Simon Litherland - Chief Executive Officer Mathew Dunn - Chief Financial Officer

Edward Mundy - Jefferies LLC Andrea Pistacchi - Deutsche Bank AG Laurence Whyatt - Societe Generale Andrew Holland - Societe Generale Richard Felton - Morgan Stanley Damian McNeela - Numis Securities Limited Simon Hales - Citigroup Ned Hammond - Berenberg Chris Pitcher - Redburn Limited Komal Dhillon - JPMorgan

Good morning, everybody. Thanks very much for coming to join us today. This morning, I’m going to talk about the progress we’ve made on our strategic priorities in the first-half. Mat will then come up and update on our financial performance, and then we will, of course, both be happy to take questions from the floor. Before we do that, let me just take a minute to remind you of our strategy, which has delivered excellent returns since we launched it four years ago. We’ve made solid progress against each area of the strategy that you can see on the slide, and we’re confident that continued focus on these will deliver strong returns for our shareholders in the future. So let me update you on the highlights in the first-half. We’ve made strong progress in the first-half, demonstrating once again the resilience of our business and our ability to deliver in the short-term, while continuing to invest in long-term growth. We delivered strong revenue, margin and profit growth in the first-half with a particularly good performance in Q2, despite poor weather and having to absorb some customer bad debt. I’m pleased to say that Robinsons return to volume and revenue growth in the first-half – good morning – following the introduction of the more premium variance and Pepsi MAX has continued to significantly outperform in the competitive cola category as we see the shift to low and no-sugar brands continue. Across the group, we’ve delivered excellent customer and consumer activation, which have underpinned our strong performance. The business capability program is now in its final phase and is already benefiting the business, as I’ll explain in more detail in a few minutes. While it’s too early to call the consumer response to the soft drinks levy in the UK and Ireland, the competitor and retailer actions are broadly as we anticipated. So let me now explore some of these highlights in more detail. At the preliminary results presentation last November, we highlighted the research of Robinsons into good, better and best tiering. Across the second quarter, we have been rolling out the new Creations and Cordials ranges into Grocery, and I’m delighted that Robinsons is back into revenue growth. In retailers, where we introduced the new ranges first, we are seeing Robinsons increase value, gain share and drive category growth. The early signs are very encouraging and I’m confident that will further benefit in the second-half of the year on the back of our strong brand activation plans. We have developed a new advertising campaign, which you may have seen, but let me show you one of the executions now. [Commercials] So along the improved Dolly’s performance, I’m delighted by the performance of Robinsons Refresh’d, which was the number one soft drinks innovation in 2017, based on Nielsen data. As well as extending the brand into new occasions, it’s margin accretive to the Robinsons range. I’m particularly pleased with the performance of our carbonates portfolio, enhancing our position of strength in low and no-sugar, as the soft drinks levy is implemented. It’s worth noting that our H1 numbers only include one week of data post levy. Our Q2 performance was exceptional with revenue up nearly 13% last year. While the equivalent comparative period was relatively soft, this is nevertheless a standout performance. Pepsi led by the no-sugar MAX variant has continued to gain share this year, adding more value to the category than any other cola variant generating an incremental £27 million of retail sales value in the take-home channel. The MAX proposition and taste continue to resonate with consumers and to translate into this category-leading performance. 7UP and Tango have also grown this year with 7UP growth led by no-sugar 7UP Free and Tango through its range of flavors, all of which sit below the soft drinks levy. And finally, our natural energy proposition Purdey’s has also driven growth with the recently introduced can format, enabling a step change in distribution. At the time of our France acquisition in 2010, branded sales accounted for 50% of revenue and private label the other 50%. Today, our portfolio of great brands accounts for over 60% of revenue. Now, while the first-half performance has been relatively weak, Q2 has improved. As well as expanding Teisseire into new pack formats and consumption occasions, we have continued to build the premium Moulin de Valdonne syrups brand from its heartland in the south. And more recently, Pressade has been an outstanding success story, driving strong double-digit revenue and profit growth, as well as gaining share. With the commercial plans we have in place, I’m confident of an improved second-half. In Ireland, we’ve delivered growth both in our own brand business and in the Counterpoint wholesale arm. There’s a couple of chairs over here, if you can see. Our market-leading own brand portfolio of low and no-sugar offering includes Ballygowan, the number one water brand, MiWadi and Club Zero and Pepsi MAX. In Counterpoint, the acquisition last year of East Coast has also significantly improved our presence in the growing Dublin on-trade, which sets us out for better access to foster growth in the premium segment. In our Brazilian business, we’ve continued to focus on protecting the profitability of the business in the near-term and have successfully grown brand