo continues to thrive,
with a continued emphasis on no-added sugar
varieties of both Pepsi and 7UP. New pack designs
for Pepsi have continued to refresh the brand image.

Britvic plc Annual Report 2007

Chairman’s Statement

Gerald Corbett
Chairman

The achievement
of a robust ﬁnancial
performance against
the background of
difﬁcult conditions
was the result
of successful
actions by our
management team.

Britvic plc Annual Report 2007

On 29 August 2007 we completed the
acquisition of Britvic Ireland. The business
has leading positions in a number of soft
drinks categories, great owned brands,
the PepsiCo relationship and a strong
management team. There are substantial
beneﬁts from the bringing together of
our two companies which should quickly
ﬂow through to ﬁnancial performance.

The strength of our market positions,
particularly in the growing stills section
of the market, our brands, our new
product development, our efﬁciency
programmes and the beneﬁts of our
Irish acquisition, give us conﬁdence for
another good year. This conﬁdence and
our cash ﬂow underpin the Board’s
decision to propose a ﬁnal dividend of
7.7p, making the total for the year 11.0p,
a 10% increase on the previous year.

On behalf of the Board I would like to
thank our executive team and all Britvic
employees for their hard work and
commitment during the year. This strong
result is to their credit, and gives us all
conﬁdence in a positive future.

Britvic’s proﬁt before tax, in its second
year as a public company, rose 9.7% to
£61.3m, on the back of revenue growth
of 5.7% to £716.3m. Earnings per share
rose 10.9% to 20.4p per share, and
cash ﬂow was strong with free cash
ﬂow generation of £75.1m (excluding
the impact of the acquisition of the
soft drinks and distribution businesses
of C&C Group plc (‘Britvic Ireland’)).
This was a strong set of results given
that the summer of 2007 was one of
the worst on record with the inevitable
impact on the soft drinks market.

The achievement of a robust ﬁnancial
performance against the background
of difﬁcult conditions was the result of
successful actions by our management
team. In sales terms, we out-performed
the British soft drinks market, building
on the strength of our brands, and our
innovation programme delivered in line
with expectations. The continued
improvements in our business processes
resulted in an increase in average realised
price. Costs, margins and cash were all
tightly controlled and we undertook the
outsourcing of our secondary distribution
network, stripping out signiﬁcant cost
from the business and allowing us to
concentrate on core activities. As the
impact of the poor summer weather
became clear, management rapidly
reconﬁgured the business for lower
levels of demand to produce a solid
second half performance.

The performance of Pepsi and 7UP, which
we bottle and market in Great Britain
(‘GB’), has been particularly pleasing.
Our programmes have delivered a healthy
volume and revenue performance.
PepsiCo is our major commercial partner
and our relationship, which dates back
over 20 years, has now been extended
to Ireland. We are committed to their
success and they to ours.

Operating and Financial Review
Chief Executive’s Review

Paul Moody
Chief Executive

11.0p

Full year dividend
per share.

£80.0m

Operating proﬁt.

In the 52 weeks ended 30 September
2007 Britvic’s brands have performed
well, actively growing market share
in key categories, despite the poor
summer weather which presented
extremely difﬁcult trading conditions
for the soft drinks market as a whole.
The out-performance of the market
has delivered strong revenue growth
of 5.7% to £716.3m including a ﬁve-
week contribution of £13.8m from
Britvic Ireland.

We have continued to deliver on our
strategy of improving average realised
price (‘ARP’) as we drive effective and
efﬁcient promotional activity, improving
operating margins, and proactively
managing the cost base. As a result
operating proﬁt is up 8.5%, proﬁt after
tax (‘PAT’) up 11.1% and earnings per
share (‘EPS’) up 10.9%, all before
exceptional items, but including the
ﬁve-week contribution from Britvic
Ireland. This has been achieved against
the backdrop of the poor summer
weather and challenging second half
2006 comparatives, which beneﬁted
from an above average summer and a
high level of promotional activity based
around the football World Cup.

Free cash ﬂow, before the acquisition of
Britvic Ireland, was £75.1m, £26.2m ahead
of the prior year, driven by a continued focus
on working capital and capital expenditure
management. Return on Invested Capital
(‘ROIC’) has increased by 370 basis points
to 20.7% reﬂecting the continued focus
on costs, cash ﬂow and the proactive
management of the Group’s asset base.
The Board is proposing a ﬁnal dividend per
share of 7.7p bringing the full year dividend
per share to 11.0p, an increase of 10%
on the prior year. This reﬂects the Board’s
conﬁdence in the future prospects of the
business and the underlying cash generative
nature of its activities.

The soft drinks market
The soft drinks market volumes were
down 2.6% over the period due
entirely to the poor summer weather
and challenging second half 2006
comparatives. However, the fundamentals
of the soft drinks market continue to
show growth.

During the ﬁrst half of 2006 there was
a general move by consumers towards
healthier and better-for-you food and
beverage which was reﬂected in a swing
away from full-sugar carbonates to stills
and non-added-sugar carbonates. In 2007,
as the year developed, there was some
reversal to a more balanced position
across both categories. Inevitably, the
poor summer weather in the second half
of the year has illustrated the market
susceptibility to extreme conditions.
Importantly, the distribution of volume
over the full year reﬂects the historical
trends with the exception of the summer
period. Experience shows that market
growth tends to recover more slowly
after a weak summer as consumption
trends remain lower. The market
experienced this during 2007, where the
weak market during the summer has
impacted the autumn market performance.

Against this general market background,
Britvic has out-performed the market in
all of its key categories during the period:

• The cola market was down 0.8%,

while Pepsi outperformed this with
a 6.7% volume increase, resulting
in a 1.6 percentage point increase
in market share.

• The squash market was down 2.5%,
particularly impacted by the summer.
Robinsons squash outperformed
the market with 0.7% volume
growth, increasing market share
by 1.3 percentage points, led by
our emphasis on our large pack
promotional programme.

During the period stills market volumes
were down 3.4%, against Britvic stills
volumes up 3.8%, and carbonates market
volumes were down 1.6%, against Britvic
carbonates volumes up 2.0%.

Britvic plc Annual Report 2007

Operating and Financial Review
Chief Executive’s Review

Total GB Take-Home

Total sales £6.0bn

Britvic 11%

Coca-Cola Enterprises 26%

GlaxoSmithKline 8%

Danone 6%

Tropicana 5%

All other 44%

Total GB Licensed On-Trade

Total sales £2.4bn

Britvic 44%

Coca-Cola Enterprises 35%

Red Bull 4%

All other 17%

Source: AC Nielsen Scantrack data to
29 September 2007 and Licensed On-Trade
data to September 2007 total coverage MAT.

Britvic plc Annual Report 2007

Britvic’s strategy
Management action has focused
on three main areas:

Supporting and growing our
core brands
We continue to invest in our strong
portfolio of brands through both
innovation and media, to ensure that
they are preferred by consumers.

The Pepsi brand has continued to gain
share of the cola market, with an increase
of 1.6 percentage points on last year.
The success enjoyed by the brand in
the period reﬂects strong promotional
execution across all key customers and
a major brand Pepsi redesign that
capitalised on the trend for personal
customisation, with multiple designs for
each variant being available – the designs
change on a regular basis to ensure that
the most contemporary themes are
reﬂected on the packs. The growth in
market share was also achieved against a
background of continued heavy competitor
activity and with no adverse impact on
ARP, despite our growing presence in the
discounters sector. Our close working
relationship with the brand owner PepsiCo
has been instrumental in achieving this
performance. During the year, Pepsi Max,
has had considerable success from
a taste campaign which has driven trial
and frequency in all sales channels.
Supporting this has been the upgrade
and re-launch of the Pepsi Max website.

Robinsons squash has consolidated
its number one position in its category
despite the challenging environment this
year for squash. This has been achieved
partly as a consequence of the new
large-pack production facility, which has
unlocked our ability to drive large-pack
performance through increased
promotional competitiveness, and has
allowed us to grow our two-litre volume
share. Also during the year we have
launched the re-designed ‘no artiﬁcial
colours and ﬂavours’ family squash range
with the ‘Raise them on Robinsons’
campaign, aimed at ensuring that the
brand retains its authoritative category
leading position. This year the brand will
sponsor the BBC Sports Personality of
the Year event. This is the ﬁrst headline
sponsorship of the event and will include
the ‘Robinsons Unsung Hero Award’.
The sponsorship will be supported by
an on-pack promotion across everyday
squash in the ﬁrst quarter of the year.

Fruit Shoot, the number one kids’ juice
drink has once again grown its market
share and is now in more households than
any other kids’ juice drink. The ‘no artiﬁcial
colours or ﬂavours’ radio campaign has
driven penetration to its highest levels
since October 2005.

In the adult category, J2O continues to
lead and drive the growth in its category,
with 7% year on year growth helped
by its strongest ever Christmas. This
success has been partly driven by ﬂavour
and format innovation initiatives, including
the continued rollout of the PET pack;
the successful re-launch of Orange &
Pomegranate as the sixth ﬂavour addition
to the core range; and the introduction
of large packs for at home entertaining.
Our brand communications including the
‘If H2O were J2O’ campaign across TV,
cinema and digital platforms have helped
to reinforce the brand’s position with
its core consumers. Next year, we plan to
continue to communicate with consumers
in key periods such as the run up to
Christmas; to expand the brand into
more sociable occasions with new
pack formats from early Summer 2008;
and to introduce a new variant ‘Apple
and Blueberry’ in the Spring.

BR1-007_Front_end_07_vAW5 13/12/07 17:20 Page 11

1.4bn

Litres total soft
drinks sold during
the period.

In water, Fruit Shoot H2O has
consolidated its position as the number
one kids’ water brand, with an average
12 weekly rate of sales some three times
higher than any other kids’ water brand.
It has very strong distribution at 77%,
excellent repeat rates at 41%, and its
cannibalisation of other Fruit Shoot
variants is low with half of the brand’s
consumers being new to the Fruit Shoot
brand. Drench has been re-focused on
the take-home market, with a successful
re-launch in a new packaging format in the
convenience and impulse channels in the
spring. This was supported by the ‘Your
brain is 75% water’ advertising campaign
which successfully grew brand awareness.
Pennine Spring has been effectively
re-focused on the licensed and food
service sectors with volume growth of
8.8% against last year and is now the
third largest and one of the fastest growing
brands in managed licensed outlets.

Our International business has achieved
improved results, with further distribution
gains for Robinsons squash in the recent
launch markets of Sweden and Denmark
and impressive growth from Fruit Shoot
in the Netherlands. In the Netherlands
we have developed a brand new TV
campaign which made Fruit Shoot the
second most recognised kids’ drink
advertised this summer. The great early
success from Robinsons in Denmark
and Sweden has led to the launch of
Robinsons High Juice in Finland, designed
to further build the scale of our business
in the Nordic region. Distribution of 65%
was achieved within the ﬁrst eight weeks
of launch and with a full launch campaign,
including TV advertising and in-store
sampling, the brand achieved a 4%
market share after just 12 weeks.

Innovating/developing new products
A number of new brands, brand
extensions and new packaging concepts
were launched in the year, with the
aim of establishing Britvic in the growth
segments of the market. All were
launched as planned and all are performing
in line with our expectation. The launches
are focused around the four key themes
of naturalness, health and well-being,
occasionality and indulgence.

The two major new innovation launches
this year were Robinsons Smooth Juice
and Fruit Shoot 100% Juice, both playing
to the natural agenda with no artiﬁcial
colours and ﬂavours or preservatives.
There is no doubt that the weak summer
had a detrimental effect on the scale and
speed of consumer pick-up on these two
launches, but considering this impact, both
have performed in line with expectations.

Robinsons Smooth Juice has built
its distribution rapidly through a £2.6m
marketing investment in TV and in-store
execution, followed by a £2.5m
investment in consumer sampling, radio
and press in the ﬁrst half of FY08. Fruit
Shoot 100% Juice has achieved the
highest value share for a branded kids’
juice after just 12 weeks in the market
with a rapid distribution build, thanks
to a £1.5m marketing investment in TV
and outdoor media. We remain conﬁdent
in the future success of these brands as
they are entirely relevant to the target
consumer; they reﬂect the increased
emphasis on natural foods and are
supported by the tenth largest grocery
brand in the country, Robinsons.

Britvic mixers and juices continue to
strengthen their overall position, being
the leaders in the juice category and
level with our main competitor in the
mixers category. The key initiatives
during this period have been the launch
in non-returnable bottles; various range
extensions including the launch of
Cranberry and Pomegranate juices; and
the re-launch of the not-from-concentrate
100% juice range in November 2007,
which is now branded OJ and AJ with
a more modern brand image.

Britvic plc Annual Report 2007

Operating and Financial Review
Chief Executive’s Review

Managing efﬁciency – improving
margins and free cash ﬂow
Our Business Transformation Programme,
which we described at the time of
ﬂotation as being focused on driving
improved efﬁciency and building
capability, is delivering against both
objectives with £11m of annualised
savings having been made prior to the
start of this year. Such has been the
success of the Business Transformation
Programme that we have delivered an
incremental £5m savings in FY07, being
£1m ahead of the £4m originally planned
for FY07, and are on course to deliver
a further £2m in FY08.

We continue to drive our Product Value
Optimisation (‘PVO’) programme and have
delivered £2m of savings in the year as
a result of the introduction of in-house
large pack PET squash bottles at our
Norwich factory and other vertical
integration projects.

In addition to this, as previously
announced, we expect to see incremental
annualised savings of £5–6m by FY09
as a consequence of the outsourcing of
the secondary distribution network and
vending and chiller re-manufacturing
operations, at a one-off exceptional cost
of circa £3m incurred during the period.
This will also reduce capital expenditure
requirements by £2–3m from FY08. As
a consequence of this transaction, we
have disposed of our depot in Tamworth,
the only remaining freehold site within
the secondary retail distribution network,
at a net cash consideration of £9m.

Britvic plc Annual Report 2007

Expansion into Europe – acquisition of
the soft drinks and related businesses
of C&C Group plc (‘Britvic Ireland’)
During the period we acquired the soft
drinks and distribution businesses of
C&C Group plc for €249.2m (£169.5m)
in cash. The acquisition of Britvic Ireland
has provided us with the opportunity to
accelerate our growth as well as a leading
position in both the Republic of Ireland
and Northern Ireland. There is potential
for annual pre-tax synergies of €14m;
brand and product expansion and
innovation. It has also provided us with
an experienced senior management team
and opportunities to further develop the
owned brands and the Pepsi and 7UP
brands in these markets. It is only three
months since the completion of the deal
and we have found nothing to dampen
our enthusiasm.

The transaction included the following
operational structure: two factories in
Dublin and Cork; the Ballygowan water
source in Limerick; the distribution and
wholesale business which gives us the
opportunity to a key route in a dynamically
different licensed market; the Logistics
Centre in Dublin with additional
warehouses in Belfast and Cork; and
a number of small regional depots in
the north west and south east of Ireland.
The business is a good ﬁt for Britvic –
it is a brand-based business, and also has
the Pepsi franchise in Ireland. The brands
include the water brand Ballygowan –
the number one water brand in Ireland,
7UP, Club (including Club Energise and
Club Mixers) as well as the Britvic brand
for mixers and juices in the Republic.

The transition process is progressing well.
As we said when we announced the deal,
our plans for integration centred on the
retention of the experienced senior
management team in Ireland. This has
been achieved with the business set up
to run as a commercially autonomous unit
but with support from GB. Transitional
service agreements were put in place for
IT, Finance and C&C in Northern Ireland.
We have now completed separation of
the Finance operation, with IT separation
on target to be completed in late
November. The Irish business that has
historically been included within Britvic
International, predominantly Robinsons
and Fruit Shoot, is in the process of being

integrated into the Britvic Ireland
infrastructure and we are on target
for full integration by 31 January 2008.
Finally, the group function previously
carried out by C&C Group has been
successfully ﬁlled.

We remain conﬁdent in the previously
announced annual pre-tax synergies
of €14m and the following progress
has been made:

• On procurement we have identiﬁed

cost savings, and have started to align
certain contracts – for example, our
PET and can procurement where Britvic
GB terms are superior; and sugar where
Britvic Ireland’s terms are superior.

• Production harmonisation project

is underway.

• Overhead and Logistics synergies have
also been identiﬁed on the integration
of Britvic International (‘Ireland’).

Summary
We have grown market share across
all of our key categories with a strong
performance from our brands despite
difﬁcult trading conditions in the second
half of the year. The installation of our
ﬁrst aseptic line facilitated the major
innovation launches of the year, namely
Robinsons Smooth Juice and Fruit Shoot
100% Juice, and all innovation was
delivered on time and as planned.

Our focus on managing costs and driving
efﬁciency has been relentless, and in
addition to the positive contributions
from our Business Transformation and
PVO programmes, the outsourcing of
our secondary retail distribution network
has been implemented in line with our
plan and expectations. Consequently,
after adjusting for the ﬁve-week
contribution from Britvic Ireland, we
have delivered a 40 basis point increase
in operating proﬁt margin, some way
ahead of our 10–15 basis point ambition.
While it is only three months since the
completion of the Britvic Ireland
acquisition we are most encouraged
by the performance of the team and
the business and energised by the
opportunities that lie ahead.

BR1-007_Front_end_07_vAW5 13/12/07 17:20 Page 13

Introducing Britvic Ireland
The acquisition of a soft drinks business in Ireland represented
an important step in the strategic development of Britvic
and has opened up opportunities for supply chain synergies,
brand and product expansion, and innovation.

Total Ireland Take-Home

Britvic Ireland 29%

Coca-Cola Bottlers 35%

GlaxoSmithKline 14%

Danone 7%

All other 15%

Total Ireland Licensed On-Trade

Britvic Licensed Wholesale 37%

Coca-Cola Bottlers 41%

Red Bull 9%

GlaxoSmithKline 6%

Gleesons 5%

All other 2%

Source: AC Nielsen Scantrack data to
November 2007 and Licensed On-Trade data
to September 2007 total coverage MAT.

Market dynamics
The deal is set to be earnings
enhancing in the ﬁrst full year before
integration costs with the cost of
capital covered in the second full year.

Britvic Ireland is an excellent ﬁt with
Britvic’s existing business. The brand
proﬁles of each are very similar with
a good spread of juices, water, squashes
and carbonates, while both companies
hold the franchises for Pepsi and 7UP in
their respective territories. The acquisition
also reunites the Britvic brand in GB and
Ireland. Britvic Ireland operates its own
wholesale and distribution network, a vital
route to market in a country with a largely
independent pub sector.

Company facts
• Second largest branded soft drinks

business in Ireland.

• Turnover €269.9m for the year

ended 27 February 2007.

• Number one brand in four soft

drink categories.

• Operates its own wholesale and

distribution network.

• Based in Dublin with facilities

across Ireland.

• The on-premise channel is the

biggest proﬁt driver.

Business integration
• Acquisition completed 29 August 2007.

• Key senior management team retained
and business run largely autonomously
with support from GB.

• Existing Britvic International operations
in Ireland on course to be merged by
end of January 2008.

Integration – key ﬁgures
• Anticipated annual pre-tax synergies

of around €14m:
– €3m through revenue efﬁciencies.
– €11m through cost efﬁciencies.

• One-off integration costs to achieve
these synergies in the region of
€20–25m including €10m ‘catch up’
maintenance capital expenditure.

Brand highlights 06/07
• Britvic’s successful J2O brand

introduced in Ireland in October
2007 focused at ﬁrst on licensed
on-premise and food service with
planned media support.

• Ballygowan’s award winning

‘Bodies Never Lie’ TV campaign
drove continued growth in the brand.

• H2OH!, a naturally ﬂavoured water from
7UP, was launched in April with good
early signs, capitalising on the success
of 7UP Free in Ireland.

• GDA labelling was rolled out in

mid 2007 with completion planned
for mid-2008.

• Stimulant drink Energise Edge launched
in September 2007 with encouraging
early sales.

Britvic plc Annual Report 2007

Operating and Financial Review
Current Trading
and Outlook

Operating and Financial Review
Financial and Business Review

The conditions in the soft drink market
continued to be challenging at the
beginning of our new ﬁnancial year,
reﬂecting the normal residual impact
of a poor summer. However, the
fundamentals of the market remain
strong and the market has shown
modest growth in recent weeks.

Against this background, Britvic has
continued to grow its top line in the
period since its year-end, and we remain
conﬁdent that we are well positioned for
the year ahead, building on the recent
acquisition of Britvic Ireland, further cost
saving opportunities and a continued
focus on the innovation pipeline.

• Return on invested capital (‘ROIC’) –

ROIC is a performance indicator used by
Management and deﬁned as operating
proﬁt after tax before exceptional items
as a percentage of invested capital.
Invested capital is deﬁned as non-
current assets plus current assets less
current liabilities, excluding all balances
relating to interest bearing liabilities and
all other assets or liabilities associated
with the ﬁnancing and capital structure
of the Group and excluding any deferred
tax balances.

Overview
In the period Britvic out-performed
the soft drinks market in all of its key
categories with strong revenue growth up
5.7% to £716.3m, including the ﬁve-week
contribution from Britvic Ireland. Adjusting
for the £13.8m contribution from Britvic
Ireland, revenue growth was 3.7% to
£702.5m with total volumes up 2.7%.

Operating proﬁt before exceptional items
for the period was up 8.5% to £80.0m
with operating proﬁt margin also showing
improvement at 11.2% up 30 basis
points. Excluding the £0.8m contribution
from Britvic Ireland, operating proﬁt was
up 7.5% at £79.2m with operating proﬁt
margin up strongly by 40 basis points to
11.3%. PAT for the period was £44.0m,
up 11.1% on the prior period, with EPS
up 10.9%. The following narrative on
stills, carbonates and our International
business does not include the ﬁve-week
contribution from Britvic Ireland.

The following discussion is based
on Britvic’s results for the 52 weeks
ended 30 September 2007 (‘the
period’) compared with the same
period last year.

Key performance indicators
The principal key performance indicators
that management uses to assess the
performance of the Group in addition
to income statement measures of
performance are as follows:

• Volume growth – increase in number
of litres sold by the Group relative to
prior period.

• Average Realised Price (‘ARP’) –
average revenue per litre sold.

• Revenue growth – increase in sales
achieved by the Group relative to
prior period.

• Brand contribution margin – revenue

less material costs and all other
marginal costs that Management
considers to be directly attributable
to the sale of a given product, divided
by revenue. Such costs include brand
speciﬁc advertising and promotion
costs, raw materials, and marginal
production and distribution costs.
Management uses the brand
contribution margin to analyse Britvic’s
ﬁnancial performance, because it
provides a measure of contribution
at brand level.

• Operating proﬁt margin – operating
proﬁt before exceptional items and
before the deduction of interest and
taxation divided by revenue.

• Free cash ﬂow – net cash ﬂow

excluding movements in borrowings,
dividend payments and non-cash
exceptional items.

Britvic plc Annual Report 2007

£716.3m

Total branded
revenue.

Stills

52 weeks ended
30 September 2007
£m

52 weeks ended
1 October 2006
£m

Volume (millions litres)
ARP per litre
Revenue
Brand contribution
Brand contribution margin

463.4

72.1p

334.3
154.7

46.3%

446.5

72.1p

321.7
152.0

47.2%

% change

3.8
0.0
3.9
1.8
(0.9)%pts

In stills we have seen a continued solid
out-performance against the market
across all key categories during the period
with revenue growth of 3.9% to £334.3m.
Volumes were up 3.8% against a market
which was down 3.4%, having been
severely impacted by the exceptionally
poor weather in the second half.

This strong performance was driven by:

• J2O, core Fruit Shoot and Robinsons

squash consolidating their positions as
market leading brands, with Robinsons
large pack performing particularly well.
• H2O, our kids’ water brand continuing

to grow strongly.

• The relaunch of Drench as our take-home
water brand showing promising signs.
• Pennine Spring displaying good growth,
now being the third largest on-premise
water brand.

ARP was ﬂat on the year with the second
half impacted by the growth in water
volumes and Robinsons large pack.
The ARP for water is more in line with
the company average which is lower than
the stills ARP. Although Robinsons large
pack ARP is lower than the one-litre packs
the brand contribution margin is now very
similar following our investment in this
area earlier in the year.

Brand contribution margin is down
0.9 percentage points at 46.3%. Stills
have been affected by increasing input
costs such as juice, although this has
been mitigated to some extent by our
PVO programme. The margin decline
also reﬂects the focus of an increasing
proportion of our Advertising &
Promotional (‘A&P’) spend on our
stills brands.

Carbonates

52 weeks ended
30 September 2007
£m

52 weeks ended
1 October 2006
£m

Volume (millions litres)
ARP per litre
Revenue
Brand contribution
Brand contribution margin

865.3

39.6p

342.6
136.4

39.8%

848.3
39.2p

332.5
130.1

39.1%

% change

2.0
1.0
3.0
4.8
0.7%pts

Carbonates have delivered a solid
performance over the period with revenue
growth of 3.0% to £342.6m. This
performance has been driven by further
market share gains by Pepsi and a strong
performance from 7UP. Revenue also
beneﬁted from the distribution gains in
the increasingly important discounters
sector made in the period which shows
a similar ARP and margin proﬁle to the
rest of the business.

A continued focus on promotional
effectiveness, especially over the poor
summer where we backed away from
chasing volumes that were not there,
combined with improved price mix, led
to ARP being up 1.0% over the period.

Direct product costs are slightly up over
the year although this is more about ﬁrst
half FY06 costs being low, due to pack
mix, than an actual price increase in
the products themselves. Costs were
in fact fairly constant at 22.8p per litre
throughout this year.

Brand contribution margin increased by
0.7 percentage points due to less A&P
spend, as spend has been redirected
to the stills brands which has more than
offset any increases in direct product
costs and hence margin continues
to trend upwards.

Britvic plc Annual Report 2007

Operating and Financial Review
Financial and Business Review continued

£75.1m

53.6% free cash
ﬂow improvement
on last year.

Britvic plc Annual Report 2007

International

52 weeks ended
30 September 2007
£m

52 weeks ended
1 October 2006
£m

Volume (millions litres)
ARP per litre
Revenue
Brand contribution
Brand contribution margin

37.7
68.0p
25.7
8.3
32.3%

35.8
65.6p
23.5
7.0
29.8%

% change

5.3
3.7
9.4
18.6
2.5%pts

Our International business continues
to deliver a strong performance with
revenue growth of 9.4% to £25.7m.
This has been driven by the consolidation
of our strong market position in the
Netherlands, Denmark and Sweden,
as well as our entry into the Finnish
market with Robinsons dilutes.

The increase in brand contribution margin
of 2.5 percentage points can be explained

by the growing contribution from major
country launches in FY06 which attracted
high launch costs that year.

Direct product cost increases of 4.9%
are a direct result of juice cost increases
which were not mitigated here with PVO
savings (as there are few large PET sales
compared to GB) and also the cost of
exporting growing volumes to the new
Scandinavian markets.

Costs and overheads

52 weeks ended
30 September 2007
£m

52 weeks ended
1 October 2006
£m

Non brand A&P
Fixed supply chain
Selling costs
Overheads and other

Total

Total A&P spend
A&P as a % of net revenue

(7.0)
(66.2)
(85.7)
(61.3)

(220.2)

(46.7)

6.6%

(6.1)
(68.0)
(86.0)
(55.3)

(215.4)

(44.6)

6.6%

% change

(14.8)
2.6
0.3
(10.8)

(2.2)

(4.7)
0.0

Overall, we have maintained our
investment in total A&P in line with FY06
to continue our long-term brand building
programme. However, spend continues
to be below our stated aim of circa 7%
as we modiﬁed our A&P programme in
the second half of the year in response
to the poor summer market conditions.

Fixed supply chain costs are down by circa
£2m due to the beneﬁt of our business
transformation cost savings programme.

The slight decrease in selling costs
despite increased revenue can be
explained by strong management action
to reduce costs in response to the poor
summer weather. Some of these costs
will clearly need to be reinstated in FY08.

The increase in overheads and other
of circa £6m is due to a £8m short-term
bonus provision reﬂecting the strong
revenue and proﬁt performance over
the period and a £2m decrease in costs,
due to a sharp focus on costs, again
in response to the poor summer
trading conditions.

Exceptional items
During the period, Britvic incurred
exceptional operating costs and proﬁts
which net to £5.7m in total. The main
elements of this comprised:

• Restructuring costs of £8.1m:

– Circa £2m resulting from the £5m

Business Transformation Programme
overhead cost savings achieved during
FY07 and relating principally to
redundancy costs and advisor fees.
– Circa £3m relates to the outsourcing
of the secondary distribution network
announced during the year. This was
initially identiﬁed as an exceptional
cost for FY08 but the acceleration
of the project has brought it forward
into FY07.

– Circa £3m relates to the costs
associated with the sale of our
Tamworth Depot.

• A £1.2m cost relates to the acquisition
of Britvic Ireland and represents those
items involved in getting the sale and
purchase agreement signed that cannot
be capitalised onto the balance sheet.

• A £3.1m cost relates to transitional
award shares vesting under the
Performance Share Plan (‘PSP’).

• A £2.1m returnable bottle impairment.

• £3.4m relates to the proﬁt on disposal
from the sale of our Tamworth Depot.

• £5.6m relates to a pension curtailment

gain relating to employees who
transferred to KN Drinks Logistics due
to the outsourcing of our secondary
distribution network.

Interest
The net ﬁnance charge before exceptional
items for the period for the Group was
£18.7m compared with £17.8m in the
same period in the prior year. Adjusting
for the impact of Britvic Ireland of
approximately £0.8m, interest is broadly
in line with last year at £17.9m.

Taxation
The tax charge of £17.3m before
exceptional items represents an effective
tax charge of 28.2%. The effective tax
rate as reported in the accounts for
the previous year was 29.2%. Including
the effect of exceptional items, the
effective tax rate was 23.6%, which
is lower than last year’s rate of 33.7%,
due to the non-taxable proﬁts made
on the sale of our Tamworth depot and
a reduction in the UK corporation tax
rate for FY08 affecting the deferred tax.

Earnings per share
Basic EPS for the period, excluding
exceptional items, was 20.4p, up 10.9%
on EPS for the same period last year of
18.4p. Basic EPS (after exceptional items)
for the period was 19.7p compared with
11.2p for the same period last year.

Dividends
The Board is recommending a ﬁnal
dividend for 2007 of 7.7p per share.
Together with the interim dividend of
3.3p per share paid on 29 June 2007,
this gives a total dividend for the year of
11.0p per share, an increase of 10.0%
on the dividend paid last year. Subject
to approval at the Annual General
Meeting (‘AGM’), the total cost of the
dividend for the year will be £22.2m
and the ﬁnal dividend will be paid on
15 February 2008 to shareholders on
record as at 7 December 2007.

Cash ﬂow and net debt
Free cash ﬂow was £75.1m, before
adjusting for Britvic Ireland, £26.2m ahead
of the prior year, driven by a continued
focus on working capital and capital
expenditure management. Including
Britvic Ireland, there was a cash outﬂow
of £92.6m compared to a cash inﬂow
of £48.9m in the prior year, driven by
the purchase itself.

Additional contributions were made to the
deﬁned beneﬁt pension scheme of £10m
in the year (2006: £30m). At 1 October
2007, the Group’s net debt was £403.6m
compared to £282.6m at 1 October 2006.
The increase in borrowings of £121.0m
was principally due to the acquisition of
Britvic Ireland.

Capital employed
Non-current assets increased in the year
from £316.0m to £487.3m due in the
main to the acquisition of Britvic Ireland.

Depreciation decreased in the year
by £1.5m to £36.8m. The reduction
on the prior year reﬂects the level of
disposals made in the year, the sale
of the Tamworth depot being the
primary contributor.

Current assets also increased from
£151.1m to £202.5m, again reﬂecting the
acquisition of Britvic Ireland. Comparing
prior year like-for-like numbers, inventories
have remained at the same level and
receivables have reduced slightly.

At the same time current liabilities
increased from £171.4m to £223.2m
driven principally by an increase in
trade and other payables. The acquisition
of Britvic Ireland has contributed to
this increase.

ROIC, excluding Britvic Ireland, has
improved to 20.7% from 17.0% in FY06
reﬂecting the continued focus on costs,
cash ﬂow and the proactive management
of the Group’s asset base.

Share price and market capitalisation
At 30 September 2007 the closing share
price for Britvic plc was 323p. The Group
is a member of the FTSE 250 index with
a market capitalisation of approximately
£843m at the period end.

Treasury management
The ﬁnancial risks faced by the Group
are identiﬁed and managed by a central
Treasury department. The activities of
the Treasury department are carried out
in accordance with Board approved
policies and are subject to regular audit
and Treasury Committee scrutiny.
The department does not operate
as a proﬁt centre.

Key ﬁnancial risks faced by the Group
include exposures to movement in:

• Interest rates.

• Foreign exchange.

• Commodity prices.

Britvic plc Annual Report 2007

Operating and Financial Review
Financial and Business Review continued

Operating and Financial Review
Business Resources

The Treasury department is also
responsible for the management of
the Group’s debt liquidity, currency
requirements and cash. A key activity
in the period was to replace around
£229m of bank-based borrowings with
the proceeds of a private placement.
The issue of the placement, largely
in the US, had the following features:

Britvic is one of the two leading
branded soft drinks businesses in
GB and Ireland. It is one of the top
two soft drinks businesses in the GB
take-home channel, is the leading
soft drinks supplier to the GB licensed
on-trade and is a signiﬁcant player
with a growing presence in the leisure
and catering channel.

• A maturity ranging from seven to

twelve years;

The main resources the Group uses
to achieve its results are:

• An extensive and balanced portfolio

of stills and carbonates brands, including
Robinsons, Pepsi, 7UP, Tango, J2O,
Britvic, Fruit Shoot, R Whites and
Pennine Spring. The breadth and depth
of Britvic’s portfolio enables it to target
consumer demand across a wide range
of consumption occasions, in all the
major soft drinks categories and across
all relevant routes to market. The
strength of Britvic’s brand portfolio
is underpinned by its consumer insight
and product development capability
which has consistently enabled it to
produce innovative products, packaging
formats and promotional activity
designed to meet evolving consumer
tastes and preferences. During the
period we acquired the soft drinks and
distribution businesses of C&C Group
plc for €249.2m (£169.5m) in cash
(‘Britvic Ireland’). Britvic Ireland owns
a number of leading brands in the
Republic of Ireland and Northern Ireland,
including Club, Ballygowan water,
Britvic, Cidona, MiWadi, and Energise
Sport, as well as the rights to the
Pepsi and 7UP brands.

• Sterling and US dollar proceeds
(the latter swapped to sterling);

• All proceeds on an effective ﬁxed-
interest rate basis after taking into
account the effects of the interest
rate swap arrangements.

At 30 September 2007, the Group’s net
debt of £403.6m consisted of £195.3m
drawn under the Group’s committed
bank facility, £13.1m of drawings under
uncommitted bank facilities and £223.7m
of private placement notes. This was
netted off with £27.3m of surplus cash
and £1.2m of issue costs of loans.

Pensions
The Group operates a pension scheme,
which has both a deﬁned beneﬁt fund
and a deﬁned contribution fund. The
deﬁned beneﬁt section of the scheme
was closed on 1 August 2002, and since
this date new employees have been
eligible to join the deﬁned contribution
section of the scheme. As a result of
the full actuarial valuation carried out as
at 31 March 2004, further contributions
of £30m were made in March and
December 2005 and an additional
£10m in December 2006. Additional
contributions of £10m per annum will
be made in December 2007 to 2010
(total of £40m) in order to further reduce
the funding deﬁcit in the scheme.

The Group IAS 19 deﬁcit at the full year
was £5.6m. Excluding Britvic Ireland,
there is an IAS 19 surplus at the full year
of £9.1m (£65.8m deﬁcit at 1 October
2006). The change from a deﬁcit to
a surplus is mainly due to changes in
actuarial assumptions applied as at
30 September 2007. It should be noted
that this is an accounting valuation and
is subject to high volatility.

Britvic plc Annual Report 2007

• A successful long-standing relationship

with PepsiCo that resulted in the
Exclusive Bottling Agreement (‘EBA’)
being renewed in GB in 2004 for a
further 15 years, with an extension to
2023 on admission to the London Stock
Exchange. The acquisition of Britvic
Ireland has further strengthened this
relationship with the EBA for Ireland
lasting until 2019. This relationship gives
Britvic the exclusive right to distribute
the Pepsi and 7UP brands in GB and
Ireland, access to all new carbonated
drinks developed by PepsiCo for
distribution in GB and Ireland and,
to support the development of its
carbonates offering, access to PepsiCo’s
consumer and customer insight,
competitor intelligence, marketing best
practice, brand and product development
expertise and technological know-how.

• A strong customer base. In take-home,
Britvic’s customers include the ‘Big 4’
supermarkets (Tesco, J Sainsbury,
Asda and Morrisons) together with a
number of other important grocery
retailers. The Group has signiﬁcant
supply arrangements with a number of
key players in the GB pub sector and
leisure and catering channels. Through
Britvic International, the Group has built
on the success of the Robinsons and
Fruit Shoot brands by introducing these
products into markets outside GB.

• Britvic also has a well-invested and
ﬂexible production capability and a
recently outsourced distribution network
that, according to AC Nielsen, enabled
its soft drinks to be made available to
consumers at over 96% of the points of
sale (on a sterling-weighted value basis)
in the GB take-home and over 94%
of the points of sale of the licensed
on-trade channels in 2007.

BR1-007_Front_end_07_vAW5 13/12/07 17:20 Page 19

Operating and Financial Review
Risks and Uncertainties

The Group’s results of operations could
be materially adversely affected by:

Risks relating to the market
• A change in consumer preferences,

perception and/or spending.

• Poor economic conditions and weather.

• Potential impact of the smoking ban
or other regulatory developments.

• Actions taken by competition authorities
or private actions in respect of supply
or customer arrangements.

• Actions by the Group’s competitors.

Risks relating to the ordinary shares
There are risks arising out of an
investment in ordinary shares because of:

• US holders potentially not being able

to exercise pre-emptive rights.

• Potential share price volatility.

• Sterling dividend payments giving

rise to currency exposure for investors
whose principal currency is not sterling.

• PepsiCo’s right to terminate the EBAs

on a change of control which may affect
the ability of a third party to make a
general offer for the ordinary shares.

Risks relating to the Group
• A decline in certain key brands.

• A termination or variation of its bottling
and distribution arrangements with
PepsiCo or an adverse development
in the PepsiCo relationship.

• A further consolidation in its

customer base.

• Any interruption in, or change in the

terms of, the Group’s supply of
packaging and raw materials.

• Any failure in the processes or the IT
systems implemented as part of the
Business Transformation Programme.

• Any inability to protect the intellectual
property rights associated with its
current and future brands.

• Contamination of its raw materials

or ﬁnished products.

• Litigation, complaints or adverse

publicity in relation to its products.

• Loss of key employees.

• Any increase in the Group’s funding
needs or obligations in respect of
its pension scheme.

• Any failure or unavailability of the
Group’s operational infrastructure.

• Changes in accounting principles

or standards.

Robinsons Squash
consolidated its
number one position
with new large pack
production driving
volume share.

Britvic plc Annual Report 2007

Corporate Responsibility

At Britvic we seek to evolve our
Corporate Responsibility (‘CR’)
agenda in a way that is strategic
and transparent.

Our commitment
Our commitment, approved by the
plc Board and Executive Committee,
addresses the key issues of environment,
workplace, supply chain, marketplace
and community.

Common goals
Employees from across the business
contribute to our CR goals, which is
guided by a Corporate Responsibility
Committee. Membership of the CR
Committee is drawn from different areas
of the business and includes places for
employee volunteers, rotated year-by-
year. This underlines that corporate
responsibility is not just an activity for
experts, but an area that must engage
the energies of all our people.

A transparent programme
Our CR roadmap sets out our targets
for the year and who is responsible for
delivering them. To increase transparency
we have made the document freely
available on britvic.com The road map
identiﬁed 15 topics on which we
committed to make substantive progress
in the year. In the event 12 were
fully achieved and we are making good
progress on the remaining items.

The following sections identify some
of the signiﬁcant milestones in our CR
progress this year.

Environment
Britvic’s environment policy is now
available on Britvic.com In addition, we
have set clear targets for reduction in
key performance areas (see table).

Key environmental activities in the year
included the installation of new high
efﬁciency boilers at our Norwich and
Huddersﬁeld factories, major projects
to re-use hot water at our factory in
Chelmsford, improvements to our air
compressor control systems, and the
introduction of waste segregation and
recycling in non-production sites.

Packaging is an important environmental
issue and we have produced an annual
saving of over 1,300 tonnes of plastic
packaging in the year and eliminated
PVC from our range. In addition, we
were the ﬁrst soft drinks company to
join WRAP, a government sponsored
partnership that encourages efﬁcient
materials use and recycling.

Workplace/employees
This was the year of embedding our
new core purpose with employees,
and empowering them to get more
involved with CR activities.

We undertook a review of our current
employment policies to ensure that they
match best practice and reﬂect the spirit
of Britvic’s values. Thirteen individual
policies were reviewed, renewed and
updated. As part of this review, we
launched a new volunteering policy,
focused on the development of our

2007 targets and achievements

Energy
kWh per tonne produced

Efﬂuent
M3 per tonne produced

Water
M3 per tonne produced

Landﬁll solid waste
Kg per tonne produced

Accidents frequency rate
per 100,000 hours worked

2007
target

–2%

–7%

–5%

2007
result

–9.4%

–7.2%

–6.0%

–15.7%

–27.9%

John Gibney
Finance Director

We were the ﬁrst
soft drinks company
to join WRAP,
a government
sponsored
partnership that
encourages efﬁcient
materials use
and recycling.

Britvic plc Annual Report 2007

people and building on the great work our
employees were already undertaking in
our communities.

Our policies ensure that health and safety
issues are considered a priority against
commercial decisions and we have
succeeded in reducing accidents again
this year. Our injury rate now stands at
only 38% of the industry benchmark
rate. Further new health and safety
initiatives are planned that will build
on achievements in this area for the
beneﬁt of all employees.

For the ﬁrst time we asked our employees
what they thought of our CR efforts as
part of our annual employee opinion
survey. This will enable us to benchmark
employee engagement with CR on a
year-on-year basis.

Our policies ensure that health and safety
issues are considered equally against
commercial decisions. Our new health
and safety committee will build on
achievements in this area for the beneﬁts
of all employees.

Supply chain
During the year we became members of
Supplier Ethical Data Exchange (‘SEDEX’).
We audited our seven GB factories and
made key data available through the
SEDEX system, connecting us to our
suppliers, and enabling continuous
improvements in ethical performance.

We set ourselves two big supply chain
targets for 2007:

• Conduct a strategic risk analysis across

key direct suppliers to Britvic.

• Review the audit process for all

new suppliers.

We achieved them both.

We launched our ethical trading policy to
all direct suppliers and for 100 of our top
suppliers we conducted a risk analysis.

Marketplace/consumers
Guideline Daily Amount (‘GDA’) labelling
was rolled out across our range over the
course of the year. This industry-led
scheme lists the amount of sugar, fat,
saturates and salt, and details the number
of calories present in each serving.
Labels also give the percentage of the
guideline daily amount for each nutrient.

The future
We have now developed a clarity of
approach in our CR programme driven
by issue and opportunity analysis, target
setting and delivery. The purposeful cross-
functional working and the enthusiasm
of those directly involved in delivering
our targets is being directed next year
towards achieving more stretching targets.

Plans for the year include publishing an
on-line CR report, detailing full analysis of
our year’s achievements as well as areas
for improvement, an issues-led consumer
education programme, developing a zero
waste to landﬁll strategy, investigating the
sustainability of agricultural practices in
growing our key fruit crops and delivering
an employee well-being action plan.

The thorough, committed CR work done
by our employees this year gives us
a springboard for future action.

Service to the consumer has been
extended through the provision of
on-pack contact details for our consumer
helpline currently rolling out across all
our products.

Throughout the year we have been
working on a number of brand-related
CR initiatives that will be launched in our
2007–2008 ﬁnancial year. The ﬁrst of
these, a partnership between the Really
Wild Drinks Co and The Rainforest
Alliance, launched in October 2007 and a
£25,000 donation from the brand will give
young indigenous people in the Cameroon
rainforest better access to education.

Community
In 2007 we improved the management
and measurement of our community
investment, promoted our employee
giving schemes, such as payroll giving
and our matched funding scheme,
as well as launched a new product
donation scheme.

The London Benchmarking Group (‘LBG’)
is generally accepted as being the
standard methodology for measuring and
managing company community
programmes. We have not only adopted
LBG methodology but also trained LBG
champions at each of our sites.

Our work with schools has been
reinforced through our school tool kit
which many of our employees use when
volunteering to present to school children,
or when we host schools at our factories.
The kit is aimed at ﬁve to nine year olds
and has been made generally available
through our website.

Britvic plc Annual Report 2007

Board of Directors

Britvic plc Annual Report 2007

2 Paul Moody (50)
Chief Executive
Paul Moody became Chief Executive
upon the Company’s ﬂotation in
December 2005 and is responsible for
the day-to-day running of the business.
Prior to that he had held a number of
senior roles including Managing Director
and Chief Operating Ofﬁcer. Paul Moody
joined Britvic in 1996 as Director of Sales
for grocery multiples (supermarkets)
having previously worked for Golden
Wonder and Pedigree Pet Foods. Paul
Moody is also currently the President
of the British Soft Drinks Association.

5 Joanne Averiss (44)
Non-Executive Director
Joanne Averiss was appointed a Non-
Executive Director on 18 November 2005
and is the PepsiCo Nominee Director.
Joanne Averiss has been a member of
the PepsiCo legal department since 1990,
holding a series of positions in the UK
and the US and most recently acting as
the Head of Legal (UK and Europe) for
PepsiCo International’s food and snack
beverages division. She is also a Trustee
and Chair of the Mesen Educational Trust.

1 Gerald Corbett (56)
Independent Non-Executive Chairman
Gerald Corbett has been Non-Executive
Chairman of the Company since
24 November 2005 and also chairs
the Nomination Committee. He is
Chairman of SSL International plc and
Moneysupermarket.com Group Plc,
and is a Non-Executive Director of
Greencore Group plc based in Dublin.
He is also Chairman of the Board of
Trustees of the Royal National Institute
for the Deaf. Gerald was Chairman of
the Woolworths Group plc from 2001
to June 2007, Chief Executive of Railtrack
plc from 1997 to 2000, Group Finance
Director of Grand Metropolitan plc from
1994 to 1997 and was Group Finance
Director of Redland plc between 1987
and 1994. He was a Non-Executive
Director of the property group MEPC plc
from 1995 to 1998 and Burmah Castrol
plc from 1998 to 2000.

4 Chris Bulmer (49)
Independent Non-Executive Director
Chris Bulmer was appointed a Non-
Executive Director on 24 November 2005
and chairs the Remuneration Committee.
She is also a member of the Audit and
Nomination Committees. Prior to joining
Britvic, Chris Bulmer was from 2001
to 2003 the Group Human Resources
Director for Brambles Industries plc and
Brambles Industries Limited, and prior
to that was Group Human Resources
Director for Whitbread Group plc. Chris
Bulmer has also worked for Diageo,
Mars, Unilever and Blue Circle. She is
also an Independent Trustee Director
of Berkeley Square Pension Trustee
Company Limited.

3 John Gibney (47)
Finance Director
John Gibney was appointed Finance
Director in 1999 and is responsible for
ﬁnance, IT, legal, estates, risk management
and business transformation. Prior to
joining Britvic, John Gibney was Senior
Corporate Finance & Planning Manager
for Bass PLC, and prior to that role,
Finance Director and subsequently
Deputy Managing Director of Gala Clubs.

6 Michael Shallow (53)
Independent Non-Executive Director
Michael Shallow was appointed a Non-
Executive Director on 24 November 2005
and chairs the Audit Committee. He is
also a member of the Nomination and
Remuneration Committees. He is, in
addition, a Non-Executive Director of
Domino’s Pizza UK & IRL plc and Spice
plc. Previously he was Finance Director
of Greene King plc from 1991 to 2005
and prior to that was an associate partner
with Andersen Consulting and held a
senior accounting role at Kingﬁsher plc.

7 Bob Ivell (55)
Senior Independent
(Non-Executive) Director
Bob Ivell was appointed a Non-Executive
Director on 24 November 2005 and is the
Company’s Senior Independent Director.
He is a member of the Audit, Nomination
and Remuneration Committees. Prior to
joining Britvic, Bob Ivell was on the board
of Scottish & Newcastle plc as Chairman
of the Retail Division. He is currently the
Executive Chairman of Regent Inns Plc,
Chairman of Next Generation Clubs
Limited and a Director of Next (Holdings)
Limited. During the 1980s Bob Ivell was
the Managing Director of Beefeater.

Britvic plc Annual Report 2007

Report and Accounts

25 Directors’ Report
29 Corporate Governance
33 Directors’ Remuneration Report
40 Independent Auditor’s Report to

the Members of Britvic plc

41 Consolidated Income Statement
42 Consolidated Balance Sheet
43 Consolidated Statement of Cash Flows
44 Consolidated Statement of Recognised

Income and Expense

45 Notes to the Consolidated

Financial Statements

85 Independent Auditor’s Report to

the Members of Britvic plc

86 Company Balance Sheet
87 Notes to the Company
Financial Statements
92 Shareholder Information

Britvic plc Annual Report 2007

Directors’ Report
For the ﬁnancial year ended 30 September 2007

The Directors are pleased to present their report and the consolidated ﬁnancial statements of the Company and its subsidiaries
for the ﬁnancial year ended 30 September 2007.

Principal activities
The Group trades principally as a manufacturer and distributor of soft drinks.

Review of activities
A detailed review of the Group’s activities and of future plans is contained within the Chairman’s Statement on page 8
and the Chief Executive’s Review and Operating and Financial Review on pages 9 to 19.

Results and dividends
The Group’s proﬁt for the ﬁnancial year before taxation attributable to the equity shareholders amounted to £55.6m
(2006: £36.5m) and the proﬁt after taxation amounted to £42.5m (2006: £24.2m).

An interim dividend for the current year of 3.3p per ordinary share was paid on 29 June 2007.

The Directors are proposing a ﬁnal dividend for the current year of 7.7p per share. This will be paid on 15 February 2008
to shareholders on the register at close of business on 7 December 2007, subject to shareholder approval.

Directors
The following were Directors of the Company during the ﬁnancial year ended 30 September 2007: Gerald Corbett, Paul Moody,
Joanne Averiss, Chris Bulmer, John Gibney, Bob Ivell and Michael Shallow.

In accordance with Article 79 of the Company’s Articles of Association none of the current serving Directors are required to offer
themselves for re-election until the AGM in 2010. Their biographical details are set out on pages 22 and 23 of this report.

Directors’ interests
The Directors’ interests in ordinary shares of the Company are shown within the Directors’ Remuneration Report on
pages 33 to 39. No Director has any other interest in any shares or loan stock of any Group company.