contribution. We’re well placed to succeed when the market recovery comes through. The acquisition of Bela Ischia has expanded our brand portfolio and geographical reach and the synergy delivery is ahead of our original guidance. While the conditions have remained challenging, we have continued to stimulate demand through innovation. We continue to roll out Maguary Fruit Shoot across the country and we’ve recently launched the new range of affordable, easier-to-mix concentrates called Maguary Uno, which we think will bring new consumers to the concentrates category. In the USA, Fruit Shoot has continued to make further progress. Our focus has continued to be on improving our range and shelf space across the customer base. In the second year of multi-pack customer range reviews, we have gained distribution on space and started to seed our hydro flavored water variant. Although the timing of these changes have had little impact in the first-half. Singles sales have been driven by the listing in 8,500 Dollar General stores. In the Benelux markets, the retailer environment has been challenging. We’ve used our direct business model to focus on growing our margin and building our portfolio. In travel and export, we focused on expanding a profitable footprint by exiting unprofitable contracts and winning new listings for premium brands, such as Purdey’s and J2O, thereby overcoming the loss of Monarch Airlines following its administration. We’ve continued to deliver our commercial priorities, while maintaining our commitment to building trust and respect in our communities. We deliver those through our sustainable business program called A Healthier Everyday. This was formed of three parts. Firstly, healthier people. Our long-term strategy of helping consumers make healthier choices has positioned us well. At the half-year, the trend towards low-sugar soft drinks has continued with a decrease in average calories per serve across the group. Secondly, healthier communities. We help communities thrive through being a good employer and contributing to the local areas in which we operate. This year, our Great Place to Work Trust Index, increased again and our GB, Ireland and France business units all jumped up their rankings, with GB being ranked the number one soft drinks business to work for in the UK in 2018. And thirdly, our work on creating a healthier planet focuses on minimizing our impact on the environment by reducing our carbon emissions, water usage, landfill and waste, including packaging. We recently signed up the UK Plastics Pact initiative, which seeks to take steps to create a circular economy in plastics. It is a collaboration of industry, governments and NGOs that have set targets to reduce, recycle and eliminate problematic or unnecessary packaging by 2025. Already, all our PET bottles are recyclable and our investments in the supply chain is enabling us to use less plastic through light-weighting. We continue to engage constructively with government and wider stakeholders on this important agenda. Our business capability program continues to progress well. We are now in the final phase. We expect all new lines and warehousing to be operational by the end of 2019. The Norwich site is expected to close in late 2019, and I would like to pay tribute to our employees at the site to continue to work with truly admiral dedication – admirable dedication. Following the closure, Britvic will operate a three-site production network down the spine of the country with cost benefits fully realized from 2020. We have achieved a huge amount. We’ve installed six new lines, as well as expanded on-site warehousing to enable us to be more efficient and travel fewer road miles. Our Leeds in London sites are now operating in business as usual. However, there’s more to come at our Rugby site, where in the next 12 to 18 months, we’ll install a new PET lines and a new aseptic line and a new high-bay warehouse and process room. In addition, to further reduce our impact on the environment, we’re installing a combined heat and power plant. As well as the cost-saving guidance of the minimum 15% EBITDA return, we’re already seeing commercial benefits from the program through increased capacity, pack flexibility and expanded liquid capability. Our increased capacity has already enabled strong growth in cans and 1.5-liter PET volumes that we would previously have been unable to fulfill. With regards to pack flexibility, we are seeing some early examples, where our ability to manufacture new PET sizes has opened up additional distribution in growth channels. Examples include the 3-liter value packs of carbonates and Robinsons, which access the discounted channel, as well as the 250 ml slim line Purdey’s and J2O cans, which we can now manufacture in-house and target full quotes and other convenience channels. We’ve also expanded our liquid capability. Recent innovations, for examples, Robinsons Refresh’d and Aqua Libra are all natural and preservative-free and will in time be – we will be able to bring the production of those in-house to realize further cost benefits. We remain very confident that the program will continue to enhance our position in the market. Britvic entered the soft drinks levy from a position of confidence. Thanks to the strength and breadth of our portfolio and our long-term reformulation and innovation program to build a better-for-you product range. As I mentioned earlier, there’s only one week’s worth of trading in our GB numbers following the introduction of the levy on the 6th of April. And in Ireland, the the levy was only introduced in the 1st of May. So there’s no impact in the first-half numbers of the levy there. We do, however, have increased visibility of some of the factors, which were