Other than Joanne Averiss, who is a director of a number of PepsiCo’s subsidiaries, no Director was or is materially interested
in any contract other than his service contract, subsisting during or existing at the end of the ﬁnancial year which was signiﬁcant
in relation to the Group’s business. Further details of Joanne Averiss’ appointment are set out on page 29 in the Corporate
Governance section of the Annual Report.

As at the date of this report, indemnities are in force under which the Company has agreed to indemnify the Directors, to the
extent permitted by law and the Company’s Articles of Association, in respect of all losses arising out of, or in connection with,
the execution of their powers, duties and responsibilities as Directors of the Company or any of its subsidiaries.

Directors’ remuneration
The Remuneration Committee, on behalf of the Board, has adopted a policy that aims to attract and retain the Directors needed
to run the Group successfully. The Directors’ Remuneration Report is shown on pages 33 to 39.

Annual General Meeting
Details of the Company’s forthcoming AGM are set out in a separate circular which has been sent to all shareholders with
this report.

Employee involvement
The Group uses a number of ways to engage employees on matters that impact them and the performance of the Group.
These include annual roadshows at key sites conducted by members of the Executive Committee, regular team meetings,
the publication of a bi-monthly internal newsletter, ‘The Mag’, together with the ‘b.link’ intranet site containing easy access to
the latest company information as well as company policies and vacancies. This year the Company launched formal quarterly
business performance updates for employees, which are cascaded by line managers. An Employee Involvement Forum was
established in 2004 through which nominated representatives ensure that employees’ views are taken into account regarding
issues that are likely to affect them. In addition, where the Company has entered into a recognition agreement with a Trade
Union, it fulﬁls its obligations to consult and negotiate accordingly. The Group approaches these relationships from a partnership
perspective. A robust employee opinion survey process is also in place to ensure that employees are given a voice in the
organisation and that the Group can take action based on employee feedback.

Britvic plc Annual Report 2007

Directors’ Report continued

All eligible employees are able to participate in the Britvic Share Incentive Plan which gives them the opportunity to purchase
ordinary shares in the Company using money deducted from their pre-tax salary and to receive matching shares from the
Company up to a maximum of £75 per four week pay period.

Britvic Ireland has a number of well established employee involvement mechanisms including team brief cascades to all
employees, newsletters and Trade Unions.

Equal opportunities
The Group is committed to providing equality of opportunity to all employees without discrimination and applies fair and equitable
employment policies which ensure entry into and progression within the Group. Appointments are determined solely by
application of job criteria and competency.

Disabled persons
Disabled persons, whether registered or not, have equal opportunities when applying for vacancies, with due regard to their
aptitudes and abilities. In addition to complying with legislative requirements, procedures ensure that disabled employees are
fairly treated in respect of training and career development. For those employees becoming disabled during the course of their
employment, the Group is supportive, whether through retraining or redeployment, so as to provide an opportunity for them
to remain with the Group, wherever reasonably practicable.

Supplier payment policy
The Group agrees terms and conditions for its business transactions with suppliers. Payment is made in accordance with these
terms provided the supplier meets its obligations. The average number of days of payments outstanding for the Group at the
ﬁnancial year end was 30 (2006: 41).

Political contributions
During the year the Group and its subsidiaries made no political contributions.

Charitable donations
During the year the Group has contributed £17,187 (2006: £36,491) to communities in the UK.

Major shareholders
As at 28 November 2007, the Company had been notiﬁed of the following major shareholdings.

Snowdon Acquisitions Limited
AXA S.A.
Barclays PLC
PepsiCo, Inc
J.P. Morgan Chase & Co.
Newton Investment Management Limited
Legal & General Group plc
Deutsche Bank AG
Aviva plc & its subsidiaries

Number of
ordinary shares

Per cent

30,207,082
25,530,380
15,099,229
10,739,120
10,576,107
10,178,856
8,845,302
6,546,894
6,507,470

13.98
11.82
6.99
4.97
4.89
4.71
4.09
3.03
3.01

Where not provided previously in this Directors’ Report, the following provides the additional information required for
shareholders as a result of the implementation of the Takeovers Directive into English law.

As at 30 September 2007, the Company’s issued share capital comprised a single class of shares referred to as ordinary shares.
Details of the ordinary share capital can be found in Note 22 to the ﬁnancial statements.

On a show of hands at a general meeting of the Company every holder of ordinary shares present in person and entitled to vote
shall have one vote and on a poll, every member present in person or by proxy and entitled to vote shall have one vote for every
ordinary share held. The notice of the AGM speciﬁes deadlines for exercising voting rights and appointing a proxy or proxies to
vote in relation to resolutions to be passed at the general meeting. All proxy votes are counted and the numbers for, against or
withheld in relation to each resolution are announced at the AGM and published on the Company’s website after the meeting.

Britvic plc Annual Report 2007

There are no restrictions on the transfer of ordinary shares in the Company other than:

• Certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws).

• Pursuant to the Listing Rules of the Financial Services Authority whereby certain employees of the Company require

the approval of the Company to deal in the Company’s ordinary shares.

Resolution 9, which will be proposed as a Special Resolution at the 2008 AGM, will give the Company authority to use its
available cash resources to acquire up to 21,600,000 of its own shares in the market for either cancellation or to hold them as
treasury shares. The Directors will only use this power after careful consideration, taking into account market conditions prevailing
at the time, other investment opportunities, appropriate gearing levels, and the overall position of the Company. The Directors
will only purchase such shares after taking into account the effects on earnings per share and the beneﬁts for shareholders.

IFG Trust (Jersey) Limited, as Trustee of the Britvic Employee Beneﬁt Trust, holds 1.03% of the issued share capital of the
Company as at 28 November 2007 in trust for the beneﬁt of the Executive Directors, senior executives and managers of the
Group. The voting rights in relation to these shares are exercised by the Trustee. The Trustee may vote or abstain from voting
the shares or accept or reject any offer relating to shares, in any way it sees ﬁt, without incurring any liability and without being
required to give reasons for its decision. It may take all or any of the following matters into account:

• The long-term interests of beneﬁciaries;

• Interests of beneﬁciaries other than ﬁnancial interests;

• Interests of beneﬁciaries in their capacity as employees or former employees or their dependants;

• Interests of persons (whether or not identiﬁed) who may become beneﬁciaries in the future; and

• Considerations of a local, moral, ethical, environmental or social nature.

The Trustee may not accept any offer relating to the shares without the prior written consent of the Company.

Under the rules of the Britvic Share Incentive Plan (the ‘Plan’) eligible employees are entitled to acquire shares in the Company.
Plan shares are held in trust for participants by Equiniti Share Plan Trustees Limited (the ‘Trustees’). Voting rights are exercised
by the Trustees on receipt of participants’ instructions. If a participant does not submit an instruction to the Trustees no vote
is registered. In addition, the Trustees do not vote on any unawarded shares held under the Plan as surplus assets. As at
28 November 2007, Equiniti Share Plan Trustees Limited held 1.97% of the issued share capital of the Company.

The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities
and/or voting rights.

There are no agreements between the Company and its Directors or employees providing for compensation for loss of ofﬁce
or employment (whether through resignation, purported redundancy or otherwise) that occurs because of a takeover bid. The
Company’s banking arrangements are terminable upon a change of control of the Company. Certain other indebtedness becomes
repayable if a change of control leads to a downgrade in the credit rating of the Company. The Company’s agreements with
PepsiCo are terminable upon a change of control, details of which are included on page 19.

The Company’s Articles of Association may only be amended by a Special Resolution at a general meeting of shareholders.
At the 2008 AGM a Special Resolution will be put to shareholders proposing amendments to the Company’s existing Articles
of Association in relation to the provisions of the new Companies Act 2006.

It is the Group’s objective to manage its ﬁnancial risk so as to minimise the adverse ﬂuctuations in the ﬁnancial markets on the
Group’s reporting proﬁtability and cash ﬂows. The speciﬁc policies for managing each of the Group’s main ﬁnancial risk areas
are detailed in Note 27 to the ﬁnancial statements.

Statement of Directors’ responsibilities in relation to the ﬁnancial statements
The Directors have chosen to prepare the Financial Statements for the Group in accordance with International Financial Reporting
Standards (‘IFRS’) as adopted by the European Union, and for the Company in accordance with United Kingdom Generally
Accepted Accounting Practice (‘UK GAAP’).

In the case of UK GAAP ﬁnancial statements, English company law requires the Directors to prepare ﬁnancial statements for
each ﬁnancial period, which give a true and fair view of the state of affairs of the Company as at the end of the ﬁnancial period
and of the proﬁt or loss of the Company for that period. In preparing those ﬁnancial statements, the Directors are required to:

• Select suitable accounting policies and then apply them consistently;

• Make judgements and estimates that are reasonable and prudent;

Britvic plc Annual Report 2007

Directors’ Report continued

• State whether applicable accounting standards have been followed; and

• Prepare the ﬁnancial statements on a going concern basis unless it is inappropriate to presume that the Company will continue

in business.

In the case of IFRS ﬁnancial statements, IAS1 requires that the ﬁnancial statements present fairly for each ﬁnancial period
the Group’s ﬁnancial position, ﬁnancial performance and cash ﬂows. This requires the faithful representation of the effects of
transactions, other events and conditions in accordance with the deﬁnitions and recognition criteria for assets, liabilities, income
and expenses set out in the International Accounting Standards Board’s ‘Framework for the preparation and presentation of
ﬁnancial statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS.
Directors are also required to:

• Properly select and apply accounting policies consistently;

• Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable

information; and

• Provide additional disclosures when compliance with the speciﬁc requirements in IFRS is insufﬁcient to enable users
to understand the impact of particular transactions, other events and conditions on the entity’s ﬁnancial position and
ﬁnancial performance.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
ﬁnancial position of the Company and to enable them to ensure that the ﬁnancial statements comply with the Companies Act
1985. They are also responsible for the system of internal controls, for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.

Directors’ statement as to disclosure of information to auditors
So far as each Director is aware, there is no relevant audit information (as deﬁned by the Companies Act 1985) of which the
auditors are unaware. Each Director has taken all steps that ought to be taken by a Director to make themselves aware of
and to establish that the auditors are aware of, any relevant information.

A copy of the ﬁnancial statements is placed on the Company’s website. The maintenance and integrity of this website is
the responsibility of the Directors. The work carried out by the auditors does not involve consideration of these matters and
accordingly, the auditors accept no responsibility for any changes that may have occurred to the ﬁnancial statements since
they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of ﬁnancial statements may differ from legislation
in other jurisdictions.

Financial Statements
After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group overall have
adequate resources to continue operating for the foreseeable future. Accordingly, these ﬁnancial statements have been prepared
on a going concern basis.

Ernst & Young LLP have indicated their willingness to accept reappointment as auditors of the Company and a resolution
proposing their reappointment is contained in the Notice of AGM and will be put to the shareholders at the AGM.

By Order of the Board

John Price
Company Secretary
28 November 2007

Britvic plc Annual Report 2007

Corporate Governance

Introduction
The Company is committed to high standards of corporate governance and supports the principles laid down in the revised
Combined Code on Corporate Governance as issued by the Financial Reporting Council on 27 June 2006 (the ‘Code’). This
statement describes how the principles of the Code are applied and reports on the Company’s compliance with the Code’s
provisions.

The Directors consider that the Company has been in compliance with the provisions of the Code throughout the year ended
30 September 2007 and to the date of this report.

Board of Directors
The Board currently has seven members, comprising the Non-Executive Chairman, Chief Executive, Finance Director, three
further independent Non-Executive Directors and the PepsiCo nominated Non-Executive Director. All of the Directors bring strong
judgement to the Board’s deliberations. The Board is of sufﬁcient size and diversity that the balance of skills and experience is
considered to be appropriate for the requirements of the business. With the exception of the PepsiCo nominated Non-Executive
Director, Joanne Averiss, the Non-Executive Directors are all independent of management and free from any business or other
relationship, including those relationships and circumstances referred to in provision A.3.1 of the Code that could materially
interfere with the exercise of independent and objective judgement. In addition to her ﬁduciary obligations to act in the best
interests of the Company, Joanne Averiss is required under her letter of appointment to discharge her duties in the interests
of the Company notwithstanding her connection with PepsiCo. The Company considers that, on appointment, the Chairman
was independent for the purposes of provision A.3.1 of the Code. The Non-Executive Directors have all been appointed for
a three-year term. The senior independent Non-Executive Director, Bob Ivell, is available to shareholders if they have concerns
which contact through the normal channels of Chairman, Chief Executive or Finance Director has failed to resolve or for which
such contact is inappropriate.

At all times since listing there has been a majority of Non-Executive independent Directors on the Board, in compliance with
Code provision A.3.2.

The biographical details of the Board members are set out on pages 22 and 23. The Directors have all occupied, or occupy, senior
positions in UK and/or non-UK listed companies and have substantial experience in business. The Non-Executive Directors do
not participate in any of the Group’s pension schemes or in any of the Group’s bonus, share option or other incentive schemes.
All Directors must stand for election at the ﬁrst AGM after they are appointed. The Articles provide that all Directors will stand
for re-election at least every three years.

The Board is collectively responsible for the proper management of the Company. The Board normally meets ten times each
ﬁnancial year and has a formal schedule of matters reserved to it for decision making, including the approval of annual and interim
results, annual budgets, material acquisitions and disposals, material agreements and major capital commitments. The Company
Secretary maintains a record of attendance at Board meetings and Committee meetings, further details of which are set out on
page 31. During the year the Chairman met with the Non-Executive Directors without the Executive Directors present.

Board members are given appropriate documentation in advance of each Board or Committee meeting. This normally includes
a detailed report on current trading and full papers on matters where the Board will be required to make a decision or give its
approval. Speciﬁc business-related presentations are given when appropriate.

There is an established procedure for the preparation and review, at least annually, by the Board of medium-term plans and the
annual budget. The business reports monthly on its performance against its agreed budget. The Board receives a monthly update
on performance and reviews any signiﬁcant variances on a monthly basis. All major investment decisions are subject to post-
completion reviews.

In line with agreed procedures, the Chairman has conducted interviews with each Director and assessed their individual
performance. The Chairman has carried out an evaluation of the performance of the Board as a whole and of each Committee
and, led by the senior independent Non-Executive Director, the Non-Executive Directors have assessed the performance of the
Chairman taking into account the views of the Executive Directors. The conclusions of those assessments have been presented
to the Board by the Chairman and the senior independent Non-Executive Director. The evaluation process is designed to cover
Board processes, the structure and capability of the Board, strategic alignment, board dynamics and the skills brought to the
Board by each Director.

The Board has approved a procedure for Directors to take independent professional advice at the Company’s expense, if
necessary. In addition, the Directors have direct access to the advice and services of the Company Secretary, who is responsible
for ensuring that Board procedures are followed. Both the appointment and removal of the Company Secretary are matters
for the Board as a whole. The Company Secretary is responsible for preparing and implementing an induction programme for
Board appointees, including guidance as to their duties, responsibilities and liabilities as a Director of the Company and business
familiarisation. Business familiarisation involves Directors visiting sites in the UK and giving the Directors the opportunity to meet

Britvic plc Annual Report 2007

Corporate Governance continued

senior managers around the business. They also have the opportunity to discuss organisational, operational and administrative
matters. Every Director has access to appropriate training as required subsequent to appointment. The Company provides
Directors’ and Ofﬁcers’ insurance cover, in line with normal market practice, for the beneﬁt of Directors in respect of claims
arising in the performance of their duties.

The different roles of the Chairman and Chief Executive are acknowledged. A responsibility statement for each of those roles
has been agreed with the Chairman and Chief Executive respectively and adopted by the Board. The Non-Executive Chairman
is primarily responsible for the workings of the Board and ensuring that its strategic and supervisory role is achieved and for
ensuring effective communication with shareholders. The Board has delegated appropriate responsibilities to the Executive
Committee who are responsible for the day-to-day running of the business, carrying out agreed strategy and implementing
speciﬁc Board decisions relating to the operation of the Group.

Board Committees
There are a number of standing Committees of the Board to which various matters are delegated. The Committees all have
formal Terms of Reference that have been approved by the Board which are available on the Group’s website (www.britvic.com).
Details are set out below:

The Nomination Committee
The Nomination Committee comprises Chris Bulmer, Bob Ivell and Michael Shallow and is chaired by Gerald Corbett. The
Committee meets as necessary and is responsible for considering and recommending to the Board persons who are appropriate
for appointment as Executive and Non-Executive Directors. There is a formal, rigorous and transparent procedure for the
appointment of new Directors to the Board. This process involves the Nomination Committee interviewing suitable candidates
who are proposed by either existing Board members or by an external search company. Careful consideration is given to ensure
appointees have enough time available to devote to the role and that the balance of skills, knowledge and experience on the
Board is maintained. When dealing with the appointment of a successor to the Chairman, the senior independent Non-Executive
Director will chair the Committee instead of the Chairman. When the Committee has found a suitable candidate, the Chairman of
the Committee will make a proposal to the whole Board and the appointment is the responsibility of the whole Board following
recommendation from the Committee.

The Remuneration Committee
The Remuneration Committee comprises Bob Ivell and Michael Shallow and is chaired by Chris Bulmer. It is responsible for: (i)
making recommendations to the Board on the Group’s policy on the remuneration of the Company’s Chief Executive, Chairman,
the Executive Directors, the Company Secretary and other senior executives; (ii) the determination, within agreed terms of
reference, of the remuneration of the Chairman and of speciﬁc remuneration packages for each of the Executive Directors and
other senior executives, including pension rights, any compensation payments and beneﬁts; and (iii) the determination of
employee share plans. It meets at least three times a year. Full details of its activities and of Directors’ remuneration are set out
in the Directors’ Remuneration Report on pages 33 to 39. Those pages detail compliance with the legal requirements with regard
to remuneration matters. The Chairman of the Committee reports the outcome of meetings to the Board.

The Audit Committee
The Audit Committee comprises Chris Bulmer and Bob Ivell and is chaired by Michael Shallow. The Board is satisﬁed that
Michael Shallow, who is a Chartered Accountant and was until December 2005 Finance Director of Greene King plc, has recent
and relevant ﬁnancial experience as required by the Code.

The role of the Audit Committee is to monitor the integrity of the Group’s interim and annual ﬁnancial statements prior to their
submission to the Board. It is also responsible for reviewing the Group’s internal ﬁnancial control and risk management systems,
advising the Board on the appointment of external auditors, overseeing the relationship with the external auditors, approving
auditor remuneration, reviewing the Group’s whistle blowing procedures, reviewing accounting policies and compliance and
monitoring and reviewing the effectiveness of the Group’s full internal audit function.

The Committee had three meetings in the year during which it discharged its responsibilities as set out in its terms of reference
and schedule of business for the year. On each occasion the Finance Director and the Head of Internal Audit and Risk attended
through invitation. The external auditors attended all three of the meetings.

Signiﬁcant areas of review during the year included the implementation of a new risk management and internal control
framework. Outputs of this process were also reviewed at each of the Committee’s meetings. The Committee also received
comprehensive reports from the Head of Internal Audit and Risk on the results and progress of the internal audit plan.

Britvic plc Annual Report 2007

The Audit Committee regularly monitors the relationship with the auditors and assesses their performance, cost-effectiveness,
objectivity and independence. It agrees the scope of the audit work and discusses the results of the full year audit and interim
review each year. The Committee met three times with the external auditors without management present.

It is a speciﬁc responsibility of the Audit Committee to ensure that an appropriate relationship is maintained between the Group
and its auditors. The Group has a policy of controlling the provision of non-audit services by the external auditors in order to
maintain their independence and ensure that their objectivity and independence are safeguarded. This control is exercised by
ensuring non-audit projects, where fees are expected to exceed £50,000, are subject to the prior approval of the Chairman of
the Audit Committee and the Finance Director. If non-audit project fees are expected to exceed £150,000 the prior approval
of the Audit Committee is required. The Committee has scrutinised the internal procedures of Ernst & Young LLP and satisﬁed
itself that the independence and objectivity of the auditors are not affected by the non-audit work undertaken.

The Audit Committee made use of this policy during the year in connection with the acquisition of the C&C Soft Drinks business
in Ireland. The decision to use Ernst & Young for the due diligence work instead of another accountancy ﬁrm was taken on the
basis that they would provide a more effective service given their considerable knowledge of Britvic, the complexity of the
transaction and the desired timeframe for completion. However, it should be noted that several other pieces of signiﬁcant work
were assigned to other accountancy ﬁrms during the year where it was deemed that previous knowledge of the Group was
not a pre-requisite.

Attendance at meetings
The attendance of Directors at Board and Committee meetings during the year ended 30 September 2007 was as follows:

Gerald Corbett
Paul Moody
Joanne Averiss
Chris Bulmer
John Gibney
Bob Ivell
Michael Shallow

Total number of meetings

Board

11
11
11
10
11
11
11

Nomination
Committee

Remuneration
Committee

Audit
Committee

2
–
–
2
–
2
2

–
–
–
4
–
3
4

–
–
–
3
–
3
3

Shareholder relations
The Company is committed to maintaining good communications with shareholders. Senior executives, including the Chairman,
Chief Executive and Finance Director, have dialogue with individual institutional shareholders in order to develop an understanding
of their views which is fed back to the Board. General presentations are given to analysts and investors covering the annual and
interim results. The Operating and Financial Review set out on pages 9 to 19 details the ﬁnancial performance of the Company as
well as setting out the risks it faces and plans for the future. The Company Secretary generally deals with questions from individual
shareholders. All shareholders will have the opportunity to ask questions at the Company’s AGM on 30 January 2008. At the AGM,
the Chairman will give a statement on current trading conditions. The Chairmen of the Audit, Remuneration and Nomination
Committees will be available to answer questions at the AGM. The Chairman will advise shareholders on proxy voting details.
In addition, the Group’s website containing published information and press releases can be found at www.britvic.com

Britvic plc Annual Report 2007

Corporate Governance continued

Internal control
The Board has overall responsibility for the Group’s system of internal control and risk management and for reviewing its
effectiveness. In discharging that responsibility, the Board conﬁrms that it has established the procedures necessary to apply
the Code, including clear operating procedures, lines of responsibility and delegated authority. These procedures have been in
place since the Company listed and are regularly reviewed by the Board.

Business performance is managed closely and the Board and the Executive Committee have established processes, as part
of the normal good management of the business, to monitor:

• Strategic plan achievement, through a regular review of progress towards strategic objectives;

• Financial performance, within a comprehensive ﬁnancial planning and accounting framework, including budgeting and

forecasting, ﬁnancial reporting, analysing variances against plan and taking appropriate management action;

• Capital investment and asset management performance, with detailed appraisal, authorisation and post investment reviews; and

• Principal risks and risk management processes, which accords with the Turnbull guidance and is supported by reports from

the Head of Internal Audit and Risk that the signiﬁcant risks faced by the Group are being identiﬁed, evaluated and appropriately
managed, having regard to the balance of risk, cost and opportunity. The Executive Committee review the Group risk register
on at least a quarterly basis, with the Board reviewing on at least a semi-annual basis.

In addition, the Audit Committee received:

• Reports from the Head of Internal Audit and Risk on the work carried out under the annual internal audit plan; and

• Reports from the external Auditors.

Through the monitoring processes set out above, the Board has conducted a review of the effectiveness of the system of
internal control during the ﬁnancial year ended 30 September 2007. The system of internal control is designed to manage, rather
than eliminate, the risk of failure to achieve business objectives and it must be recognised that it can only provide reasonable and
not absolute assurance against material misstatement or loss. In that context, the review, in the opinion of the Board, did not
indicate that the system was ineffective or unsatisfactory and the Board is not aware of any change to this status up to the
approval of this report.

Britvic plc Annual Report 2007

Directors’ Remuneration Report
For the year ended 30 September 2007

The following is a report by the Remuneration Committee (the ‘Committee’) which has been approved by the Board of Britvic plc
for submission to shareholders. This report has been prepared in accordance with the Companies Act 1985. It provides the
Company’s statement of how it has applied the principles of good governance relating to Directors’ remuneration and is
intended to communicate Britvic’s policies and practices on executive remuneration to the Company’s major shareholders
and relevant institutions.

In accordance with the Companies Act 1985, a resolution will be submitted to the AGM to approve the Directors’
Remuneration Report.

Membership of Remuneration Committee
During the year, the Committee consisted wholly of independent Non-Executive Directors: Chris Bulmer (Chairman of the
Committee), Bob Ivell and Michael Shallow. At the invitation of the Chairman of the Committee, the Chairman of the Board,
the Chief Executive Ofﬁcer and Human Resources Director attend the meetings of the Committee except when their own
remuneration is under consideration. Details of the attendance by Committee Members at Committee Meetings are shown
in the Corporate Governance Report on page 31.

Composition and terms of reference
The Committee’s composition and terms of reference are in line with the Combined Code and are available on the Company’s
website or on request. The Committee meets not less than three times a year and has responsibility for: (i) making recommendations
to the Board on the Group’s policy on the remuneration of the Company’s Chief Executive, Chairman, the Executive Directors,
the Company Secretary and other members of the Executive Committee; (ii) the determination, within agreed terms of reference,
of the remuneration of the Chairman and of speciﬁc remuneration packages for each of the Executive Directors and other members
of the Executive Committee, including pension rights, any compensation payments and beneﬁts; and (iii) the determination of
awards under the Company’s employee share plans to the Executive Directors, the Company Secretary and other members
of the Executive Committee. The Committee also ensures compliance with the Combined Code in this respect.