unclear when we presented to you in November, when we spoke then of three main levers of uncertainty based on the response of customers, competitors and consumers. Two of these are now much clearer with only the consumer response remaining to be fully understood. Firstly, we have worked closely with our customers on their response to the levy. I’m pleased to say that the soft drinks shelf space in feature and display, which is so important to the category have been maintained, and there is an increased focus on low and no-sugar brands, which plays to Britvic’s advantage no-sugar position. In terms of pricing, it appears that retailers are indeed choosing to pass the levy on to consumers on full-sugar products. In terms of our approach, we’ve been completely transparent in pricing and added the levy on top for full-sugar products. Our new pricing is already showing up in markets and we have strong customer plans in place for the second-half. And secondly, from a competitor’s perspective, there has been a lot of reformulation more recently and PET changes, but nothing that they have done has been hugely different to what we anticipated. The key remaining area of uncertainty is, therefore, the consumer response to the different offer and price points that they now face in store. We only have a few weeks of data available, which have included multiple other factors, such as Easter falling into a different week last year and some rather unseasonable hot and cold weather. So it’s a bit early to try and draw any concrete conclusions about their response at this time. We’ll obviously learn more in the coming months, but at this stage, we remain confident that we’re well placed to navigate the levy. I’m really pleased with our first-half delivery and we’re now all focused on achieving a great outcome in the second-half of the year when we deliver the majority of our profit. Across each of our markets, we have an exciting activation plan in place for all our brands. On this slide, they’re just a few examples of the campaigns we’ve lined up. Importantly, these are underpinned by excellent in-store activation plans that we’ve agreed with our customers. In GB, we’ll be leveraging the iconic association of Robinsons with Wimbledon again this summer with the opportunity to win tickets to this year’s championship. Pepsi will once again deliver a football theme campaign in association with some of the world’s best players during a great summer of football. And we’ll also we’ll be activating a brand-new campaign for J2O encouraging you to Find your Mojo. The comprehensive campaign will focus on J2O as a drink for every socializing occasion and is supported by increased in-store activation. Our cheeky, colorful alpaca Mojo was unleashed on the British public on Monday, and you guys can meet him here today. If you can play the clip. [Commercials] That’s Mojo. In France, the Pressade and Teisseire are once again the official soft drinks of the Tour de France, an association that puts our brands in front of millions of consumers, and we’ve also partnered with a basketball player, Tony Parker, a huge figure in France, to be the face of Fruit Shoot, as well as encourage kids to get active. Again, these are being activated in-store, as well as through advertising and sponsorship. These are just a snapshot of our upcoming activity, but I’m really excited by our half two plans in each of our markets. So let me now hand you over to Mat to take you through our financials.

Thanks, Simon, and good morning, everyone. As Simon has just demonstrated, we have made good progress on our strategic priorities and this has translated into strong financial performance. We have delivered good revenue margin and earnings growth. This has been underpinned by particularly strong performance in GB carbonates, Ireland and Brazil, as well as a turnaround in Robinsons. We’ve also continued to focus on our cost control and margin management. Our organic revenue increased 2.8%, translating into 6% adjusted EBIT growth and a robust 40 basis points improvement in adjusted EBIT margin. Earnings per share has further benefited from favorable exchange rate movements, good contributions from our non-organic businesses, a broadly flat interest charge and favorability from a tax perspective, resulting in adjusted earnings per share growth of 12.2%. With that dividend policy unchanged, the Board has declared an interim dividend of 7.9p, an increase of 9.7% on the prior year. Historically, we have paid approximately 30% of the full-year dividend in the first-half. The half year is a working capital half for Britvic as we build stocks for the key summer trading period. At the half year, we have reported adjusted net debt to EBITDA of 2.5 times, marginally up from the same time last year, despite the final payment associated with our ebba transaction. Our business remains a strongly cash generative one and we remain firmly on track for the year-end debt leverage to be within our stated guidance of 2.1 times to 2.3 times. To put these results into context, it is worth noting the market performance in the main geographies in which we operate. As you’ll note from the slide, in our core European markets, value is now growing ahead of volume, a trend we have now seen for close to 18 months. In GB, market value increased by 2% in the first-half. And as you can see from the slide, this was despite a poor Q2 when the weather hit the country hard. Against this backdrop, our Q2 was extremely pleasing. In Ireland, the market has continued to grow with value as measured by Nielsen increasing 6% in the first-half of the year. In France, the market remained relatively weak across the first-half of the year with poor weather exacerbating this in the second