Advisors
The Committee has appointed an external consultant, Towers Perrin, to advise on executive compensation issues and in
developing its performance-related remuneration policy. From time to time the Company is also advised by Towers Perrin on
remuneration-related issues. The following individuals also provide material advice or services to the Committee during the year:

• Paul Moody (Chief Executive).

• Doug Frost (HR Director).

• Michael Mountford (Head of Compensation and Beneﬁts).

Remuneration policy
The remuneration policy with respect to Executive Directors has been designed to provide market competitive remuneration
relative to UK-listed companies of similar size and scope.

The Company believes that in order to meet its remuneration objectives, the remuneration of Executive Directors should
comprise a balance between ﬁxed and variable (performance-related) pay elements with the predominant proportion of potential
reward being linked to performance. As a result, for superior performance, approximately two thirds of total remuneration is
performance-related. For target performance, approximately 53% of total remuneration is performance-related.

The Committee constantly reviews remuneration policy to ensure that it is sufﬁciently ﬂexible to take account of future changes
in Britvic’s business operations and environment and recognises key developments in remuneration practice and alignment
to shareholder interests. Consequently, the policy set out in this report has applied during 2006/7 and will apply in 2007/8.

Remuneration objectives
The principal objective of the policy is to provide market competitive levels of remuneration, including incentive arrangements,
which will reward successful execution of the Company’s short-term and long-term strategy. The Committee believes that this
requires:

• The provision of mid-market base salaries and incentive levels for the sector, with appropriate leverage to reward sustained

exceptional performance and support the future growth aspirations of the Company.

Britvic plc Annual Report 2007

Directors’ Remuneration Report continued

• A reward structure that places an equal emphasis on short-term and long-term performance to support operating performance

and to reward sustained longer-term performance.

• Incentive arrangements that are underpinned by a balance of operational and market-related performance metrics to provide

both a focus on business performance and alignment with returns to the Company’s shareholders.

Components of remuneration

Base salary

• Positions the role and the individual fairly

• Individual contribution and

Purpose

Performance measure

within a competitive market range derived
from a peer group of similar-sized
UK-listed companies.

sustained value in the business.

Short-Term Incentive Plan (‘STIP’) • Provides focus on the delivery
of the ﬁnancial targets set out
in the Annual Budget.

Executive Share Option Plan
(‘ESOP’)

• Provides focus on longer-term

share price growth.

• Reﬂects sustained delivery

of earnings growth.

• Alignment to shareholder interests.

Performance Share Plan (‘PSP’)

• Provides focus on sustained growth.

• PBT (50%); net revenue (25%)

and cash ﬂow (25%).

• EPS growth during the

three year vesting period.

• Relative total shareholder return (‘TSR’)
over a three year performance period
against a peer group of 20 similar
sector companies.

Remuneration in practice

Base salary
Salaries are reviewed annually to take account of market movement, individual contribution and increases elsewhere in the
Company. Directors’ salaries are benchmarked against a selected peer group of UK companies with similar levels of revenue.
The salaries of other members of the Executive Committee are benchmarked against a selected group of major companies in the
Fast Moving Consumer Goods (‘FMCG’) and Retail sectors, where the Committee sees the primary market for talent at this level.

Short-Term Incentive Plan
Targets are approved by the Committee at the beginning of the year and are aligned to internal targets and strategic business
objectives for 2006/7. Up to 60% of salary for the Chief Executive and 50% of salary for the Finance Director is payable for the
achievement of target PBT, Net Revenue growth and cash ﬂow performance on a 50%/25%/25% basis. Up to a maximum of
120% and 100% of salary is payable for the achievement of exceptional performance targets for the Chief Executive and Finance
Director respectively. For 2006/7, a bonus of 102% of salary for the Chief Executive and 85% of salary for the Finance Director
was earned for maximum performance against PBT and cash ﬂow but just below target performance in Net Revenue growth.
Details of PBT and Net Revenue are shown on page 41 and cash ﬂow on page 43.

For 2007/8 the Committee decided that the same structure as applied in 2006/7 should continue. Target bonuses will be paid for
achievement of performance measures based on PBT, Net Revenue growth and cash ﬂow set at appropriately stretching levels.
The target and maximum incentive opportunities will also remain the same.

Executive Share Option Plan
Annual grants of options are made at the discretion of the Board over shares in Britvic plc at the market price at date of grant
to senior executives (24 in 2006/7). The level of option grant and the performance conditions are determined and reviewed by
the Committee annually. For 2006/7 and thereafter the current policy is to grant the options over shares worth 200% and 150%
of annual salary to the Chief Executive and Finance Director, respectively. Options are normally exercisable between three and
ten years from the date of grant.

A performance condition is applied such that 40% of the grant vests for the achievement of EPS growth over the three-year
performance period equivalent to RPI +3% per annum. No awards will vest below this threshold level of performance. For
achievement of EPS growth equivalent to RPI +7% per annum over the same period, 100% of the grant will vest, with straight-
line vesting between threshold and maximum. Options lapse to the extent that the performance condition is not achieved.

Britvic plc Annual Report 2007

The acquisition of the C&C soft drinks and associated businesses in Ireland will be included in the calculation of EPS for 2007/8
and beyond.

Performance Share Plan
Annual grants of performance shares are made at the discretion of the Board to senior executives and managers (77 in 2006/7).
The awards normally vest at the end of the three-year performance period, to the extent that the performance condition will have
been achieved, and lapse to the extent it is not achieved. For 2006/7 and thereafter the current policy is to grant the equivalent of
50% of annual salary to Executive Directors, calculated on the basis of the market price at the date of grant. For awards to vest in
full under this plan, Britvic’s TSR must rank in the top quartile of the peer group of the following 20 similar sector companies over
the same period:

AG BARR
Associated British Foods
C&C Group
Cadbury Schweppes
Dairy Crest
Diageo
Fuller Smith
Greene King
IAWS Group
Marston’s (formerly Wolverhampton & Dudley)

Nichols
Northern Foods
Premier Foods
Reckitt Benckiser
SABMiller
Scottish & Newcastle
Smith & Nephew
SSL International
Tate & Lyle
Uniq

No awards will vest for performance below median, with 40% of the award vesting at median rising to 100% at upper quartile
on a straight-line basis. For 2007/8, it is proposed that the same peer group of companies will be used.

During 2006/7 two companies on the original list of comparator companies (RHM and Arla Foods) were taken over and
subsequently excluded from the list. The Committee considered whether to replace these two companies in order to protect
against volatility and decided that the remaining 20 companies are sufﬁcient for this purpose. The Committee will keep the
comparator companies under review.

Shareholding guidelines
In accordance with best practice and further to align the interests of Executive Directors and shareholders, a shareholding
guideline is in place. The guideline requires Executive Directors to acquire a shareholding equal to their annual salary within ﬁve
years from IPO (calculated at the IPO share price). Until this holding is acquired, the Executive Directors may not sell any shares
other than to ﬁnance the cost of exercising options and any tax liabilities arising from the vesting of long-term incentives plans,
unless approved by the Committee, for example, in cases of ﬁnancial hardship.

Retirement beneﬁts
The Executive Directors currently participate in the deﬁned beneﬁt section of the Britvic Pension Plan (the ‘Plan’). This broadly
provides a pension of two thirds of ﬁnal salary along with life assurance, ill health and dependants’ pensions. The retirement age
for Executive Directors is 60. Bonus payouts and other incentive awards are not pensionable.

The Executive Directors also currently participate in the Britvic Executive Top Up Scheme, the Company’s unfunded supplementary
retirement beneﬁts scheme. Prior to the legislative changes on 6 April 2006 (A-Day), the Top Up Scheme provided pension beneﬁts
above the previous HM Revenue & Customs (‘HMRC’) earnings cap to which the Plan was subject. Post A-Day, this earnings cap
has been removed for future service within the Plan. For pre A-Day service the earnings cap is maintained within the Plan and will
be indexed by inﬂation (in line with Treasury notiﬁcation). The Top Up Scheme is maintained to provide pension beneﬁts above
the earnings cap for pre A-Day service and to provide beneﬁts above the new lifetime allowance for post A-Day service.

The deﬁned beneﬁt section of the Plan is closed to new entrants. All new entrants are offered membership of the deﬁned
contribution section of the Plan with similar life assurance, ill health and dependents’ pensions.

In accordance with the Committee’s terms of reference, it will, in 2007/8, undertake a strategic review of pension policy in
respect of the Executive Directors.

Britvic plc Annual Report 2007

Directors’ Remuneration Report continued

Other beneﬁts
Executive Directors receive an annual car beneﬁt or allowance and membership of the Company’s private medical healthcare plan.

Service contracts
The current policy is for Executive Directors’ service contract notice periods to be normally no longer than 12 months.

The service contracts of the current Executive Directors and the letters of appointment of the Non-Executive Directors include
the following terms:

Executive Directors:
Paul Moody
John Gibney

Non-Executive Directors:
Gerald Corbett
Joanne Averiss
Chris Bulmer
Bob Ivell
Michael Shallow

Effective
date of
contract

Unexpired
term (approx.
months)

Notice period
from Director
(months)

Notice period
from Company
(months)

14 December 2005
14 December 2005

14 December 2005
14 December 2005
14 December 2005
14 December 2005
14 December 2005

12*
12*

12
12
12
12
12

6
6

12
3
3
3
3

12
12

12
3
3
3
3

* Executive Directors are appointed on 12-month rolling contracts.

There are no special provisions for Executive or Non-Executive Directors with regard to compensation in the event of loss
of ofﬁce. In the event of the employment of an Executive Director being terminated, the Committee would pay due regard
to best practice and take account of the individual’s duty to mitigate their loss.

Biographical details of all Directors can be found on pages 22 and 23.

Other appointments
The Executive Directors have not been engaged by any other companies and are not permitted to do so during the term of their
appointment without the prior written consent of the Board.

Non-Executive Directors

Chairman’s Letter of Appointment and Beneﬁts
Under his Letter of Appointment, Gerald Corbett was appointed Chairman of the Company for a three-year term. In July 2007,
following a change to the arrangements by which Mr Corbett was provided with partial reimbursement of costs incurred by him
in respect of a motor vehicle and chauffeur (as set out in his Letter of Appointment), his annual fee as Chairman was reduced
from £180,000 to £165,000, the annual allowance of £25,000 made to him in respect of a motor vehicle and chauffeur costs
ceased and the Company employed a chauffeur assigned to Mr Corbett.

Non-Executive Directors
The Non-Executive Directors do not have service contracts but instead have Letters of Appointment for a three-year term.

Remuneration of Non-Executive Directors consists solely of fees. During the year their basic fee was £33,000 per annum and an
additional fee of £2,000 per annum was paid to the Senior Independent Director and to the Chairmen of the Board Committees.

Non-Executive Directors’ fees are determined by the Board annually and they do not participate in any of the Group’s pension
schemes or in any of the Group’s bonus, share option or other incentive schemes.

Britvic plc Annual Report 2007

Performance graph – Total Shareholder Return
The following graph shows the Total Shareholder Return (‘TSR’) of the Company in comparison to an appropriate index for the
period since ﬂotation.

Historical TSR Performance
Growth in the value of a hypothetical £100 holding since float
FTSE 250 excluding investment trusts comparison based on spot values

FTSE 250 Excluding Investment Trusts

Britvic

£150

£125

£100

£75

£50

g
n
d
o
H
0
0
1
£

l
a
c
i
t
e
h
t
o
p
y
H

f
o
e
u
l
a
V

14 Dec 2005

1 Oct 2006

Date

30 Sept 2007

Since date of listing: 14 Dec 2005

The Committee considers the FTSE 250 Excluding Investment Trusts Index is a relevant index for Total Shareholder Return
and comparison disclosure as it represents a broad equity market index in which the Company is a constituent member.

Directors’ interests in shares

Executive Directors:
Paul Moody
John Gibney

Non-Executive Directors:
Gerald Corbett
Joanne Averiss
Chris Bulmer
Bob Ivell
Michael Shallow

Britvic plc ordinary shares of 20p each

30 September
2007

1 October
2006

114,527
108,150

65,217
8,696
6,522
10,870
21,739

22,325
32,325

65,217
8,696
6,522
10,870
21,739

The above shareholdings are all beneﬁcial interests and include shares held on behalf of the Executive Directors by the Trustee
of the Company’s all-employee Share Incentive Plan which is detailed on page 79.

In the period 30 September 2007 to 28 November 2007 there has been no change in the Directors’ interests, other than through
the monthly purchases in October and November of partnership and matching shares under the Share Incentive Plan, resulting
in an increase in the interests held by Paul Moody and John Gibney of 108 shares each.

Britvic plc Annual Report 2007

Directors’ Remuneration Report continued

Audited information
The following information has been audited by the Company’s auditors, as required by Schedule 7A to the Companies Act 1985.

Directors’ Remuneration

Executive Directors:
Paul Moody
John Gibney

Non-Executive Directors:
Gerald Corbett2
Joanne Averiss
Chris Bulmer
Bob Ivell
Michael Shallow

Note:

Basic
salary
and fees
£’000

Taxable
beneﬁts1
£’000

Performance
related
bonuses
£’000

Total
2007
£’000

Total
2006
£’000

424
273

197
33
35
35
35

20
23

11
–
–
–
–

432
231

–
–
–
–
–

876
527

208
33
35
35
35

366
254

163
26
28
28
28

1. Beneﬁts for Paul Moody and John Gibney incorporate all taxable beneﬁts and expense allowances arising from employment
which relate mainly to the provision of an annual car beneﬁt or allowance and membership of the Company’s private medical
healthcare plan. Beneﬁts for Mr Corbett relate to the provision of a chauffeur assigned to him.

2. Under an agreement between the Company and the Chairman, Mr Corbett will be awarded 65,217 ordinary shares by the

Company (matching those he purchased on the Company’s admission to the Ofﬁcial List and to trading on the London Stock
Exchange on 14 December 2005 with an investment of £150,000), conditional upon completion of three years’ service as
Chairman on 13 December 2008 and the continued retention of his original investment.

Directors’ interests in share options
The Executive Directors participate in the Britvic Executive Share Option Plan (on the terms and subject to the EPS growth
performance condition as described on page 34).

At start
of year/ Granted
during
date of
year
grant appointment

Date of

15/12/05
06/12/06

338,776
–

–
338,776

338,776

15/12/05
06/12/06

162,245
–

–
162,245

Paul Moody

Total

John Gibney

Total

162,245

Number of options

Exercised
during
year

Lapsed
during
year

At end
of year/
date of
cessation

Option
exercise
price

Date
from
which
(pence) exercisable

Expiry
date

–
–

–

–
–

–

–
–

–

–
–

–

338,776
338,776

677,552

162,245
162,245

324,490

245.0
245.0

15/12/08
06/12/09

15/12/15
06/12/16

245.0
245.0

15/12/08
06/12/09

15/12/15
06/12/16

The market price of the Company’s shares on 30 September 2007 was 323.0p and the range of closing prices during the year
was 228.2p to 399.0p.

Directors’ interests in the Performance Share Plan
The Executive Directors participate in the Britvic Performance Share Plan (as described on page 34).

Britvic plc Annual Report 2007

Performance shares

Number of shares

At start
of year/
date of
award appointment

Date of

15/12/05*
15/12/05**

90,217
434,784

06/12/06*

15/12/05*
15/12/05**

06/12/06*

525,001

57,609
326,088

383,697

Awarded
during
year

–
–

84,694

–
–

54,082

Vested
during
year

–
144,928

–

144,928

–
108,696

108,696

Lapsed
during
year

At end Market price
at date
of year/
of award
date of
(pence)
cessation

–
–

–

–
–

–

90,217
289,856

84,694

464,767

57,609
217,392

54,082

329,083

242.0
242.0

245.0

242.0
242.0

245.0

Vesting
date

15/12/08
15/12/06/
07&08
06/12/09

Paul Moody

Total

John Gibney

Total

* Annual PSP awards were made to the Executive Directors subject to the TSR performance condition described on page 35.

** In addition to the annual PSP awards, a one-off transitional award was made subject to the achievement of targets based on
average return on invested capital (‘ROIC’). The purpose of this award was to compensate the Company’s valued executives
for the loss of long-term incentive bonuses which were discontinued upon ﬂotation and to help retention. The award vests
in three equal tranches after the ﬁrst, second and third anniversary of the award subject to achievement of average ROIC
performance targets over the three ﬁnancial years 2005/6, 2006/7 and 2007/8. 50% of each tranche vests at threshold
performance of 15% average ROIC rising to maximum vesting at 17% average ROIC on a straight-line basis. In respect of
the second tranche of the transitional award,100% of the award vested after the year end as a result of ROIC performance
in 2006/7. These shares are subject to the Shareholding Guidelines described above.

Consistent with the decision taken by the Committee at the time of the award, it was decided not to take account of the effect
of the acquisition of the C&C soft drinks and associated businesses in Ireland in calculating the ROIC target for the purposes
of the PSP transitional award.

Pensions
The table below shows, as at the year end, the accrued pension should the Director leave employment; the increase in the
accrued pension during the year; the increase excluding inﬂation and member contributions; the transfer value of accrued
pension; and any increase/(decrease) in this value assessed on the transfer value basis as under the Britvic Pension Plan. This
disclosure is in compliance with both the London Stock Exchange Listing Rules and the Companies Act 1985.

Accumulated
accrued
pension
at 30
September
2007
£

Age at 30
September
2007

50
47

142,900
135,500

Increase
in accrued
pension
during the
ﬁnancial
year
£

30,800
21,100

Name

Paul Moody
John Gibney

On behalf of the Board

Chris Bulmer
Chairman of the Remuneration Committee
28 November 2007

Increase,
before
inﬂation,
in accrued
pension
during the
ﬁnancial

Transfer
value of
increase,
before
inﬂation
and less
Directors’
year contributions
£

Transfer
value of
accrued
beneﬁts
at 30
September
2007
£

Transfer
value of
accrued
beneﬁts at
1 October

Increase
in transfer
value, less
Directors’
2006 contributions
£

26,400
16,600

312,100
169,100

1,803,700
1,490,500

1,391,800
1,245,100

390,800
231,900

Britvic plc Annual Report 2007

Independent Auditor’s Report to the Members of Britvic plc

We have audited the Group ﬁnancial statements of Britvic plc for the 52 weeks ended 30 September 2007 which comprise
the Consolidated Income Statement, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated
Statement of Recognised Income and Expense and the related Notes 1 to 32. These Group Financial Statements have been
prepared under the accounting policies set out therein.

We have reported separately on the parent Company ﬁnancial statements of Britvic plc for the 52 weeks ended 30 September
2007 and on the information in the Directors’ Remuneration Report that is described as having been audited.

This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state
to them in an Auditors’ Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.

Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the Annual Report and the Group Financial Statements in accordance with applicable
United Kingdom law and International Financial Reporting Standards (‘IFRSs’) as adopted by the European Union are set out in
the Statement of Directors’ Responsibilities.

Our responsibility is to audit the Group ﬁnancial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing (‘UK and Ireland’).

We report to you our opinion as to whether the Group Financial Statements give a true and fair view and whether the Group
ﬁnancial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS
Regulation. We also report to you whether in our opinion the information given in the Directors’ Report is consistent with the
ﬁnancial statements. The information given in the Directors’ Report includes that speciﬁc information presented in the Operating
and Financial Review that is cross referred from the Business Review section of the Directors’ Report.

In addition we report to you if, in our opinion, we have not received all the information and explanations we require for our audit,
or if information speciﬁed by law regarding director’s remuneration and other transactions is not disclosed.

We review whether the Corporate Governance Statement reﬂects the Company’s compliance with the nine provisions of the
2003 Combined Code speciﬁed for our review by the Listing Rules of the Financial Services Authority, and we report if it does
not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an
opinion on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures.

We read other information contained in the Annual Report and consider whether it is consistent with the audited Group Financial
Statements. The other information comprises only the Chairman’s Statement, the Operating and Financial Review, the Corporate
Responsibility Review, the Directors’ Report, the Corporate Governance Statement and the unaudited part of the Directors’
Remuneration Report. We consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the Group ﬁnancial statements. Our responsibilities do not extend to any other information.

Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Group ﬁnancial
statements. It also includes an assessment of the signiﬁcant estimates and judgments made by the Directors in the preparation
of the Group ﬁnancial statements, and of whether the accounting policies are appropriate to the Group’s circumstances,
consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufﬁcient evidence to give reasonable assurance that the Group Financial Statements are free from material
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the Group Financial Statements.

Opinion
In our opinion:
• The Group Financial Statements give a true and fair view, in accordance with IFRSs as adopted by the European Union,

of the state of the Group’s affairs as at 30 September 2007 and of its proﬁt for the 52 weeks then ended.

• The Group ﬁnancial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4

of the IAS Regulation.

• The information given in the Directors’ Report is consistent with the Group Financial Statements.

Ernst & Young LLP
Registered auditor
Nottingham
28 November 2007

Notes: The maintenance and integrity of the Britvic plc website is the responsibility of the Directors; the work carried out by the Auditors does not involve

consideration of these matters and, accordingly, the Auditors accept no responsibility for any changes that may have occurred to the ﬁnancial statements
since they were initially presented on the website.

Britvic plc Annual Report 2007

Consolidated Income Statement
For the 52 weeks ended 30 September 2007

52 Weeks
Ended 30 September 2007

52 Weeks
Ended 1 October 2006

Revenue
Cost of sales

Gross proﬁt
Selling and distribution costs
Administration expenses

Operating proﬁt/(loss)

Finance income
Finance costs

Proﬁt/(loss) before tax
Taxation

Proﬁt/(loss) for the period
attributable to the equity
shareholders

Earnings per share
Basic earnings per share

Diluted earnings per share

9
5,9

Before
Exceptional
Items
£m

Exceptional
Items
£m

Note

716.3
(286.0)

430.3
(241.4)
(108.9)

80.0

0.9
(19.6)

61.3
(17.3)

–
–

–
–
(5.7)

(5.7)

–
–

(5.7)
4.2

Before
Exceptional
Items
£m

Exceptional
Items
£m

677.9
(263.5)

414.4
(231.0)
(109.7)

73.7

0.2
(18.0)

55.9
(16.3)

–
–

–
–
(19.1)

(19.1)

–
(0.3)

(19.4)
4.0

Total
£m

716.3
(286.0)

430.3
(241.4)
(114.6)

74.3

0.9
(19.6)

55.6
(13.1)

Total
£m

677.9
(263.5)

414.4
(231.0)
(128.8)

54.6

0.2
(18.3)

36.5
(12.3)

44.0

(1.5)

42.5

39.6

(15.4)

24.2

20.4p

20.2p

(0.7p)

19.7p

19.5p

18.4p

18.3p

(7.2p)

(7.1p)

11.2p

Britvic plc Annual Report 2007

Consolidated Balance Sheet
At 30 September 2007

Assets
Non-current assets
Property, plant and equipment
Intangible assets
Operating lease premiums
Pension surplus
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Other ﬁnancial assets
Cash and cash equivalents

Assets held for sale

Total assets

Equity and liabilities
Issued capital
Share premium
Own shares
Share scheme reserve
Hedging reserve
Translation reserve
Retained earnings

Total equity

Non-current liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Pension liability
Other ﬁnancial liabilities
Other non-current liabilities

Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Other ﬁnancial liabilities
Income tax payable

Total liabilities

Total equity and liabilities

Note

13
14
17
25
10d

18
19
27
20

22
23
23
23
23
23
23

24
10d
25
27
28

26
24
27

2007
£m

225.2
247.4
2.4
9.1
3.2

487.3

45.3
129.8
0.1
27.3

202.5

4.8

694.6

(43.2)
(2.5)
10.3
(5.3)
(1.9)
(2.9)
41.2

(4.3)

(417.8)
(30.0)
(14.7)
(3.4)
(1.2)

(467.1)

(203.2)
(13.1)
(0.3)
(6.6)

(223.2)

(690.3)

(694.6)

2006
£m

218.2
95.4
2.4
–
–

316.0

31.7
99.6
0.6
19.2

151.1

–

467.1

(43.2)
(2.5)
0.5
(4.5)
0.4
–
107.0

57.7

(284.3)
(3.3)
(65.8)
–
–

(353.4)

(147.7)
(17.5)
(1.0)
(5.2)

(171.4)

(524.8)

(467.1)

The Financial Statements were approved by the Board of Directors and authorised for issue on 28 November 2007.
They were signed on its behalf by:

Paul Moody
Chief Executive

John Gibney
Finance Director

Britvic plc Annual Report 2007

Consolidated Statement of Cash Flows
For the 52 weeks ended 30 September 2007

Cash ﬂows from operating activities
Proﬁt from continuing operations before tax
Net ﬁnance charge
Depreciation
Amortisation
Share based compensation less cash paid
Net pension charge less contributions
Decrease in inventory
Decrease in debtors
Increase in creditors
Loss on disposal of tangible assets
Loss on disposal of intangible assets
Income tax paid

Net cash ﬂows from operating activities

Cash ﬂows from investing activities
Proceeds from sale of property, plant and equipment
Interest received
Purchases of property, plant and equipment
Purchases of intangible assets
Acquisition of subsidiary net of cash acquired

Net cash ﬂows used in investing activities

Cash ﬂows from ﬁnancing activities
Finance costs
Interest paid
Interest bearing loans received
Interest bearing loans repaid
Repayment of non-interest bearing borrowings
Purchase of own shares
Increase in share capital
Dividends paid to equity shareholders
Dividends paid to previous shareholders

Net cash ﬂows used in ﬁnancing activities

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at the end of the period

Note

2007
£m

55.6
18.7
36.8
5.7
4.7
(14.9)
0.6
1.3
9.1
0.4
–
(11.8)

106.2

9.9
0.9
(20.7)
(5.5)
(160.6)

(176.0)

(0.7)
(21.2)
551.6
(419.4)
–
(10.2)
–
(22.2)
–

77.9

8.1
19.2

27.3

2006
£m

36.5
18.1
38.3
4.7
7.8
(29.6)
6.2
2.2
3.8
4.0
0.4
(3.8)

88.6

0.2
0.2
(29.4)
(3.8)
–

(32.8)

(0.2)
(16.4)
667.0
(598.4)
(2.8)
(0.5)
0.3
(53.3)
(51.7)

(56.0)

(0.2)
19.4

19.2

Britvic plc Annual Report 2007

Consolidated Statement of Recognised Income and Expense
For the 52 weeks ended 30 September 2007

Actuarial gains/(losses) on deﬁned beneﬁt pension scheme
Current tax on additional pension contributions
Deferred tax on pension liabilities
Net movement in cash ﬂow hedges
Deferred tax on share options granted to employees
Current tax on share options exercised
Exchange differences on translation of foreign operations

Net income/(expense) recognised directly in equity attributable to equity shareholders
Proﬁt for the period

Total recognised income for the period

Note

2007
£m

61.3
3.0
(21.4)
2.3
1.1
1.6
2.9

50.8
42.5

93.3

2006
£m

(10.8)
9.0
(5.7)
0.6
0.1
1.1
–

(5.7)
24.2

18.5

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements

1. General information
Britvic plc (‘the Company’) is a company incorporated in the United Kingdom under the Companies Act 1985. It is a public limited
company domiciled in England and Wales and its ordinary shares are traded on the London Stock Exchange. Britvic plc and its
subsidiaries (together ‘the Group’) operate in the soft drinks manufacturing and distribution industry, principally in the United
Kingdom and Republic of Ireland.

The operating companies of the Group are disclosed within Note 32.

2. Statement of compliance
The ﬁnancial information has been prepared on the basis of applicable International Financial Reporting Standards (‘IFRS’)
as adopted by the European Union, including relevant International Accounting Standards (‘IAS’), Standing Interpretations
Committee (SIC) and International Financial Reporting Interpretations Committee (‘IFRIC’) interpretations issued by the
International Accounting Standards Board (‘IASB’).

3. Accounting policies

Basis of preparation
For all periods up to and including the year ended 2 October 2005, Britannia Soft Drinks Limited prepared its ﬁnancial statements
in accordance with UK generally accepted accounting practice (‘UK GAAP’). As a consequence of the acquisition of Britannia Soft
Drinks Limited by Britvic plc and of that company’s listing on the London Stock Exchange, from 3 October 2005 the Group is
required to prepare consolidated ﬁnancial statements in accordance with IFRS as applied in accordance with the provisions of
the Companies Act 1985. The prior year ﬁnancial statements were therefore the ﬁrst ﬁnancial statements prepared by Britvic plc
in accordance with IFRS. As such the Group took the following exemptions available under IFRS 1 ‘First-time Adoption of
International Financial Reporting Standards’:

a) Not to restate the comparative information disclosed in the 2005 Financial Statements (being the Financial Statements for
the 52 weeks ended 2 October 2005) in accordance with IAS 32 ‘Financial Instruments: Disclosure and Presentation’ and
IAS 39 ‘Financial Instruments: Recognition and Measurement’.

b) Not to restate business combinations occurring before 4 October 2004.

c) To recognise all actuarial gains and losses on pensions and other post-retirement beneﬁts directly in shareholders’ equity

at 4 October 2004.

d) Not to apply IFRS 2 ‘Share-based Payment’ to grants of equity instruments on or before 7 November 2002 that had vested

prior to 1 January 2005.

The Consolidated Financial Statements have been prepared on a historical cost basis except where measurement of balances
at fair value is required as explained below. The Consolidated Financial Statements are presented in sterling and all values are
rounded to the nearest million except where otherwise indicated.

The principal accounting policies adopted by the Group are set out below.

Basis of consolidation
The consolidated ﬁnancial information incorporates the ﬁnancial information of Britvic plc and the entities controlled
by the Company (‘its subsidiaries’).

The Group Financial Statements consolidate the accounts of Britvic plc and all its subsidiary undertakings drawn up to
30 September 2007. The acquisition method of accounting has been used, under which the results of subsidiary
undertakings acquired or disposed of in the year are included in the consolidated income statement from the date
of acquisition or up to the date of disposal.

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date
of acquisition. Any excess of the cost of acquisition over the fair values of the identiﬁable net assets acquired is recognised
as goodwill. Any deﬁciency of the cost of acquisition below the fair values of the identiﬁable net assets acquired (‘discount
on acquisition’) is credited to the income statement in the period of acquisition.

Control comprises the power to govern the ﬁnancial and operating policies of the investee so as to obtain beneﬁt from its
activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting
rights; or by way of contractual agreement. The ﬁnancial statements of subsidiaries are prepared for the same reporting year as
the parent company, using consistent accounting policies. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

3. Accounting policies continued

Revenue recognition
Revenue is the value of sales, excluding transactions with or between subsidiaries, and after deduction of sales-related discounts,
value added tax and other sales-related taxes. Revenue is recognised when the signiﬁcant risks and rewards of ownership of the
goods have passed to the buyer and the amount can be measured reliably.

Sales related discounts are calculated based on the expected amounts necessary to meet claims by the Group’s customers
in respect of these discounts and rebates.

Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation
is calculated so as to write off the cost of an asset, less its estimated residual value, on a straight-line basis, over the useful
economic life of that asset as follows:

Plant and machinery
Vehicles (included in plant and machinery)
Equipment in retail outlets (included in ﬁxtures, ﬁttings, tools and equipment)
Other ﬁxtures and ﬁttings (included in ﬁxtures, ﬁttings, tools and equipment)

Land is not depreciated.

Freehold properties are depreciated over 50 years.

3–20 years
5–7 years
5–10 years
3–10 years

Leasehold properties are depreciated over 50 years, or over the unexpired lease term when this is less than 50 years.

Gains and losses on disposals are determined by comparing proceeds with carrying amount, and are included in the
income statement.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.

Goodwill
Business combinations on or after 4 October 2004 are accounted for under IFRS 3 using the purchase method. Goodwill on
acquisition is initially measured at cost being the excess of the cost of acquisition over the Group’s interest in the fair value
of the identiﬁable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Negative
goodwill is recognised immediately in the income statement and positive goodwill is recognised on the balance sheet.

Following initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised.

Goodwill is reviewed for impairment at least annually. As at the acquisition date, any goodwill acquired is allocated to the Group
of cash-generating units expected to beneﬁt from the combination’s synergies by management. Impairment is determined by
assessing the recoverable amount of the Group of cash-generating units to which the goodwill relates. Where the recoverable
amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised immediately in the
income statement.

On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the
determination of the proﬁt or loss on disposal.

Intangible assets
Trademarks, franchise rights and customer lists
Intangible assets acquired separately from a business are capitalised at cost. An intangible asset acquired as part of a business
combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and its fair
value can be measured reliably.

The useful lives of intangible assets are assessed to be either ﬁnite or indeﬁnite. Amortisation is charged on assets with ﬁnite
lives on a straight-line basis over a period appropriate to the asset’s useful life.

The carrying values of intangible assets with ﬁnite and indeﬁnite lives are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.

Intangible assets with indeﬁnite useful lives are tested for impairment annually either individually or at the cash generating
unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indeﬁnite life is reviewed annually
to determine whether indeﬁnite life assessment continues to be supportable. If not, the change in the useful life assessment
from indeﬁnite to ﬁnite is made on a prospective basis.

Britvic plc Annual Report 2007

3. Accounting policies continued

Intangible assets continued
Software costs
Software expenditure is recognised as an intangible asset only after its technical feasibility and commercial viability can be
demonstrated. Acquired computer software licences and software developed in-house are capitalised on the basis of the
costs incurred to acquire and bring to use the speciﬁc software. These costs are amortised over their estimated useful lives
of three to seven years.

Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inﬂows that are largely independent of those
from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash ﬂows
are discounted to their present value using a pre-tax discount rate that reﬂects current market assessments of the time value
of money and the risks speciﬁc to the asset. Impairment losses of continuing operations are recognised in the income statement
in those expense categories consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously
recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its
recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Goodwill impairment losses cannot
subsequently be reversed.

Inventories and work in progress
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred in bringing inventories to their present location and condition.
Cost is determined using the weighted average cost method. Net realisable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Financial assets
The Group determines the classiﬁcation of its ﬁnancial assets at initial recognition and re-evaluates this designation at each
ﬁnancial period-end. When ﬁnancial assets are recognised initially, they are measured at fair value, being the transaction price
plus directly attributable transaction costs.

The Group has ﬁnancial assets that are classiﬁed as loans and receivables. The Group measures these as follows:

Loans and receivables
Loans and receivables are non-derivative ﬁnancial assets with ﬁxed or determinable payments that are not quoted in an active
market, do not qualify as trading assets and have not been designated as either fair value through proﬁt or loss or available for
sale. Such assets are carried at amortised cost using the effective interest method if the time value of money is signiﬁcant.
Gains and losses are recognised in income when the loans and receivables are derecognised or impaired, as well as through
the amortisation process.

Derivative ﬁnancial instruments and hedging
The Group uses derivative ﬁnancial instruments such as forward currency contracts and interest rate swaps to hedge its risks
associated with foreign currency and interest rate ﬂuctuations. All derivative ﬁnancial instruments are initially recognised and
subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when
the fair value is negative.

The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar
maturity proﬁles. The fair value of interest rate swap contracts is determined by reference to market values for similar instruments.

For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented at its
inception. This documentation identiﬁes the hedging instrument, the hedged item or transaction, the nature of the risk being hedged
and how effectiveness will be measured throughout its duration. Such hedges are expected at inception to be highly effective.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

3. Accounting policies continued

Derivative ﬁnancial instruments and hedging continued
For the purpose of hedge accounting, hedges are classiﬁed as:

• Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability.

• Cash ﬂow hedges when hedging exposure to variability in cash ﬂows that is either attributable to a particular risk associated

with a recognised asset or liability or a highly probable forecast transaction.

Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge accounting are taken to
the income statement. The treatment of gains and losses arising from revaluing derivatives designated as hedging instruments
depends on the nature of the hedging relationship, as follows:

Fair value hedges
For fair value hedges, the carrying amount of the hedged item is adjusted for gains and losses attributable to the risk being
hedged; the derivative is remeasured at fair value and gains and losses from both are taken to the income statement. For hedged
items carried at amortised cost, the adjustment is amortised through the income statement such that it is fully amortised by
maturity. When an unrecognised ﬁrm commitment is designated as a hedged item, this gives rise to an asset or liability in the
balance sheet, representing the cumulative change in the fair value of the ﬁrm commitment attributable to the hedged risk.

The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the
hedge no longer meets the criteria for hedge accounting or the Group revokes the designation.

Cash ﬂow hedges
For cash ﬂow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in equity, while
the ineffective portion is recognised in the income statement. Amounts taken to equity are transferred to the income statement
when the hedged transaction affects proﬁt or loss, such as when a forecast sale or purchase occurs. Where the hedged item
is the cost of a non-ﬁnancial asset or liability, the amounts taken to equity are transferred to the initial carrying amount of the
non-ﬁnancial asset or liability.

If a forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to the income
statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its
designation as a hedge is revoked, amounts previously recognised in equity remain in equity until the forecast transaction occurs
and are transferred to the income statement or to the initial carrying amount of a non-ﬁnancial asset or liability as above. If the
related transaction is not expected to occur, the amount is taken to the income statement.

Net investment hedges
Derivative ﬁnancial instruments are classiﬁed as net investment hedges when they hedge the Group’s net investment in foreign
operations. The Group’s foreign currency borrowings qualify as hedging instruments that hedge foreign currency net investment
balances. Gains or losses on translation of borrowings are recognised in equity. Upon disposal of the associated investment in
foreign operations cumulative gain or loss is recycled through the income statement.

Derecognition of ﬁnancial instruments
The derecognition of a ﬁnancial instrument takes place when the Group no longer controls the contractual rights that comprise
the ﬁnancial instrument, which is normally the case when the instrument is sold, or all the cash ﬂows attributable to the
instrument are passed through to an independent third party.

Share-based payments
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are
granted. Fair value is determined by an external valuer using an appropriate pricing model. In valuing equity-settled transactions,
no account is taken of any performance conditions, other than conditions linked to the price of the shares (‘market conditions’).

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance conditions are fulﬁlled, ending on the date on which the relevant employees become fully entitled to the award
(‘vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reﬂects the extent to which the vesting period has expired and the number of equity instruments that, in the opinion of the
Directors and based on the best available estimate at that date, will ultimately vest (or in the case of an instrument subject
to a market condition, be treated as vesting as described below). The income statement charge or credit for a period represents
the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition, which are treated as vesting irrespective of whether or not the market condition is satisﬁed, provided that all other
performance conditions are satisﬁed.

Britvic plc Annual Report 2007

3. Accounting policies continued

Share-based payments continued
The Group has taken advantage of the transitional provisions of IFRS 2 in respect of equity-settled awards and has applied
IFRS 2 only to equity-settled awards granted after 7 November 2002 that had not vested before 1 January 2005.

Taxation
The current income tax expense is based on taxable proﬁts for the year, after any adjustments in respect of prior years. It is
calculated using taxation rates enacted or substantively enacted by the balance sheet date and is measured at the amount
expected to be recovered from or paid to the taxation authorities.

Provision is made for deferred tax liabilities, or credit taken for deferred tax assets, on all material temporary differences between
the tax base of assets and liabilities and their carrying values in the consolidated ﬁnancial statements.

The principal temporary differences arise from accelerated capital allowances, provisions for pensions and other post-retirement
beneﬁts, provisions for share-based payments and employee proﬁt share schemes and other short-term temporary differences.

Deferred tax assets are recognised to the extent that it is regarded as probable that future taxable proﬁts will be available against
which the temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the periods in which the asset or liability will be settled
based on the tax rates enacted or substantively enacted by the balance sheet date.

Pensions
The Group operates a pension scheme, the Britvic Pension Plan (‘BPP’), which has both a deﬁned beneﬁt fund and a deﬁned
contribution fund. The deﬁned beneﬁt section of the BPP was closed on 1 August 2002, and since this date new employees
have been eligible to join the deﬁned contribution section of the BPP.

In addition, as a result of the acquisition of the soft drinks business of C&C Group (‘Britvic Ireland’) on 29 August 2007, the
Company inherited a further pension scheme in which its employees in Northern Ireland participate, the C&C Pension Trust
(1973) Ltd. Also, following the acquisition the employees in the Republic of Ireland have continued to participate in a number
of C&C Group pension funds until new arrangements are ﬁnalised in the 12 months following acquisition.

Under deﬁned beneﬁt pension plans, plan assets are measured at fair value and plan liabilities are measured on an actuarial basis,
using the projected unit credit method and discounted at an interest rate equivalent to the current rate of return on a high quality
corporate bond of equivalent currency and term to the plan liabilities.

The service cost of providing pension beneﬁts to employees for the year is charged to the income statement. The cost of making
improvements to pensions is recognised in the income statement on a straight-line basis over the period during which the
increase in beneﬁts vests. To the extent that the improvements in beneﬁts vest immediately, the cost is recognised immediately.
These costs are recognised as an expense.

Past service costs are recognised in proﬁt or loss on a straight-line basis over the vesting period or immediately if the beneﬁts
have vested. When a settlement (eliminating all obligations for beneﬁts already accrued) or a curtailment (reducing future
obligations as a result of a material reduction in the scheme membership or a reduction in future entitlement) occurs the
obligation and related plan assets are re-measured using current actuarial assumptions and the resultant gain or loss is recognised
in the income statement during the period in which the settlement or curtailment occurs.

A charge representing the unwinding of the discount on the plan liabilities during the year is included within administrative expenses.

A credit representing the expected return on the plan assets during the year is included within administrative expenses.
This credit is based on the market value of the plan assets, and expected rates of return, at the beginning of the year.

Actuarial gains and losses may result from: differences between the expected return and the actual return on plan assets;
differences between the actuarial assumptions underlying the plan liabilities and actual experience during the year; or changes
in the actuarial assumptions used in the valuation of the plan liabilities. Actuarial gains and losses, and taxation thereon, are
recognised in the consolidated statement of recognised income and expense.

For deﬁned contribution plans, contributions payable for the year are charged to the income statement as an operating expense.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

3. Accounting policies continued

Employee beneﬁts
Wages, salaries, bonuses, paid annual leave and sick leave are accrued in the year in which the associated services are rendered
by the employees of the Group.

Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable
that an outﬂow of resources embodying economic beneﬁts will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. Where the Group expects a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. If the effect
of the time value of money is material, provisions are determined by discounting the expected future cash ﬂows at a pre-tax rate
that reﬂects current market assessments of the time value of money and, where appropriate, the risks speciﬁc to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.

Leases
Leases are classiﬁed as ﬁnance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classiﬁed as operating leases.

Assets held under ﬁnance leases are recognised as assets of the Group at their fair value or, if lower, at the present value
of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is
included in the balance sheet as a ﬁnance lease obligation.

Lease payments are apportioned between the ﬁnance element, which is charged to the income statement using the effective
interest rate method, and the capital element which reduces the outstanding obligation for future instalments.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Lease incentives received are credited to the income statement on a straight-line basis over the term of the leases to which
they relate.

Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments
with original maturities of three months or less, which are readily convertible into known amounts of cash and subject to
insigniﬁcant risk of changes in value. For the purposes of the statement of cash ﬂows, bank overdrafts repayable on demand
are a component of cash equivalents.

Trade and other receivables
Trade receivables, which generally have 30–90 day terms, are recognised at their original amount less an allowance for any
doubtful accounts.

An allowance for doubtful accounts is made when collection of the full amount is no longer considered probable. Balances are
written off when the probability of recovery is assessed as being remote.

Interest bearing loans and borrowings
Borrowings are stated at proceeds received less any unamortised issue costs.

Finance costs not settled in the period are included within the outstanding loan balance and ﬁnance charges are charged
to the income statement using an effective interest rate method.

Foreign currencies
Functional and presentation currency
The consolidated ﬁnancial information is presented in pounds sterling, which is the Group’s presentational currency.

Transactions and balances
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are
taken to the income statement.

Britvic plc Annual Report 2007

3. Accounting policies continued

Foreign currencies continued
Foreign operations
The income statement and cash ﬂows of foreign operations are translated at the average rate of exchange during the period.
The balance sheet is translated at the rate ruling at the reporting date. Opening net assets and exchange differences arising
on the translation of results at an average rate compared to a closing rate are both dealt with through reserves. On disposal
of a foreign operation accumulated exchange differences previously recognised in equity are included in the proﬁt or loss on
disposal recognised in the income statement.

Segmental reporting
A business segment is a distinguishable component of the Group engaged in providing products and services that are subject
to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing
products and services within a particular economic environment that are subject to risks and returns that are different from those
of segments operating in other economic environments. Segment reporting reﬂects the internal management structure and the
way the business is managed.

Issued share capital
Ordinary shares are classiﬁed as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.

Exceptional Items
The Group presents as exceptional items on the face of the income statement those signiﬁcant items of income and expense
which, because of the nature and infrequency of the events giving rise to them, merit separate presentation to allow
shareholders to understand better the elements of ﬁnancial performance in the year, so as to facilitate comparison with prior
periods and to assess trends in ﬁnancial performance more readily.

Borrowing costs
All borrowing costs are recognised as ﬁnance costs in the income statement in the period in which they are incurred.

Issue costs of loans
The ﬁnance cost recognised in the income statement in respect of capital instruments is allocated to periods over the terms
of the instrument using the effective interest method.

New standards and interpretations not applied
The Group has not applied the following IFRSs and IFRIC Interpretations, which will be applicable to the Group, that have been
issued but are not yet effective:

International Financial Reporting Standards (‘IFRS’)
IFRS 6
IFRS 7
IFRS 8

Exploration for and Evaluation of Mineral Resources
Financial Instruments: Disclosures
Operating Segments

International Accounting Standards (‘IAS’)
IAS 1
IAS 1

Amendment – Presentation of Financial Statements: Capital Disclosures
Amendment – Presentation of Financial Statements (Revised)

International Financial Reporting Interpretations Committee (‘IFRIC’)
IFRIC 11
IFRIC 14

IFRS 2 – Group and Treasury Share Transactions
IAS 19 – The Limit on a Deﬁned Beneﬁt Asset, Minimum Funding
Requirements and their Interaction

Effective date,
periods commencing

1 January 2007
1 January 2007
1 January 2009

1 January 2007
1 January 2009

1 March 2007

1 January 2008

The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the Group’s
ﬁnancial statements in the period of initial application.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

3. Accounting policies continued

New standards and interpretations not applied continued
Upon adoption of IFRS 7, the Group will have to disclose additional information about its ﬁnancial instruments, their signiﬁcance
and the nature and extent of the risks that they give rise to. More speciﬁcally the Group will need to disclose the fair value of
its ﬁnancial instruments and its risk exposure in greater detail. There will be no effect on reported income or net assets.

Those standards not mentioned above but issued recently have been considered by the Group and have no signiﬁcant impact
on the ﬁnancial statements.

Key sources of estimation uncertainty
In applying the above accounting policies, management has made appropriate estimates and judgements in a number of areas.
The key sources of estimation uncertainty at the balance sheet date that have a signiﬁcant risk of causing signiﬁcant adjustment
to the carrying amounts of assets and liabilities within the next ﬁnancial year are:

Post retirement beneﬁts
The determination of the pension and other post retirement beneﬁts cost and obligation is based on assumptions determined
with independent actuarial advice. The assumptions include discount rate, inﬂation, pension and salary increases, expected return
on scheme assets, mortality and other demographic assumptions.

Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which
goodwill has been allocated. The value in use calculation requires an estimate of the future cash ﬂows expected to arise from
the cash-generating unit and a suitable discount rate in order to calculate present value.

Deferred tax
Deferred tax assets and liabilities require management’s judgement in determining the amounts to be recognised. In particular,
signiﬁcant judgement is used when assessing the extent to which deferred tax assets should be recognised which is dependent
on the generation of sufﬁcient future taxable proﬁts. The Group recognises deferred tax assets where it is more likely than not
that the beneﬁt will be realised.

Provisional goodwill
The acquisition of Britvic Ireland was completed on the 29 August 2007. The fair value adjustments as presented in Note 15 of
the ﬁnancial statements reﬂect management’s current best estimates. As permitted by IFRS 3 ‘Business combinations’, these
items may be subject to further revision within a period of 12 months from the date of acquisition, in determining the ﬁnal
goodwill arising from the acquisition.

Cross currency interest rate swaps
The Group measures cross currency interest rate swaps at fair value at each balance sheet date. The fair value represents the net
present value of the difference between the projected cash ﬂows at the swap contract rate and the valuations rate for the period
from the balance sheet date to the contracted expiry date. The calculation therefore uses estimates of present value, future
foreign exchange rates and interest rates.

Britvic plc Annual Report 2007

4. Segmental reporting
In prior periods the Directors have considered that the Group had only one reportable geographical segment and one business
segment being the manufacture and sale of soft drinks. Following the acquisition of Britvic Ireland during the year, the Directors
now consider that the Group’s primary reporting segment is geographical, as this is the basis on which the Group is organised
and managed. The geographical segments are: United Kingdom excluding Northern Ireland (‘GB’) and Republic of Ireland and
Northern Ireland (‘ROI & NI’). Britvic International is included within the GB segment.

Analysis by geography:

Gross revenue
Inter-segment revenue

Segment revenue

Segment result
Gross proﬁt
Operating proﬁt before exceptional items
Operating proﬁt after exceptional items

Other non-cash expenses
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share-based payments

Segment assets
Gross assets
Unallocated assets

Total segment assets

Segment liabilities
Gross liabilities
Unallocated liabilities

Total segment liabilities

Capital expenditure
Capital expenditure

GB
£m

702.5
–

702.5

427.4
79.2
74.7

36.2
5.6
8.1

ROI & NI
£m

13.8
–

13.8

2.9
0.8
(0.4)

0.6
0.1
–

443.9

247.5

599.6

52.3

2007
Total
£m

716.3
–

716.3

430.3
80.0
74.3

36.8
5.7
8.1

691.4
3.2

694.6

651.9
38.4

690.3

GB
£m

677.9
–

677.9

414.4
73.7
54.6

38.3
4.7
6.9

467.1

512.4

26.7

0.6

27.3

33.0

ROI & NI
£m

–
–

–

–
–
–

–

2006
Total
£m

677.9
–

677.9

414.4
73.7
54.6

38.3
4.7
6.9

467.1
–

467.1

512.4
12.4

524.8

33.0

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

5. Exceptional items

Listing costs
Cost of incentive schemes directly associated with the ﬂotation
Restructuring costs
Returnable bottle impairment in GB
Proﬁt on sale of property, plant and equipment
Acquisition costs for the purchase of Britvic Ireland
Pension curtailment gain

Finance costs (see Note 9)

2007
£m

–
(3.3)
(8.1)
(2.1)
3.4
(1.2)
5.6

(5.7)
–

(5.7)

2006
£m

(5.5)
(6.6)
(7.0)
–
–
–
–

(19.1)
(0.3)

(19.4)

Listing costs relate to costs incurred in pursuit of the listing on the London Stock Exchange which include advisors’ fees.

Incentive schemes directly associated with the ﬂotation include all-employee share schemes and management incentives.
The cost in 2007 relates to a transitional award granted to members of both the senior leadership team and senior management
team shortly after ﬂotation, the purpose of which was to compensate these individuals for the loss of existing long-term incentive
bonuses which were discontinued upon ﬂotation.

Restructuring costs includes the costs of major restructuring programmes undertaken in the year. These include the outsourcing
of both the secondary distribution network and the delivery and remanufacture of vending and chiller equipment to external
providers. These costs relate principally to redundancy costs and advisors’ fees.

Returnable bottle impairment relates to a write-down of inventories for returnable glass bottle stocks which have become
redundant due to the move to non-returnable bottles in the GB segment.

Proﬁt on sale of property, plant and equipment relates to the sale of one of the Group’s depots which was completed in April
2007. The Group has entered into a sale and leaseback transaction with regard to this depot. Further detail is provided in Note 31.

Acquisition costs for the purchase of Britvic Ireland relate to the costs incurred in acquiring the business which cannot be
included in the cost of the business combination and therefore cannot be capitalised. Principally these costs relate to setting
up the ﬁnancing structure to facilitate the acquisition and internal staff costs such as transaction bonuses.

The pension curtailment gain is triggered by the transfer of Group employees under the outsourcing arrangements of the
secondary distribution network. Those employees that are members of the Britvic Pension Plan will no longer accrue future
entitlement, which gives rise to the curtailment gain. Further detail is provided in Note 25.

Details of the tax implications of exceptional items are given in Note 10a.

Britvic plc Annual Report 2007

6. Operating proﬁt
This is stated after charging/(crediting):

Cost of inventories recognised as an expense

Write-down of inventories recognised as an expense*

Research and development expenditure written off

Net foreign currency differences

Depreciation of property, plant and equipment
Amortisation of intangible assets

Total depreciation and amortisation expense included in administration expenses

Operating lease payments
– minimum lease payments
– sublease payments

Total lease and sublease payments recognised as an expense

* This excludes the write-down of returnable bottle stocks included in Note 5.

7. Auditor’s remuneration

Auditor’s remuneration – audit services

Other fees to auditors
– Local statutory audits for subsidiaries
– Corporate ﬁnance services*

2007
£m

283.3

1.1

1.8

0.5

36.8
5.7

42.5

11.0
(0.3)

10.7

2007
£m

0.2

0.1
0.7

2006
£m

263.5

1.7

2.0

0.2

38.3
4.7

43.0

10.2
(0.3)

9.9

2006
£m

0.2

–
1.0

* Corporate ﬁnance fees relate to costs incurred in respect of the acquisition of Britvic Ireland (2006: costs incurred in respect

of the ﬂotation).

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

8. Staff costs

Wages and salaries*
Social security costs
Pension costs (Note 25)
Expense of share based compensation and employee proﬁt share scheme**

* £4.4m (2006: £4.3m) of this is included within ‘restructuring costs’ in exceptional items (Note 5).

** £3.3m (2005: £6.6m) of this is included within exceptional items (see Note 5 and Note 29).

Directors’ emoluments included above are detailed in the Directors’ Remuneration Report.

The average monthly number of employees during the period was made up as follows:

Distribution
Production
Sales and marketing
Administration

9. Finance income/(costs)

Finance income
Bank interest receivable
Other interest receivable

Total ﬁnance income

Finance costs
Bank loans, overdrafts and loan notes

Total ﬁnance costs

2007
£m

94.9
8.5
5.0
8.1

116.5

2007

637
1,000
743
310

2,690

2007
£m

0.9
–

0.9

(19.6)

2006
£m

93.3
8.5
10.7
6.9

119.4

2006

605
1,157
786
347

2,895

2006
£m

–
0.2

0.2

(18.3)

Included within total ﬁnance costs is interest on bank loans and overdrafts of £nil which relates to exceptional items (2006: £0.3m).

Britvic plc Annual Report 2007

10. Taxation

a) Tax on proﬁt on ordinary activities

Consolidated income statement
Current income tax

Current income tax (charge)/credit
Amounts overprovided in previous years

Total current income tax (charge)/credit

Deferred income tax

Origination and reversal of temporary differences

Total deferred tax credit

Total tax (charge)/credit in the income statement

Consolidated statement of recognised income and expense
Current tax on additional pension contributions
Deferred tax on pension liabilities
Tax on share options granted to employees
Deferred tax on movement in cash ﬂow hedges

Net tax expense reported in equity

Consolidated income statement
Current income tax

Current income tax (charge)/credit
Amounts overprovided in previous years

Total current income tax (charge)/credit

Deferred income tax

Origination and reversal of temporary differences

Total deferred tax (charge)/credit

Total tax (charge)/credit in the income statement

Consolidated statement of recognised income and expense
Tax on pensions
Tax on share options granted to employees

Tax beneﬁt reported in equity

Before
Exceptional
Items
£m

Exceptional
Items
£m

(19.7)
0.5

(19.2)

1.9

(17.3)

2.9
–

2.9

1.3

4.2

Before
Exceptional
Items
£m

Exceptional
Items
£m

(16.0)
0.6

(15.4)

(0.9)

(16.3)

3.5
–

3.5

0.5

4.0

2007

Total
£m

(16.8)
0.5

(16.3)

3.2

(13.1)

3.0
(21.4)
2.7
(0.9)

(16.6)

2006

Total
£m

(12.5)
0.6

(11.9)

(0.4)

(12.3)

3.3
1.2

4.5

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

10. Taxation continued

b) Reconciliation of the total tax charge
The tax expense in the income statement is lower than the standard rate of corporation tax in the UK of 30% (2006: 30%).
The differences are reconciled below:

Proﬁt/(loss) before tax

Proﬁt multiplied by the UK standard rate of corporation tax of 30%
Expenditure not deductible for income tax purposes
Tax relief on share-based payments
Tax overprovided in previous years
Non-taxable proﬁt on sale of property
Overseas tax rates
Reduction of deferred tax due to reduction of UK corporation tax rate

Effective income tax rate

Proﬁt/(loss) before tax

Effective income tax rate

Before
Exceptional
Items
£m

Exceptional
Items
£m

61.3

(18.4)
(0.7)
0.1
0.5
–
1.2
–

(17.3)

28.2%

(5.7)

1.7
(0.6)
(0.1)
–
1.9
(0.1)
1.4

4.2

Before
Exceptional
Items
£m

55.9

(16.8)
(0.5)
(0.1)
0.7
0.4

(16.3)

29.2%

Exceptional
Items
£m

(19.4)

5.8
(1.6)
(0.3)
0.1
–

4.0

2007

Total
£m

55.6

(16.7)
(1.3)
–
0.5
1.9
1.1
1.4

(13.1)

23.6%

2006

Total
£m

36.5

(11.0)
(2.1)
(0.4)
0.8
0.4

(12.3)

33.7%

c) Unrecognised tax items
The Group has unrecognised capital tax losses which arose in the UK of £1.8m (2006: £2.4m) that are available indeﬁnitely for
offset against future taxable proﬁts of the companies in which the losses arose. These tax losses can only be offset against future
capital gains and have not been recognised in these ﬁnancial statements.

The Group has unrecognised tax liabilities on un-remitted earnings from an overseas subsidiary amounting to £14.7m (2006: £nil).
Deferred tax on these proﬁts has not been recognised as the UK parent controls when the earnings will be remitted to the UK.

Britvic plc Annual Report 2007

10. Taxation continued

d) Deferred tax
The deferred tax included in the balance sheet is as follows:

Deferred tax liability

Accelerated capital allowances
Acquisition fair value adjustments
Other temporary differences
Employee incentive plan
Post employment beneﬁts

Deferred tax liability

Deferred tax asset

Employee incentive plan
Post employment beneﬁts
Other temporary differences

Deferred tax asset

Net deferred tax liability

The net deferred tax liability has been presented on the balance sheet by jurisdiction as follows:

Net deferred tax assets – overseas
Net deferred tax liabilities – UK

The deferred tax included in the Group income statement is as follows:

Employee incentive plan
Acquisition fair value adjustments
Post employment beneﬁts
Employee incentive plan
Accelerated capital allowances
Post employment beneﬁts
Deferred tax from prior years
Reduction of deferred tax due to reduction of UK corporation tax rate

Deferred tax credit/(charge)

2007
£m

(20.4)
(10.1)
(1.8)
(0.2)
(2.1)

(34.6)

3.8
3.9
0.1

7.8

(26.8)

2007
£m

3.2
(30.0)

(26.8)

2007
£m

–
(0.1)
(1.5)
0.9
2.4
–
0.1
1.4

3.2

2006
£m

(22.9)
(0.4)
(1.6)
–
–

(24.9)

1.9
19.7
–

21.6

(3.3)

2006
£m

–
(3.3)

(3.3)

2006
£m

(1.1)
(0.1)
–
–
0.5
0.2
0.2
–

(0.3)

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

11. Earnings per share
Basic earnings per share amounts are calculated by dividing proﬁt for the year attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net proﬁt attributable to ordinary equity holders of the parent
(before deducting interest on the convertible non-cumulative redeemable preference shares) by the weighted average number
of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on
the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following table reﬂects the income and share data used in the basic and diluted earnings per share computations:

Basic earnings per share
Net proﬁt attributable to ordinary shareholders

Weighted average number of ordinary shares in issue for basic earnings per share

Basic earnings per share

Diluted earnings per share
Net proﬁt attributable to ordinary shareholders

Weighted average number of ordinary shares in issue for diluted earnings per share

Diluted earnings per share

2007
£m

42.5

215.5

19.7p

42.5

218.1

19.5p

2006
£m

24.2

215.4

11.2p

24.2

216.7

11.2p

The Group presents as exceptional items on the face of the income statement, those signiﬁcant items of income and expense
which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow
shareholders to understand better the elements of ﬁnancial performance in the year, so as to facilitate comparison with prior
periods and to assess better trends in ﬁnancial performance more readily.

To this end, basic and diluted earnings per share is also presented on this basis using the weighted average number of ordinary
shares for both basic and diluted amounts as per the table above.

Basic earnings per share for pre-exceptional earnings
Net proﬁt attributable to ordinary shareholders
Add: Net impact of exceptional items

Net proﬁt attributable to ordinary shareholders (before exceptional items)

Weighted average number of ordinary shares in issue for basic earnings per share

Basic earnings per share for pre-exceptional earnings

Diluted earnings per share for pre-exceptional earnings
Net proﬁt attributable to ordinary shareholders (before exceptional items)

Weighted average number of ordinary shares in issue for diluted earnings per share

Diluted earnings per share for pre-exceptional earnings

2007
£m

42.5
1.5

44.0

215.5

20.4p

44.0

218.1

20.2p

2006
£m

24.2
15.4

39.6

215.4

18.4p

39.6

216.7

18.3p

Britvic plc Annual Report 2007

12. Dividends paid and proposed

Declared and paid during the year
Equity dividends on ordinary shares
Special dividend for 2006: 45.86p per share
Interim dividend for 2006: 3.00p per share
Final dividend for 2006: 7.00p per share
Interim dividend for 2007: 3.30p per share

Dividends paid

Proposed for approval by the shareholders at the AGM
Final dividend for 2006: 7.00 per share
Final dividend for 2007: 7.70p per share

2007
£m

–
–
15.1
7.1

22.2

–
16.6

2006
£m

98.5
6.5
–
–

105.0

15.1
–

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

13. Property, plant and equipment

At 3 October 2005, net of accumulated depreciation
Reclassiﬁcation – cost
Reclassiﬁcation – accumulated depreciation
Additions
Disposals at cost
Depreciation eliminated on disposals
Depreciation charge for the year

At 1 October 2006, net of accumulated depreciation
Acquisitions
Exchange differences
Additions
Disposals at cost*
Depreciation eliminated on disposals
Assets classiﬁed as held for sale – cost**
Assets classiﬁed as held for sale – depreciation**
Depreciation charge for the year

At 30 September 2007, net
of accumulated depreciation

At 30 September 2007
Cost (gross carrying amount)
Accumulated depreciation and impairment

Net carrying amount

At 1 October 2006
Cost (gross carrying amount)
Accumulated depreciation and impairment

Net carrying amount

At 2 October 2005
Cost (gross carrying amount)
Accumulated depreciation and impairment

Net carrying amount

Freehold
land and
buildings
£m

Leasehold
land and
Plant and
buildings machinery
£m

£m

Fixtures,
ﬁttings,
tools and
equipment
£m

47.5
(1.6)
–
0.9
–
–
(0.7)

46.1
14.2
0.4
0.4
(5.9)
0.6
–
–
(0.9)

54.9

60.1
(5.2)

54.9

51.0
(4.9)

46.1

51.7
(4.2)

47.5

14.1
1.6
–
1.9
–
–
(0.5)

17.1
11.7
0.4
0.2
–
–
–
–
(0.5)

28.9

32.4
(3.5)

28.9

20.1
(3.0)

17.1

16.6
(2.5)

14.1

79.2
–
–
12.8
(2.2)
2.0
(17.1)

74.7
9.5
0.3
13.0
(11.4)
10.9
(9.4)
5.7
(16.0)

90.7
–
–
13.6
(12.6)
8.6
(20.0)

80.3
3.1
–
5.8
(22.1)
17.5
(1.7)
0.6
(19.4)

Total
£m

231.5
–
–
29.2
(14.8)
10.6
(38.3)

218.2
38.5
1.1
19.4
(39.4)
29.0
(11.1)
6.3
(36.8)

77.3

64.1

225.2

209.1
(131.8)

77.3

207.1
(132.4)

74.7

196.5
(117.3)

79.2

188.5
(124.4)

64.1

203.4
(123.1)

80.3

202.4
(111.7)

90.7

490.1
(264.9)

225.2

481.6
(263.4)

218.2

467.2
(235.7)

231.5

* £5.8m of disposals (net of depreciation) relates to the sale and leaseback transaction which occurred in April 2007.

Further details are given in Note 31.

** Further details are given in Note 21.

Britvic plc Annual Report 2007

14. Intangible assets

Cost as at 3 October 2005, net of accumulated amortisation
Additions
Disposals at cost
Amortisation eliminated on disposal
Amortisation charge for the year

Cost as at 1 October 2006, net of accumulated amortisation
Acquisitions
Exchange differences
Additions
Amortisation charge for the year

At 30 September 2007

At 30 September 2007
Cost (gross carrying amount)
Accumulated amortisation and impairment

Net carrying amount

At 1 October 2006
Cost (gross carrying amount)
Accumulated amortisation and impairment

Net carrying amount

At 2 October 2005
Cost (gross carrying amount)
Accumulated amortisation and impairment

Net carrying amount

Trademarks,
franchise
rights and
customer
lists
£m

Software
costs
£m

Goodwill
£m

–
–
–
–
–

–
90.0
2.7
–
(0.1)

92.6

92.7
(0.1)

92.6

–
–

–

–
–

–

25.2
3.8
(0.9)
0.5
(4.7)

23.9
–
–
4.9
(5.6)

23.2

38.6
(15.4)

23.2

33.7
(9.8)

23.9

30.8
(5.6)

25.2

71.5
–
–
–
–

71.5
55.5
1.6
3.0
–

131.6

131.6
–

131.6

71.5
–

71.5

71.5
–

71.5

Total
£m

96.7
3.8
(0.9)
0.5
(4.7)

95.4
145.5
4.3
7.9
(5.7)

247.4

262.9
(15.5)

247.4

105.2
(9.8)

95.4

102.3
(5.6)

96.7

Goodwill is not amortised. Instead it is subject to an impairment review at each reporting date in accordance with IAS 36
‘Intangible Assets’. These reviews have been and will continue to be carried out annually or more frequently if there are
indicators of impairment.

An agreement has been reached with the original vendors of Red Devil to pay an additional £3.0m deferred consideration.
Goodwill has been revised upwards to reﬂect a change in contingent consideration. Payment will be made in instalments
between August 2007 and September 2010.

Further details on the provisional goodwill arising on the acquisition of Britvic Ireland and the intangible assets identiﬁed as part
of that acquisition (trademarks, franchise rights and customer lists) can be found in Note 15. The goodwill and intangible assets
are valued in euros and translated at the reporting date.

Software costs are capitalised at cost. These intangible assets have been assessed as having ﬁnite lives and are amortised
under the straight-line method over a period of three to seven years. These assets are tested for impairment where an indicator
of impairment arises.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

15. Business combination

Acquisition of Britvic Ireland
On 29 August 2007, the Group acquired 100% of the issued share capital of the companies detailed below for a cash
consideration of €255.7m (translated at £173.3m). Included in this amount are directly attributable costs of €8.8m (translated
at £5.9m). These costs relate in the main to advisors’ fees.

Company name

Ballygowan Limited

Aquaporte Limited

Name change effective
from 1 October 2007

No change

Status

Principal activity

Trading Manufacture and marketing of natural mineral water

Trading

Supply of water-coolers and bottled water

C&C (Ireland) Limited

Britvic Ireland Limited

Trading Manufacture and marketing of soft drinks

C&C (Belfast) Limited

Britvic Northern Ireland Limited

Trading Marketing and distribution of soft drinks

C&C (Wholesale) Limited Britvic Licensed Wholesale Limited Trading Wholesale of soft drinks to the licensed trade

William J Dwan & Sons No change
Limited

Trading Wholesale of soft drinks to the licensed trade

C&C (Logistics) Limited

Britvic Logistics Limited

Trading

Provision of distribution services

C&C (Munster) Limited

Britvic (Munster) Limited

Dormant n/a

John Mulligan & Sons
Limited

No change

C&C Pension Trust (1973) Britvic Northern Ireland
Limited

Pension Trust Limited

Britvic Limited

No change

Dormant n/a

From the date of acquisition to 30 September 2007, the acquired businesses contributed £13.8m to revenue and £0.8m to
operating proﬁt before tax for the period. Britvic Ireland had an operating cash outﬂow of £5.7m for the period from acquisition
to the year-end.

The initial fair value/acquisition accounting for Britvic Ireland was determined provisionally. In accordance with IFRS 3,
adjustments to the fair value of assets acquired and liabilities assumed can be made during the 12 months from the
date of acquisition.

The difference between the fair value of the consideration paid and the fair value of the identiﬁable net assets acquired is
recognised as goodwill. Included in goodwill recognised are certain intangible assets that cannot be individually separated
and reliably measured due to their nature. These items include the favourable market presence which Britvic Ireland enjoys
and an assembled workforce.

Britvic plc Annual Report 2007

15. Business combination continued
The sterling carrying value shown of the net assets acquired shown in the table below has been calculated using the exchange
rate on the date of acquisition which was £1: €1.4758.

Intangible assets
Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Pension liability
Deferred tax asset/(liability)
Current taxation liabilities

Net assets acquired

Purchased goodwill

Total cost of investment satisﬁed by cash consideration

Net cash outﬂow arising on acquisition of shares in Britvic Ireland
Cash consideration
Cash and cash equivalents acquired

Cash ﬂow on acquisition of shares in Britvic Ireland net of cash acquired

Provisional
Book
fair value
value adjustments
€m

€m

Carrying
value
€m

Carrying
value
£m

–
57.0
18.5
46.9
8.8
(55.0)
(18.2)
5.0
(2.5)

60.5

132.9
(0.2)
1.8
(2.4)
–
(1.2)
(5.1)
(13.0)
0.5

113.3

132.9
56.8
20.3
44.5
8.8
(56.2)
(23.3)
(8.0)
(2.0)

173.8

81.9

255.7

90.0
38.5
13.8
30.2
5.9
(38.0)
(15.8)
(5.4)
(1.4)

117.8

55.5

173.3

173.3
(5.9)

167.4

The cash outﬂow during the year was £160.6m with the remaining £6.8m cash outﬂow accrued.

A description of each of the signiﬁcant provisional fair value adjustments is given below:

• Intangible assets – an assessment has provisionally identiﬁed the following classes of intangible assets: franchise

arrangements, customer lists and brand names. The valuation assigned to each class, and useful economic life of intangibles,
has been provisionally determined as at the date of acquisition based on the Britvic Group’s accounting policies.

• Property, plant and equipment – the assets held have been provisionally assessed based on market values of land and buildings

and a provisional impairment review of plant and machinery has been performed.

• Inventories – provisional alignment to Britvic Group’s accounting policies in respect of the basis of inventory provisions and

categorisation of assets.

• Trade and other receivables – provisional alignment with Britvic Group’s accounting policy to write off marketing costs

as incurred.

• Trade and other payables – provisional alignment with Britvic Group’s accounting policy to recognise a holiday pay accrual.

• Pension liability – a provisional valuation of the pension liabilities in respect of the two schemes relating to the business has

been provided by a qualiﬁed actuary.

• Deferred tax liability – provisional recognition of deferred tax assets/liabilities in respect of the other fair value adjustments.

The Britvic Ireland companies that have been acquired in this business combination had not previously been deemed a group
and therefore had not produced consolidated ﬁnancial information. As such there are certain costs that are not easily identiﬁable
and it is therefore impracticable to state what the contribution to Group revenue and net proﬁt would have been had the business
combination completed on the ﬁrst day of the ﬁnancial period.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

16. Goodwill impairment considerations
Goodwill acquired through business combinations has been allocated by senior management to seven individual cash-generating
units for impairment testing as follows:

• Orchid;

• Red Devil;

• Tango;

• Robinsons;

• Britvic Soft Drinks business;

• Water Business; and

• Britvic Ireland.

The recoverable amount of the goodwill allocated to these units has been determined based on a value in use calculation.
To calculate this, 20-year cash ﬂow projections are used based on ﬁnancial budgets approved by senior management covering
a ﬁve-year period. A 20-year cash ﬂow period has been used to reﬂect the considered longevity of the cash-generating units.
The post-tax discount rate applied to post-tax cash ﬂow projections is 8% (2006: 8%) and cash ﬂows beyond the one-year period
are extrapolated using a growth rate in line with senior management expectations of growth. No growth in real terms is assumed
beyond ﬁve years.

Carrying amount of goodwill

Red
Devil
£m

At 30 September 2007 5.1

At 1 October 2006

2.1

Orchid
£m

12.4

Tango
£m

Robinsons
£m

8.9

38.6

BSD
£m

7.8

Water
£m

1.7

Britvic
Ireland
£m

57.1

–

Total
£m

131.6

71.5

Key assumptions used in value in use calculation
The following describes each key assumption on which management has based its cash ﬂow projections to undertake
impairment testing of goodwill.

Growth rates – reﬂect senior management expectations of volume growth.

Discount rates – reﬂect senior management’s estimate of the cost of capital. The estimated cost of capital is the benchmark
used by management to assess operating performance and to evaluate future capital investment proposals.

Budgeted marginal contribution – ﬁnancial budgets approved by senior management are used to determine the value assigned
to budgeted marginal contribution.

Advertising and promotional spend – ﬁnancial budgets approved by senior management are used to determine the value
assigned to advertising and promotional spend.

Raw materials price, production and distribution costs, selling costs and other overhead inﬂation – the basis used
to determine the value assigned to inﬂation is forecast consumer price indices of 2.5%.

Sensitivity to changes in assumptions
There are no reasonably possible changes in key assumptions which would cause the carrying value of these units to exceed
their recoverable amount.

Britvic plc Annual Report 2007

17. Operating lease premiums

Operating lease premiums

This amount relates to the un-amortised element of lease premiums paid on inception of operating leases.

18. Inventories

Raw materials
Finished goods
Consumable stores
Returnable packaging

Total inventories at lower of cost and net realisable value

19. Trade and other receivables (current)

Trade receivables
Other receivables
Prepayments

2007
£m

2.4

2007
£m

9.0
26.2
5.4
4.7

45.3

2007
£m

113.3
2.6
13.9

129.8

2006
£m

2.4

2006
£m

7.9
15.9
6.9
1.0

31.7

2006
£m

87.2
0.9
11.5

99.6

Trade receivables are non-interest bearing and are generally on credit terms usual for the business in which the Group operates.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

20. Cash and cash equivalents

Cash at bank and in hand

2007
£m

27.3

2006
£m

19.2

During the year short-term deposits are made for varying periods of between one day and one month depending on the
immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. The fair value of
cash and cash equivalents is £27.3m (2006: £19.2m).

At 30 September 2007, the Group had available £105.0m (2006: £165.0m) of un-drawn committed borrowing facilities in respect
of which all conditions precedent had been met.

For the purposes of the consolidated statement of cash ﬂows, cash and cash equivalents comprise the following:

Cash at bank and in hand

The Group operates a cash pooling approach with one bank such that there is a net cash position.

21. Assets held for sale

Net transfer from property, plant and equipment

2007
£m

27.3

2007
£m

4.8

2006
£m

19.2

2006
£m

–

Assets held for sale relates to those assets which will be sold as part of the outsourcing of the secondary distribution network.
The transfer of title of these assets was completed on 1 October 2007. The assets held for sale were written down to net
realisable value in the year resulting in an exceptional charge of £0.5m (Note 5).

22. Issued share capital
The issued share capital as at 30 September 2007 and 1 October 2006 comprised 216,037,795 ordinary shares of £0.20 each,
totalling £43,207,559.

The ordinary shares carry voting rights of one vote per share. There are no restrictions placed on the distribution of dividends,
or the return of capital on a winding up or otherwise.

Authorised
327,500,000 ordinary shares of £0.20 each
Ordinary shares issued and fully paid
216,037,795 ordinary shares of £0.20 each

2007
£m

65.5

43.2

2006
£m

65.5

43.2

Britvic plc Annual Report 2007

Own
shares
£m

Share
scheme
reserve
£m

Hedging
reserve
£m

Other Translation
reserve
£m

reserves
£m

23. Reconciliation of movements in equity

Called
up share
capital
£m

Share
premium
account
£m

12.3

25.4

At 3 October 2005
Adoption of IAS 39
on 3 October 2005

At 3 October 2005
(Restated)
Reserve changes as
a result of IPO
Total recognised
income for the year
Issue of shares
Other temporary
tax differences
Own shares purchased
for share schemes
Movement in share
based schemes
Payment of dividends

At 1 October 2006
Total recognised
income for the year
Own shares purchased
for share schemes
Own shares issued
for share schemes
Movement in share
based schemes
Payment of dividend
Other

–

12.3

30.6

–
0.3

–

–
–

–

25.4

(25.4)

–
2.5

–

–
–

–

–
–
–

–

–
–
–

–

–
–

–

(0.5)

–
–

–

(13.2)

–
–
–

43.2

2.5

(0.5)

At 30 September 2007 43.2

2.5

(10.3)

0.8

–

0.8

–

–
(2.8)

–

6.5
–

4.5

–

4.0
–
–

5.3

–

(1.0)

–

0.6
–

–

–
–

(0.4)

2.3

–

–
–
–

1.9

7.1

–

7.1

(7.1)

–
–

–

–
–

–

–
–
–

–

3.4

(3.2)

Retained
earnings
£m

(23.4)

Total
£m

22.2

–

(1.0)

(23.4)

21.2

1.9

17.9
–

0.1

–

1.5
(105.0)

(107.0)

–

18.5
–

0.1

(0.5)

8.0
(105.0)

(57.7)

–

–
–

–

–
–

–

2.9

88.1

93.3

–

–
–
–

2.9

–

(13.2)

(0.2)

0.1
(22.2)
–

(41.2)

–

4.1
(22.2)
–

4.3

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

23. Reconciliation of movements in equity continued

Nature and purpose of other reserves
Share premium
The share premium account is used to record the excess of proceeds over nominal value on the issue of shares.

Own shares
The own shares account is used to record purchases by the Group of its own shares, which will be distributed to employees
as and when share awards made under the Britvic employee share plans vest.

Share scheme reserve
The share scheme reserve is used to record the movements in equity corresponding to the cost recognised in respect of equity-
settled share based payment transactions and the subsequent settlement of any awards that vest either by issue or purchase
of the Group’s shares.

Hedging reserve
The hedging reserve records movements in the fair value of forward exchange contracts and interest rate and cross currency swaps.

Translation reserve
The translation reserve includes cumulative net exchange differences on translation into sterling of balances and transactions
denominated in currencies other than sterling.

Reserve changes as a result of IPO

Issued share capital
Issue of 4,295,636,424,718 ordinary shares with a nominal value of £0.0001 to the existing shareholders
of Britannia Soft Drinks Limited

Consolidation on 18 November of the total issued share capital of 4,295,648,700,000 ordinary shares of
£0.0001 each at a ratio of one for every 20,000. This resulted in a revised nominal value of £2 per share.
The nominal value of each share was subsequently reduced from £2 to £0.20 per share by a court approved
reduction of share capital on 24 November 2005 creating additional distributable reserves

Elimination of Britannia Soft Drinks Limited’s share capital

Share premium account
Elimination of Britannia Soft Drinks Limited’s share premium account

Other reserves
Elimination of Britvic plc’s investment in Britannia Soft Drinks Limited against other reserves

Retained earnings
Additional reserves were created by a court approved reduction of capital on 24 November 2005 as described above

Elimination of Britvic plc’s investment in Britannia Soft Drinks Limited against retained earnings (excess of cost
of investment over Britannia Soft Drinks Limited’s share capital, share premium and other reserves balances)

£m

429.6

(386.7)

(12.3)

30.6

(25.4)

(7.1)

386.7

(384.8)

1.9

Britvic plc Annual Report 2007

24. Interest bearing loans and borrowings

Current
Unsecured bank loans

Non-current
Unsecured bank loans
Private placement notes
Less unamortised issue costs

Total

2007
£m

2006
£m

(13.1)

(17.5)

(195.3)
(223.7)
1.2

(417.8)

(285.0)
–
0.7

(284.3)

Private placement notes
On 20 February 2007, Britvic plc issued US$375m and £38m of Senior Notes (‘the Notes’) in the United States Private Placement
market. The proceeds of the issue were used to repay and cancel a £150m term loan, with the remainder being used to repay
the amounts drawn on the Group’s revolving credit facility. The amount, maturity and interest terms of the Notes are shown in
the table below:

Series

A
B
C
D
E
F

Tranche

7 year
7 year
7 year
10 year
12 year
12 year

Maturity date

Amount

Interest terms

20 February 2014
20 February 2014
20 February 2014
20 February 2017
20 February 2019
20 February 2019

US$87m
US$15m
£25m (US$49m)
US$147m
US$126m
£13m (US$26m)

Fixed at 5.80%
US$ LIBOR + 0.5%
Fixed at 6.11%
Fixed at 5.90%
Fixed at 6.00%
Fixed at 5.94%

Swap
interest terms

Fixed at 6.10%
Fixed at 6.07%
n/a
Fixed at 5.98%
Fixed at 5.98%
n/a

Britvic plc makes quarterly and semi-annual interest payments in the currency of issue, with the ﬁrst payment having been made
on 21 May 2007. The Notes are unsecured and rank pari passu in right of repayment with other senior unsecured indebtedness
of the Company. In order to manage the risk of foreign currency and interest rate ﬂuctuations, the Group has entered into
currency swaps whereby ﬁxed/ﬂoating US dollar interest is swapped for ﬁxed sterling interest. The swap contracts have the
same duration and other critical terms as the borrowings which they hedge.

Covenants on these Notes include a term which states that Britvic plc must offer to repay the Notes should a change in control
of the Group occur.

Bank loans
The unsecured bank loans classiﬁed as current were repayable in October 2007 (2006: May 2007) and were rolled over. These loans
attract interest at a rate of 6.35% (2006: 5.25%). The unsecured ﬂoating rate bank loans classiﬁed as non-current are repayable in
May 2010 (2006: May 2010) and attract interest at an average rate of 6.62% for sterling denominated loans and 4.77% for euro
denominated loans. Interest on bank loans is re-priced at regular intervals. For further details, please refer to Note 27.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

24. Interest bearing loans and borrowings continued

Analysis of changes in interest-bearing loans and borrowings

Current liabilities
Non-current liabilities

At the beginning of the period
Issue of the Notes
New unsecured loans
Issue costs of new loans/Notes
Amortisation of issue costs
Borrowings repaid
Net translation gain
Accrued interest

At the end of the period

2007
£m

(17.5)
(284.3)

(301.8)
(228.5)
(323.1)
0.8
(0.3)
419.4
4.5
(1.9)

2006
£m

(13.9)
(219.3)

(233.2)
–
(667.0)
0.1
(0.1)
598.4
–
–

(430.9)

(301.8)

As a result of applying hedge accounting, the net translation gain shown above includes a gain £6.4m which has been offset by
an equivalent change in the fair value of the swap arrangements.

25. Pensions
The Group operates a pension scheme, the Britvic Pension Plan (‘BPP’), which has both a deﬁned beneﬁt fund and a deﬁned
contribution fund. The deﬁned beneﬁt section of the BPP was closed on 1 August 2002, and since this date new employees have
been eligible to join the deﬁned contribution section of the BPP. The funds are administered by trustees and are independent of
the Group’s ﬁnances. Contributions are paid into the funds in accordance with the recommendations of an independent actuary.
The latest formal actuarial valuation for contribution purposes was carried out as at 31 March 2004, with a further valuation
carried out at 31 March 2007 currently being ﬁnalised. As a result of the latest formal valuation, further contributions of £30m,
£30m and £10m were made in March 2005, December 2005 and December 2006 respectively. An additional annual contribution
of £10m will be made in December 2007-2010 in order to eliminate the funding deﬁcit in the scheme arising at that time.

The amount recognised as an expense in relation to the BPP deﬁned contribution scheme in the income statement for 2007
was £1.4m (2006: £1.3m).

In addition, as a result of the acquisition of Britvic Ireland on 29 August 2007, the company inherited a further pension scheme
in which its new employees in Northern Ireland participate, the C&C Pension Trust (1973) Ltd (‘CCPT’). Also, following the
acquisition the new employees in the Republic of Ireland (‘ROI’) have continued to participate in a number of C&C Group pension
funds (C&C) until new arrangements are ﬁnalised in the 12 months following acquisition. Both CCPT and C&C pension schemes
have a deﬁned beneﬁt section closed on 28 February 2006, and since this date new employees have been eligible to join the
deﬁned contribution section. The latest valuation for both schemes for contribution purposes was carried out as at 31 December
2005. A provisional valuation of these schemes at the acquisition date has been carried out by a qualiﬁed actuary based on
information available. Changes to this provisional valuation can be made up to twelve months after the acquisition date.

The assets and liabilities of the pension schemes were valued on an IAS 19 basis at 30 September 2007 by a qualiﬁed actuary.

Britvic plc Annual Report 2007

25. Pensions continued

Principal assumptions
Financial assumptions

Discount rate
Rate of compensation increase
Expected long-term return on plan assets
Pension increases (‘LPI’)
Inﬂation assumption

2007
%
ROI

5.40
4.10
7.00
3.00
2.25

2007
%
GB

5.90
4.90
6.17
3.40
3.40

2006
%
GB

5.00
4.50
6.34
3.00
3.00

To develop the expected long-term rate of return on assets assumption, the Group considered the level of expected returns
on risk free investments (‘primarily government bonds’), the historical level of the risk premium associated with the other asset
classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for
each asset class was then weighted based on the target asset allocation to develop the expected long-term rate on assets
assumption for the portfolio.

Demographic assumptions
The most signiﬁcant non-ﬁnancial assumption is the assumed rate of longevity. This is based on standard actuarial tables known
as PA92. An allowance for future improvements in longevity has been also included. The following life expectancy assumptions
have been used:

Current pensioners (at age 65) – males
Current pensioners (at age 65) – females
Future pensioners currently aged 45 (at age 65) – males
Future pensioners currently aged 45 (at age 65) – females

2007
Years
ROI

19.0
21.9
20.5
23.4

2007
Years
GB

19.9
22.8
21.1
24.0

2006
Years
GB

20.6
23.6
22.5
25.3

The mortality assumptions used to calculate the pension obligation have been revised in 2007 following a mortality investigation
carried out as part of the ongoing actuarial valuation of the Britvic Pension Plan at 31 March 2007.

Net beneﬁt expense

Current service cost
Special termination beneﬁts
Interest cost on beneﬁt obligation
Expected return on plan assets
Curtailment gain

Net expense

2007
C&C
£m

(0.2)
–
(0.2)
0.2
–

(0.2)

2007
CCPT
£m

–
–
(0.1)
0.1
–

–

2007
BPP
£m

(10.7)
–
(22.7)
24.4
5.6

(3.4)

2007
Total
£m

(10.9)
–
(23.0)
24.7
5.6

(3.6)

2006
Total
£m

(11.6)
(0.5)
(20.7)
21.8
1.6

(9.4)

The net expense detailed above is all recognised in arriving at net proﬁt from continuing operations before tax and ﬁnance
costs/income, and is included within cost of sales, selling and distribution costs and administration expenses.

The pension curtailment is triggered by the transfer of Group employees under the outsourcing arrangements of the secondary
distribution network. Those employees that are members of the BPP will no longer accrue future entitlement, which gives rise
to the curtailment gain.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

25. Pensions continued

Taken to the statement of recognised income and expense

Actual return on scheme assets
Less: Expected return on scheme assets

Other actuarial gains/(losses)

Actuarial gains/(losses) taken to the statement
of recognised income and expense

Net (liability)/surplus

Present value of beneﬁt obligation
Fair value of plan assets

Net (liability)/surplus

2007
C&C
£m

0.5
(0.2)

0.3
–

0.3

2007
C&C
£m

(39.7)
34.3

(5.4)

Movements in the present value of beneﬁt obligation are as follows:

At start of period
Acquisition at 29 August 2007
Currency movement
Current service cost
Special termination beneﬁts*
Member contributions
Interest cost on beneﬁt obligation
Beneﬁts paid
Curtailment gain
Actuarial gains/(losses)

At end of period

2007
C&C
£m

–
(38.1)
(1.2)
(0.2)
–
–
(0.2)
–
–
–

(39.7)

2007
CCPT
£m

0.6
(0.1)

0.5
0.4

0.9

2007
CCPT
£m

(23.0)
13.7

(9.3)

2007
CCPT
£m

–
(23.3)
–
–
–
–
(0.1)
–
–
0.4

(23.0)

2007
BPP
£m

37.2
(24.4)

12.8
47.3

2007
Total
£m

38.3
(24.7)

13.6
47.7

2006
Total
£m

31.8
(21.8)

10.0
(20.8)

60.1

61.3

(10.8)

2007
BPP
£m

(422.2)
431.3

9.1

2007
BPP
£m

(454.5)
–
–
(10.7)
–
(2.1)
(22.7)
14.9
5.6
47.3

2007
Total
£m

(484.9)
479.3

(5.6)

2007
Total
£m

(454.5)
(61.4)
(1.2)
(10.9)
–
(2.1)
(23.0)
14.9
5.6
47.7

2006
Total
£m

(454.5)
388.7

(65.8)

2006
Total
£m

(412.2)
–
–
(11.6)
(0.5)
(2.4)
(20.7)
12.1
1.6
(20.8)

(422.2)

(484.9)

(454.5)

The current service cost excludes contributions made by employees of £2.1m (2006: £2.4m).

* Special termination beneﬁts relate to redundancy payments.

Britvic plc Annual Report 2007

25. Pensions continued

Movements in the fair value of plan assets are as follows:

At start of period
Acquisition at 29 August 2007
Currency movement
Expected return on plan assets
Actuarial gains
Employer contributions
Member contributions
Beneﬁts paid

At end of period

2007
C&C
£m

–
32.6
1.0
0.2
0.3
0.2
–
–

34.3

2007
CCPT
£m

–
13.0
–
0.1
0.5
0.1
–
–

13.7

Categories of scheme assets as a percentage of the fair value of total scheme assets

Equities
Bonds and gilts
Cash

Total

2007
C&C
£m

30.8
3.5
–

34.3

2007
CCPT
£m

12.2
0.8
0.7

13.7

2007
BPP
£m

246.0
184.4
0.9

431.3

2007
Total
£m

289.0
188.7
1.6

479.3

Categories of scheme assets as a percentage of the expected return on assets

Equities
Bonds and gilts
Cash

Total

2007
C&C
£m

0.2
–
–

0.2

2007
CCPT
£m

0.1
–
–

0.1

2007
BPP
£m

17.2
7.2
–

24.4

2007
Total
£m

17.5
7.2
–

24.7

History of experience gains and losses

Fair value of schemes assets
Present value of deﬁned beneﬁt obligations

Deﬁcit in the schemes

Experience adjustments arising on plan liabilities
Experience adjustments arising on plan assets

2007
BPP
£m

388.7
–
–
24.4
12.8
18.2
2.1
(14.9)

431.3

2007
Total
%

60
40
–

100

2007
Total
%

71
29
–

100

2007
£m

479.3
(484.9)

(5.6)

(17.2)
13.6

2007
Total
£m

388.7
45.6
1.0
24.7
13.6
18.5
2.1
(14.9)

479.3

2006
Total
£m

226.3
161.3
1.1

388.7

2006
Total
£m

15.1
6.6
0.1

21.8

2006
£m

388.7
(454.5)

(65.8)

(2.0)
10.0

2006
Total
£m

327.6
–
–
21.8
10.0
39.0
2.4
(12.1)

388.7

2006
Total
%

58
42
–

100

2006
Total
%

69
30
1

100

2005
£m

327.6
(412.2)

(84.6)

–
32.6

Normal contributions of £8.5m and additional contributions of £10m are expected to be paid into the pension scheme during
the 2008 ﬁnancial year.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

26. Trade and other payables (current)

Trade payables
Other payables
Accruals and deferred income
Other taxes and social security

27. Financial instruments

2007
£m

110.8
14.3
60.7
17.4

203.2

2006
£m

92.3
9.3
27.9
18.2

147.7

Overview
The Group’s principal ﬁnancial instruments comprise derivatives, borrowings and overdrafts, cash and cash equivalents. These
ﬁnancial instruments are used to manage funding and liquidity requirements. Other ﬁnancial instruments which arise directly
from the Group’s operations include trade receivables and payables (see Notes 19 and 26 respectively).

The main risks arising from the Group’s ﬁnancial instruments are foreign currency risk, commodity price risk, interest rate risk,
credit risk and liquidity risk. The Board of Directors review and agree policies for managing these risks as summarised below.

Foreign currency risk
The Group has operations in euro-denominated countries. Foreign exchange risk is primarily in respect of exposure to ﬂuctuations
to the sterling-euro rate of exchange. The Group ﬁnances foreign operations mainly through the use of foreign currency
borrowings which hedge the net investment in foreign operations.

The Group also has transactional exposures arising from purchases of prime materials and commercial assets in currencies other
than the functional currency of the individual group entities. Such purchases are made in the currencies of US dollars and euros.
For the period ended 30 September 2007, the Group has hedged 70% (2006: 70%) of forecast exposures 12 months in advance
using forward foreign exchange contracts.

Where funding is raised in a currency other than the currency ultimately required by the Group, cross currency interest rate
swaps are used to convert the cash ﬂows to the required currency. These swaps have the same duration and other critical
terms as the underlying borrowing.

Commodity price risk
The main commodity price risk arises in the purchases of prime materials, being PET, sugar, cans and frozen concentrated orange
juice. Where it is considered commercially advantageous, the Group enters into ﬁxed price contracts with suppliers to hedge
against unfavourable commodity price changes.

Interest rate risk
The Group borrows in desired currencies at both ﬁxed and ﬂoating rates of interest and then uses interest rate swaps to generate
the desired interest rate proﬁle and to manage the Group’s exposure to interest ﬂuctuation. At 30 September 2007, £222.9m
(2006: £100.0m) of the Group’s borrowings were at ﬁxed rates after taking account of interest rate swaps.

Credit risk
There are no signiﬁcant concentrations of credit risk within the Group. The maximum credit risk exposure relating to ﬁnancial
assets is represented by carrying value as at the balance sheet date.

Liquidity risk
The Group’s objective is to maintain a balance between continuity of funds and ﬂexibility through the use of bank loans and
overdrafts. The bank loans entered into by the Group are unsecured.

Britvic plc Annual Report 2007

27. Financial instruments continued

Interest rate risk proﬁle of ﬁnancial assets and liabilities
The interest rate proﬁle of the ﬁnancial assets and liabilities of the Group by maturity date is as follows:

Fixed rate

Notes*

Bank loans*

1–2 years
£m

2–3 years
£m

3–4 years
£m

4–5 years
£m

More than
5 years
£m

2007

Total
£m

–

(222.9)

1–2 years
£m

2–3 years
£m

3–4 years
£m

4–5 years
£m

More than
5 years
£m

2006

Total
£m

–

(100.0)

–

(100.0)

Within
1 year
£m

–

Within
1 year
£m

–

* Includes the effects of the related ﬂoating to ﬁxed interest rate swaps on ﬂoating borrowings discussed below.

Floating rate

Cash
Bank loans
Interest rate swap*
Foreign currency contracts

* See Note 24.

Within
1 year
£m

27.3
(13.1)
–
(0.2)

Within
1 year
£m

19.2
(17.5)
–
(1.0)

1–2 years
£m

2–3 years
£m

3–4 years
£m

4–5 years
£m

–
–
–
–

–
(194.9)
–
–

–
–
–
–

1–2 years
£m

2–3 years
£m

3–4 years
£m

4–5 years
£m

–
–
–
–

–
(184.3)
0.5
–

–
–
–
–

More than
5 years
£m

–
–
(3.4)

More than
5 years
£m

–
–
–
–

2007

Total
£m

27.3
(208.0)
(3.4)
(0.2)

2006

Total
£m

19.2
(201.8)
0.5
(1.0)

Interest on ﬁnancial instruments classiﬁed as ﬂoating rate is re-priced at intervals of less than one year. Interest on ﬁnancial
instruments classiﬁed as ﬁxed rate is ﬁxed until the maturity of the instrument. The other ﬁnancial instruments of the Group
that are not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

27. Financial instruments continued

Fair values of ﬁnancial assets and ﬁnancial liabilities
Set out below is a comparison by category of carrying amounts and fair values of all of the Group’s ﬁnancial instruments, except
trade and other receivables and payables.

Financial assets
Cash
Forward currency contracts
Interest rate swap

Financial liabilities
Interest-bearing loans and borrowings (bank loans and US$ Notes):

Fixed rate borrowings
Floating rate borrowings
Forward currency contracts
Interest rate swap

Book value
2007
£m

Fair value
2007
£m

Book value
2006
£m

Fair value
2006
£m

27.3
0.1
–

(222.9)
(208.0)
(0.3)
(3.4)

27.3
0.1
–

(244.9)
(208.0)
(0.3)
(3.4)

19.2
0.1
0.5

(100.0)
(201.8)
(1.0)
–

19.2
0.1
0.5

(100.0)
(201.8)
(1.0)
–

The fair value of derivatives and borrowings has been calculated by discounting the expected future cash ﬂows at prevailing
interest rates.

The fair value of the current trade and other receivables and payables approximate their book value.

Hedges
Cash ﬂow hedges
At 30 September 2007, the Group held 27 (2006: 25) US dollar and 21 (2006: 58) euro forward exchange contracts designated
as hedges of expected future purchases from overseas suppliers in US dollars and euros for which the Group believe to be
‘highly probable’ transactions. The forward currency contracts are being used to hedge the foreign currency risk of these ‘highly
probable’ transactions. The terms of these contracts are as follows:

Forward contracts to hedge expected future purchases
2007
US$10,128,000
EUR22,881,000
2006
US$7,084,000
EUR43,548,000

Maturity range

Average
exchange rate

31 Oct 07 – 29 Aug 08
31 Oct 07 – 28 Apr 08

31 Oct 06 – 28 Sept 07
31 Oct 06 – 28 Sept 07

£/US$2.00
£/EUR1.46

£/US$1.81
£/EUR1.48

The terms of the forward currency contracts have been negotiated to match the terms of the commitments. The cash ﬂow
hedges of the expected future purchases within the 12 months of the balance sheet date have been assessed to be effective.

In February 2007, Britvic plc issued US$375m and £38m of Senior Notes in the United States Private Placement market.
As a result of this transaction further cash ﬂow hedges were entered into. These are detailed in Note 24.

Britvic plc Annual Report 2007

28. Other non-current liabilities

Deferred consideration

2007
£m

1.2

2006
£m

–

This amount relates to the element of additional deferred consideration due to the vendors of Red Devil payable after one year.
Further detail is given in Note 14.

29. Share-based payments
The expense recognised for share-based payments in respect of employee services received during the year to 30 September
2007 is £8.1m (2006: £6.9m). All of that expense arises from transactions which are expected to be equity-settled share-based
payment transactions.

The Britvic Share Incentive Plan (‘SIP’)
The SIP is an all-employee plan approved by HMRC. The plan allows for annual awards of free ordinary shares with a value of 3%
of salary (subject to HMRC maximum limits) together with an offer of matching shares on the basis of one free matching share
for each ordinary share purchased with a participant’s savings, up to a maximum of £75 per four-week pay period. Employees
are entitled to receive the annual free share award provided they are employed by the Company on the last day of each ﬁnancial
year and on the award date. There are no cash settlement alternatives.

Awards made during the year are shown in the table below. The fair value of these awards is equivalent to the intrinsic value
of the shares.

Annual free shares award
Matching shares award – one free share for every ordinary share purchased
Special free shares award after ﬂotation
Special matching shares award – two free shares for every ordinary share purchased

Number of shares
2006
2007

582,762
455,349
–
–

957,953
347,212
915,408
339,952

The Britvic Executive Share Option Plan (‘ESOP’)
The ESOP allows for options to buy ordinary shares to be granted to selected employees. The option price is the market price
of Britvic plc’s shares on the business day before the date of grant. Options become exercisable on the satisfaction of the
performance condition and remain exercisable until ten years after the date of grant.

The performance condition requires average growth in EPS of 7% pa over a three-year period in excess of the growth in RPI
over the same period for the options to vest in full. If EPS growth averages 3% per annum in excess of RPI growth, 40% of
the options will vest. Straight-line apportionment will be applied between these two levels to determine the number of options
that vest and no options will vest if average EPS growth is below the lower threshold.

In some circumstances, at the discretion of the Company, an optionholder who exercises his/her option may receive a cash
payment rather than the ordinary shares under option. The cash payment would be equal to the amount by which the market
value of the ordinary shares under option exceeds the option price. However, it is expected that this plan will be equity-settled
and as a consequence has been accounted for as such.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

29. Share-based payments continued
The following table illustrates the movements in the number of share options during the year.

Outstanding as at 3 October 2005
Granted during the year
Forfeited during the year

Outstanding as at 1 October 2006
Granted during the year
Forfeited during the year

Outstanding at 30 September 2007

Exercisable at 30 September 2007

Weighted
average
exercise
price
(pence)

–
245.0
245.0

245.0
245.0
245.0

245.0

–

Number
of share
options

–
1,644,828
(62,199)

1,582,629
1,673,929
(141,426)

3,115,132

–

The share options outstanding as at 30 September 2007 had a weighted average remaining contractual life of 8.7 years
(2006: 9.2 years) and had an exercise price of 245.0p (2006: 245.0p).

The weighted average fair value of options granted during the year was 44.7p (2006: 40.4p).

The fair value of equity-settled share options granted is estimated as at the date of grant using a binomial model, taking
account of the terms and conditions upon which the options were granted.

The following table lists the inputs to the model used for the year ended 30 September 2007.

Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Share price at date of grant (pence)
Exercise price (pence)

2007

2.9
20.0
4.8
5.0
242.0
245.0

2006

3.0
19.0
4.3
5.0
242.0
245.0

The expected volatility reﬂects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome.

Britvic plc Annual Report 2007

29. Share-based payments continued

The Britvic Performance Share Plan (‘PSP’)
The PSP allows for awards of ordinary shares to be made to selected employees subject to the satisfaction of a performance
condition. Different performance conditions apply to different groups of employees.

Awards granted to members of the senior leadership team are subject to a performance condition which measures the Company’s
total shareholder return (‘TSR’) relative to the TSR of a comparator group (consisting of 20 companies) over a three year
performance period. The awards will not vest unless the Company’s position in the comparator group is at least median.
At median 40% will vest, rising on a straight-line basis to 100% vesting at upper quartile.

Awards granted to members of the senior management team will be subject to a performance condition which requires average
growth in EPS of 7% pa over a three-year period in excess of the growth in RPI over the same period for the awards to vest in
full. If EPS growth averages 3% pa in excess of RPI growth, 40% of the awards will vest. Straight-line apportionment will be
applied between these two levels to determine the number of awards that vest and no awards will vest if average EPS growth
is below the lower threshold.

In addition, a transitional award has been made to members of both the senior leadership team and the senior management
team shortly after ﬂotation, at levels varying according to seniority. These awards will vest in tranches over a period of up to
three years, subject to the satisfaction of a performance condition. The performance condition requires the Company’s Return
on Invested Capital (‘ROIC’) to be at least 17% over the performance period for the award to vest in full. If ROIC is 15% over
the performance period, 50% of the award will vest. Straight-line apportionment will be applied between these two levels to
determine the percentage of awards that vest and no awards will vest if ROIC is below the lower threshold.

In some circumstances, at the discretion of the Company, vested awards may be satisﬁed by a cash payment rather than
a transfer of ordinary shares. However, it is expected that this plan will be equity-settled and as a consequence has been
accounted for as such.

The following table illustrates the movements in the number of shares during the year.

Outstanding as at 3 October 2005
Granted during the year
Lapsed during the year

Outstanding as at 1 October 2006
Granted during the year
Vested during the year
Lapsed during the year

Outstanding at 30 September 2007

Weighted average fair value of
shares granted during the year

Number of
shares subject to
TSR condition

Number of
shares subject to
EPS condition

Number of
shares subject to
ROIC condition

–
744,872
(44,163)

700,709
718,673
–
(97,348)

1,322,034

–
746,956
(63,465)

683,491
644,219
–
(167,075)

1,160,635

–
3,834,820
(170,458)

3,664,362
–
(1,367,136)
(158,760)

2,138,466

123.7p

222.1p

–

The fair value of equity-settled shares granted is estimated as at the date of grant using separate models as detailed below,
taking account of the terms and conditions upon which the shares were granted.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

29. Share-based payments continued
The following table lists the inputs to the models used for the year ended 30 September 2007.

Valuation model used
Dividend yield (%)
Expected volatility (%)
Share price at date of grant (pence)

Shares subject to
TSR condition

Shares subject to
EPS condition

Monte Carlo simulation
2.9
20.0
242.0

Share price at date
of grant adjusted for
dividends not received
during vesting period
2.9
n/a
242.0

The following table lists the inputs to the models used for the year ended 1 October 2006.

Shares subject to
TSR condition

Shares subject to
EPS condition

Shares subject to
ROIC condition

Valuation model used
Dividend yield (%)
Expected volatility (%)
Share price at date of grant (pence)

Monte Carlo simulation
3.0
19.0
242.0

30. Notes to the consolidated cash ﬂow statement

Analysis of net debt

Share price at date of
grant adjusted for
dividends not received
during vesting period
3.0
n/a
242.0

Grant adjusted for
dividends not received
during vesting period
3.0
n/a
242.0

2006
£m

19.2
–

19.2
(17.5)
(284.3)

(301.8)

(282.6)

Cash ﬂows
£m

8.1
–

8.1
4.4
(136.2)

(131.8)

(123.7)

Cash at bank and in hand
Overdrafts

Net cash
Debt due within one year
Debt due after more than one year

Debt

Net debt

Cash at bank and in hand
Overdrafts

Net cash
Debt due within one year
Debt due after more than one year

Debt

Net debt

Britvic plc Annual Report 2007

Exchange

Other
differences movement
£m

£m

–
–

–
–
4.5

4.5

2005
£m

19.4
–

19.4
(13.9)
(219.3)

(233.2)

(213.8)

–
–

–
–
(1.8)

(1.8)

Cash ﬂows
£m

(0.2)
–

(0.2)
(3.6)
(65.0)

(68.6)

(68.8)

2007
£m

27.3
–

27.3
(13.1)
(417.8)

(430.9)

(403.6)

2006
£m

19.2
–

19.2
(17.5)
(284.3)

(301.8)

(282.6)

31. Commitments and contingencies

Operating lease commitments
In April 2007, the Group completed a sale and leaseback transaction with regard to its Tamworth depot. The Group has entered
into a short-term lease which has no signiﬁcant arrangements of note.

Future minimum lease payments under non-cancellable operating leases are as follows:

Within one year
After one year but not more than ﬁve years
More than ﬁve years

Land and
buildings
£m

4.0
10.6
35.3

49.9

Land and
buildings
£m

3.5
10.4
36.8

50.7

Other
£m

6.1
11.7
1.9

19.7

Other
£m

5.4
8.0
2.0

15.4

2007

Total
£m

10.1
22.3
37.2

69.6

2006

Total
£m

8.9
18.4
38.8

66.1

The Group enters into sublease agreements in respect of some of its operating leases for property. At the reporting date the
Group had contracted with tenants for future minimum operating sublease receipts amounting to £1.9m (2006: £2.1m).

Capital commitments
At 30 September 2007, the Group has commitments of £2.0m (2006: £3.9m) relating to the acquisition of new plant and
machinery.

Contingent liabilities
The Group has the following contingent liabilities at 30 September 2007 and 1 October 2006:

The Group has assigned its interest in certain leasehold properties to other tenants. It remains liable for rentals due to the
landlord for any defaults on the part of these tenants. It is not practicable to estimate the amount or timing of rentals that may
default. However, the Directors do not expect that any potential default would result in a material claim against the Group.

Britvic plc Annual Report 2007

Notes to the Consolidated Financial Statements continued

32. Related party disclosures
The consolidated ﬁnancial statements include the ﬁnancial statements of Britvic plc and the subsidiaries listed in the table below.
Particulars of dormant and non-trading subsidiaries which do not materially affect the Group results have been excluded.

Name change effective from
1 October 2007

Country of
incorporation

% equity
interest

Name

Directly held
Britannia Soft Drinks Limited
Indirectly held
Britvic Holdings Limited
Britvic International Limited
Britvic Soft Drinks Limited
Robinsons Soft Drinks Limited
Orchid Drinks Limited
Red Devil Energy Drinks Limited
Robinsons (Finance) Limited
C&C (Ireland) Limited
C&C (Belfast) Limited
C&C (Wholesale) Limited
C&C (Logistics) Limited
Ballygowan Limited
Aquaporte Limited
William J Dwan & Sons Limited

–

–
–
–
–
–
–
Britvic Irish Holdings Limited
Britvic Ireland Limited
Britvic Northern Ireland Limited
Britvic Licensed Wholesale Limited
Britvic Logistics Limited
–
–
–

UK
UK
UK
UK
UK
UK
Republic of Ireland
Republic of Ireland
Republic of Ireland
Republic of Ireland
Republic of Ireland
Republic of Ireland
Republic of Ireland
Republic of Ireland

Key management personnel are deemed to be the Executive Directors of the Company and members of the Executive
Committee. The compensation payable to key management in the year is detailed below.

Short-term employee beneﬁts
Post-employment beneﬁts
Share-based payment

There were no other related party transactions requiring disclosure in these ﬁnancial statements.

2007
£m

1.8
0.5
2.1

4.4

Britvic plc Annual Report 2007

100

100
100
100
100
100
100
100
100
100
100
100
100
100
100

2006
£m

1.7
0.4
1.4

3.5

Independent Auditor’s Report to the Members of Britvic plc

We have audited the parent company ﬁnancial statements of Britvic plc for the 52 weeks ended 30 September 2007 which
comprise the Balance Sheet and the related Notes 1 to 14. These parent Company Financial Statements have been prepared
under the accounting policies set out therein. We have also audited the information in the Directors’ Remuneration Report that
is described as having been audited.

We have reported separately on the Group Financial Statements of Britvic plc for the 52 weeks ended 30 September 2007.

Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the Annual Report, the Directors’ Remuneration Report and the parent Company
Financial Statements in accordance with applicable United Kingdom law and Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) are set out in the Statement of Directors’ Responsibilities.

Our responsibility is to audit the parent company ﬁnancial statements and the part of the Directors’ Remuneration Report to be
audited in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the parent Company Financial Statements give a true and fair view and whether
the parent company ﬁnancial statements and the part of the Directors’ Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in
the parent company Directors’ Report is consistent with the ﬁnancial statements. The information given in the Directors’ Report
includes that speciﬁc information presented in the Operating and Financial Review that is cross referred from the Business
Review section of the Directors’ Report.

In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received
all the information and explanations we require for our audit, or if information speciﬁed by law regarding Directors’ remuneration
and other transactions is not disclosed.

We read other information contained in the Annual Report and consider whether it is consistent with the audited parent Company
Financial Statements. The other information comprises only the Chairman’s Statement, the Operating and Financial Review, the
Corporate Responsibility Review, the Directors’ Report, the Corporate Governance Statement and the unaudited part of the
Directors’ Remuneration Report. We consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the parent Company Financial Statements. Our responsibilities do not extend to any other information.

Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (‘UK and Ireland’) issued by the Auditing Practices
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the parent company
ﬁnancial statements and the part of the Directors’ Remuneration Report to be audited. It also includes an assessment of the
signiﬁcant estimates and judgments made by the Directors in the preparation of the parent Company Financial Statements, and
of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufﬁcient evidence to give reasonable assurance that the parent Company Financial Statements and the part
of the Directors’ Remuneration Report to be audited are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the parent
Company Financial Statements and the part of the Directors’ Remuneration Report to be audited.

Opinion
In our opinion:
• The parent Company Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted

Accounting Practice, of the state of the Company’s affairs as at 30 September 2007.

• The parent Company Financial Statements and the part of the Directors’ Remuneration Report to be audited have been

properly prepared in accordance with the Companies Act 1985.

• The information given in the Directors’ Report is consistent with the parent Company Financial Statements.

Ernst & Young LLP
Registered auditor
Nottingham
28 November 2007

Note: The maintenance and integrity of the Britvic plc website is the responsibility of the Directors; the work carried out by the Auditors does not involve consideration
of these matters and, accordingly, the Auditors accept no responsibility for any changes that may have occurred to the ﬁnancial statements since they were
initially presented on the website.

Britvic plc Annual Report 2007

Company Balance Sheet
At 30 September 2007

Fixed assets
Investments in Group undertakings
Current assets
Trade and other receivables
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Other ﬁnancial liabilities

Net current assets/(liabilities)

Total assets less current liabilities

Non-current liabilities
Interest bearing loans and borrowings

Net assets

Capital and reserves
Called up share capital
Share premium reserve
Own shares
Hedging reserve
Proﬁt and loss account

Equity shareholders’ funds

Notes

8
9
9

10
11
11
11
11

2007
£m

599.0

118.1

(23.0)
(14.0)
(3.4)

(40.4)

77.7

676.7

(393.9)

282.8

43.2
2.5
(10.3)
3.0
244.4

282.8

2006
£m

429.6

1.5

(105.3)
(2.4)
–

(107.7)

(106.2)

323.4

–

323.4

43.2
2.5
(0.5)
–
278.2

323.4

The ﬁnancial statements were approved by the Board of Directors and authorised for issue on 28 November 2007.
They were signed on its behalf by:

Paul Moody
Chief Executive

John Gibney
Finance Director

Britvic plc Annual Report 2007

Notes to the Company Financial Statements

1. Parent undertaking
The ﬁnancial statements are prepared in accordance with the Companies Act 1985 and in accordance with applicable
accounting standards.

These accounts present information about the Company as an individual undertaking, under UK Generally Accepted Accounting
Principles, and not about its Group.

The Company has taken advantage of the exemption provided under section 230 of the Companies Act 1985 not to publish
its individual proﬁt and loss account and related notes.

The Company is exempt from the requirements of Financial Reporting Standard No.1 (Revised) ‘Cash Flow Statements’.

2. Accounting policies

Investments
The Company recognises its investments in subsidiaries at cost less any provisions made for impairment.

Interest bearing loans and borrowings
Borrowings are stated at proceeds received less any unamortised issue costs.

Issue costs of loans
The ﬁnance cost recognised in the proﬁt and loss account in respect of capital instruments is allocated to periods over the terms
of the instrument using the effective interest method.

Borrowing costs
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
interest method.

All borrowing costs are recognised as ﬁnance costs in the proﬁt and loss account in the period in which they are incurred.

Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are
taken to the proﬁt and loss account.

Issued share capital
Ordinary shares are classiﬁed as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from
the proceeds.

Dividends
Dividend income is recognised when the Company’s right to receive payment is established.

Final dividends are recorded in the ﬁnancial statements in the period in which they are approved by the Company’s shareholders.
Interim dividends are recorded in the period in which they are approved and paid.

Britvic plc Annual Report 2007

Notes to the Company Financial Statements continued

2. Accounting policies continued

Derivative ﬁnancial instruments and hedging
The Company uses interest rate swaps to hedge its risks associated with foreign currency and interest rate ﬂuctuations classiﬁed
as cash ﬂow hedges (when hedging exposure to variability in cash ﬂows that is either attributable to a particular risk associated
with a recognised asset or liability or a highly probable forecast transaction). All derivative ﬁnancial instruments are initially
recognised and subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and
as liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge accounting are taken to the
proﬁt and loss account. The treatment of gains and losses arising from revaluing interest rate swaps designated as cash ﬂow
hedging instruments is as follows:

For cash ﬂow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in equity, while
the ineffective portion is recognised in the proﬁt and loss account. Amounts taken to equity are transferred to the proﬁt and loss
account when the hedged transaction affects proﬁt or loss, such as when a forecast sale or purchase occurs. Where the hedged
item is the cost of a non-ﬁnancial asset or liability, the amounts taken to equity are transferred to the initial carrying amount of the
non-ﬁnancial asset or liability.

If a forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to the proﬁt
and loss account. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its
designation as a hedge is revoked, amounts previously recognised in equity remain in equity until the forecast transaction occurs
and are transferred to the proﬁt and loss account or to the initial carrying amount of a non-ﬁnancial asset or liability as above.
If the related transaction is not expected to occur, the amount is taken to the proﬁt and loss account.

3. Auditors’ remuneration
Auditors’ remuneration has been borne by another Group undertaking.

4. Loss of the company
The Company made a loss of £11.6m in the year (2006: loss of £3.5m).

5. Director’s remuneration
The remuneration of the Directors of the Company is borne by another Group company.

Directors’ emoluments are disclosed in the Directors’ Remuneration Report.

Britvic plc Annual Report 2007

6. Investments in Group undertakings

Cost and net book value at 2 October 2006
Acquisition of Britannia Soft Drinks Limited

Cost and net book value at 30 September 2007

2007
£m

429.6
169.4

599.0

2006
£m

–
429.6

429.6

On 18 November 2005 the Company acquired the entire share capital of Britannia Soft Drinks Limited.

On 24 August 2007 the Company acquired 169,472,800 shares of £1 each being a 100% shareholding in Britvic Finance Limited
for £169,472,800.

On 24 August 2007 the Company exchanged its investment in Britvic Finance Limited for an additional investment in Britannia
Soft Drinks Limited on their issue of a further 169,472,800 shares of £1 each.

The following is a list of the principal subsidiary undertakings of which Britvic plc is, either directly or through subsidiary
companies, the beneﬁcial owner of the whole of the equity share capital.

Name

Directly held
Britannia Soft Drinks Limited
Indirectly held
Britvic Finance Limited
Britvic Holdings Limited
Britvic International Limited
Britvic Soft Drinks Limited
Robinsons Soft Drinks Limited
Orchid Drinks Limited
Red Devil Energy Drinks Limited
Robinsons (Finance) Limited

C&C (Ireland) Limited

C&C (Belfast) Limited

C&C (Wholesale) Limited

C&C (Logistics) Limited

Ballygowan Limited

Aquaporte Limited

William J Dwan & Sons Limited

Name changes
effective from
1 October 2007

Principal activity

Country of
incorporation

% equity
interest

–

Investment holding company

–
–
–
–
–
–
–
Britvic Irish
Holdings Limited
Britvic Ireland Limited

Britvic Northern
Ireland Limited
Britvic Licensed
Wholesale Limited
Britvic Logistics Limited

–

Financing company
Holding company
Manufacture and sale of soft drinks
Manufacture and sale of soft drinks
Manufacture and sale of soft drinks
Manufacture and sale of soft drinks
Manufacture and sale of soft drinks
Investment holding company

Manufacture and marketing
of soft drinks
Marketing and distribution
of soft drinks
Wholesale of soft drinks
to the licensed trade
Provision of distribution services

Manufacture and marketing
of soft drinks
Supply of water-coolers
and bottled water
Wholesale of soft drinks
to the licensed trade

Jersey
UK
UK
UK
UK
UK
UK
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland

100

100
100
100
100
100
100
100
100

100

Britvic plc Annual Report 2007

Notes to the Company Financial Statements continued

7. Trade and other receivables

Amounts due from subsidiary undertakings
UK corporation tax receivable

8. Trade and other payables

Amounts due to subsidiary undertakings
Accruals and deferred income

9. Interest bearing loans and borrowings

Current
Bank overdrafts

Non-current
Unsecured bank loans
Private placement notes
Less unamortised issue costs

Total

2007
£m

111.6
6.5

118.1

2007
£m

(22.9)
(0.1)

(23.0)

2006
£m

–
1.5

1.5

2006
£m

(105.3)
–

(105.3)

2007
£m

2006
£m

(14.0)

(2.4)

(171.1)
(223.6)
0.8

(393.9)

–
–
–

–

As a result of applying hedge accounting, the translation gain shown above of £6.4m has been offset by an equivalent change
in the fair value of the swap arrangements.

Private placement notes
On 20 February 2007, Britvic plc issued US$375m and £38m of Senior Notes (‘the Notes’) in the United States Private
Placement market.

In order to manage the risk of foreign currency and interest rate ﬂuctuations, the Company has entered into currency
swaps whereby ﬁxed/ﬂoating US dollar interest is swapped for ﬁxed sterling interest. The fair value of these swaps as
at 30 September 2007 is £3.4m.

For further details, refer to Notes 24 and 27 to the Consolidated Financial Statements.

Unsecured bank loans
On 28 August 2007 Britvic plc entered into a €100m loan agreement. The remaining unsecured bank loans are sterling
denominated. These loans attract a ﬂoating rate of interest and are regularly re-priced with a current average interest rate of
6.52% on the sterling loans and 4.77% on the euro loans. This interest rate expires on 4 December 2007 when it is anticipated
they will be re-priced.

Britvic plc Annual Report 2007

10. Issued share capital
The issued share capital as at 30 September 2007 and 1 October 2006 comprised 216,037,795 ordinary shares of £0.20 each,
totalling £43,207,559.

The ordinary shares carry voting rights of one vote per share. There are no restrictions placed on the distribution of dividends,
or the return of capital on a winding up or otherwise.

Authorised
327,500,000 ordinary shares of £0.20 each
Issued and fully paid
216,037,795 ordinary shares of £0.20 each

11. Reconciliation of movement in shareholders’ funds

Called up
share
capital
£m

Share
premium
reserve
£m

Own
shares
£m

Hedging
reserve
£m

At 2 October 2006
Own shares purchased for share schemes
Own shares issued for share schemes
Movement in cash ﬂow hedges
Loss for the year
Payment of dividends

At 30 September 2007

43.2
–
–
–
–
–

43.2

2.5
–
–
–
–
–

2.5

(0.5)
(13.2)
3.4
–
–
–

(10.3)

–
–
–
3.0
–
–

3.0

12. Dividends paid and proposed

Declared and paid during the year
Special dividend for 2006: 45.86p per share
Interim dividend for 2006: 3.00p per share
Final dividend for 2006: 7.00p per share
Interim dividend for 2007: 3.30p per share

Dividends paid

Proposed for approval by the shareholders at the AGM
Final dividend for 2006: 7.00p per share
Final dividend for 2007: 7.70p per share

2007
£m

65.5

43.2

Proﬁt
and loss
account
£m

278.2
–
–
–
(11.6)
(22.2)

244.4

2007
£m

–
–
(15.1)
(7.1)

(22.2)

–
16.6

2006
£m

65.5

43.2

Total
£m

323.4
(13.2)
3.4
3.0
(11.6)
(22.2)

282.8

2006
£m

(98.5)
(6.5)
–
–

(105.0)

(15.1)
–

13. Contingent liabilities
The Company is co-guarantor of the Group’s bank loan and overdraft facilities.

14. Related party transactions
The Company has taken advantage of the exemption under FRS 8 available to a parent company not to disclose transactions
with other Group companies within its ﬁnancial statements.

Britvic plc Annual Report 2007

Shareholder Information

Shareholder proﬁle as at 30 September 2007

Category of holdings

Private Individuals
Nominee Companies
Limited and Public Limited Companies
Other Corporate Bodies
Pension Funds, Insurance Companies and Banks

Total

Range of holdings

1 – 199
200 – 499
500 – 999
1000 – 4999
5000 – 9999
10000 – 49999
50000 – 99999
100000 – 499999
500000 – 999999
1000000 Plus

Total

Number Percentage
of total
shareholders shareholders

Ordinary
Percentage
of issued
shares
(million) share capital

856
578
25
10
4

58.11
1,885,226
39.24 194,503,351
13,129,503
5,995,108
524,607

1.70
0.68
0.27

1,473

100 216,037,795

0.87
90.03
6.08
2.78
0.24

100

Number
of

Percentage
of total
shareholders shareholders

Percentage
Ordinary
of issued
shares
(million) share capital

84
143
223
595
105
128
43
86
27
39

6,404
5.70
46,304
9.72
152,261
15.14
1,233,628
40.38
712,651
7.13
2,872,957
8.69
3,098,777
2.92
21,417,744
5.84
1.83
17,565,083
2.65 168,931,986

1,473

100 216,037,795

0.00
0.02
0.07
0.57
0.33
1.33
1.43
9.91
8.13
78.21

100

Dividend mandates
Shareholders who wish dividends to be paid directly into a bank or building society account should contact the Registrar for
a dividend mandate form. This method of payment removes the risk of delay or loss of dividend cheques in the post and
ensures that your account is credited on the due date.

Share dealing services
The Company’s Registrar, Equiniti, offer a telephone and internet dealing service, Shareview, which provides a simple and
convenient way of buying and selling shares. For telephone dealings call 0870 850 0852 between 8.30am and 4.30pm,
Monday to Friday, and for internet dealings log onto www.shareview.co.uk/dealing

Individual savings accounts (‘ISAs’)
ISAs in Britvic plc ordinary shares are available through Equiniti. Further information may be obtained through their ISA Helpline,
telephone 0870 24 24 244.

Financial calendar
Ex-dividend date
Record date
Annual General Meeting

5 December 2007
7 December 2007
30 January 2008

Payment of ﬁnal dividend
Interim results announcement

15 February 2008
May 2008

Contacts
The Company Secretary is John Price and the registered ofﬁce is Britvic House, Broomﬁeld Road, Chelmsford CM1 1TU,
telephone 01245 504482, fax 01245 504435, website www.britvic.com

The Company’s Registrar is Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, telephone 0870 195 6550*
(UK callers +44 121 415 7047 (non- UK callers).

*For those with hearing difﬁculties, a textphone is available on 0870 600 3950 for UK callers with compatible equipment.

Further copies of this report are available from the Company’s registered ofﬁce (address as above) and may be accessed through
the Company’s website, www.britvic.com

Britvic plc Annual Report 2007

*Note regarding all numbers in this announcement other than those

included within the Financial Statements:
All numbers are disclosed before exceptional items and other than free cash ﬂow
and ROIC include a ﬁve-week contribution from the recently acquired soft drinks
and distribution businesses of C&C Group plc (‘Britvic Ireland’) which contributed
revenue of £13.8m and operating proﬁt of £0.8m. All numbers exclude the Private
Label Water business where the last contract expired in November 2005.

1 EBITDA is deﬁned as operating proﬁt before exceptional items, depreciation,

amortisation and any gain or loss on disposal of ﬁxed assets.

2 Free cash ﬂow is deﬁned as net cash ﬂow excluding movements in borrowings,
dividend payments and non cash exceptional items. Including the impact of the
Britvic Ireland acquisition free cash ﬂow is an outﬂow of £92.6m.

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
which may cause the actual results, performance or achievements of the Company
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.

Printed on Take 2 Offset which is made from 100%
recycled ﬁbres sourced only from post consumer waste.
Take 2 Offset is certiﬁed according to the rules for the
Forest Stewardship Council.

Britvic plc
Britvic House
Broomﬁeld Road
Chelmsford
Essex
CM1 1TU

Telephone 01245 261871
Fax 01245 267147

www.britvic.com

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