quarter, in particular. Over in Brazil, market conditions have remained challenging with the concentrates category down nearly 8%. Consumer disposable income remains under pressure with our unemployment remaining stubbornly high. There’s no doubt, the long-term economic outlook is improving, short-term uncertainties likely to remain heading into the presidential election later this year. Turning now to the business units and GB first. Whilst the second quarter lapped a soft year-on-year comparative, carbonates performance has nonetheless been extremely strong, setting us up well heading into the soft drinks levy. Performance did benefit from a modest amount of retailer stock-building ahead of the levy’s implementation. Pepsi led by no-sugar MAX was the main driver of growth and increased its market volume and value share in a competitive cola category. The Britvic-owned brands Tango’s and – Tango and Purdey’s were also in growth. The BCP investment has increased capacity, enabling both volume growth and positive margin realization. Both ARP and margin benefited from positive price/mix, in part due to the implementation of new promotional price points in the off-trade, as well as the growth of higher margin Britvic-owned brands. This is translated into strong brand contribution and margin growth. GB stills revenue declined in the first-half, although the rate of decline slowed to 2.3% in the second quarter, principally driven by the launch of the new Robinsons ranges, which was supported by a comprehensive marketing campaign, has resulted in brand volume, ARP and revenue growth. The decline in J2O and Fruit Shoot were adverse for price/mix and margin. Brand contribution and margin were further impacted by underlying cost of inflation. The first-half of the year was also impacted by low levels of feature and display as we transition the Robinsons brand into the new range. We would expect this to improve in the second-half of the year, reflecting the stronger marketing plans we have, both on Robinsons and the broadest stores portfolio. Moving over to France. The half year revenue decline was predominantly driven by soft first quarter, where revenue was down 5%. Performance in the second quarter improved with revenue only marginally decreasing. The decline was primary in private label and juice and syrup, where ARP margins are significantly lower than branded sales. Within the branded portfolio, syrups declined, reflecting a fall in consumption after the poor summer and continued adverse weather conditions in the second quarter of the year. Our juice brand Pressade continues to grow strongly following the expansion of the range last year. We’ve also successfully concluded our planned revenue management activities for the year. And as we head into the second-half of the year, have strong commercial plans in place with retailers for the important summer period. In Ireland, revenue increased by 13.1%, in part due to the growth in the Counterpoint wholesale business, which acquired East Coast last year. The one-off incremental benefit from the take on of the East Coast outlets has now been fully realized. The acquisition is diluted to margin as the sale of wholesale third-party brand – brands generates a lot of distributed type margin. Across the portfolio, we have delivered revenue and share growth. Our low and no-sugar brands, including MiWadi, Pepsi MAX and Ballygowan have continued to drive this growth. We’ve been able to move our promotional price points successfully in the market. We should set us up well to realize value in the balance of the year. Single-serve packs continue to be in growth benefiting both ARP and margin. As Simon has already mentioned, the Sugar Sweetened Drinks Tax, due to be introduced on April 6, was delayed until May 1 and so falls outside the period being reported. But whilst it has been delayed, there has been some retailer stock-building ahead of the original planned implementation date. In Brazil, organic volume declined 6.1%, resulting in revenue down 5.8% on last year. Despite the decline in organic revenue, organic brand contribution and margin increased 19.6% and 480 basis points, respectively. This was due to a combination of factors, including lower raw material costs, phasing of A&P spend and synergies from the Bela Ischia acquisition some of which are being realized in the core Ebba business. In the international business unit, volume and revenue declined. In the USA, reported revenue declined, which reflects the timing of concentrate shipments for Fruit Shoot singles and retailer orders for the multi-pack format. While in Benelux, we have continued to focus on improving underlying profitability, which has resulted in live promotional sales, particularly in the Netherlands. In the travel and export channel, we have observed the administration of Monarch Airlines and we have exited unprofitable travel contracts. This impact was partially offset by recent listing for brands, including Purdey’s and J2O. Brand contribution declined 14.9% and margin declined to 180 basis points, largely reflecting the adverse impact of the mix of business within the international division. This year, we have made some changes to our commercial investment profile to support our execution in market. We have upweighted our investment in our outlet execution, which targets key growth channels. We have also rephased A&P spend into the third quarter to support increased marketing activity following the Soft Drinks Levy Implementation. This means that in the first-half, A&P spend declined by £1.7 million, or £1.5 million on a constant currency basis. Branded spend also decreased, in part due to the phasing of spend in France and Brazil, as well as the continued leveraging of efficiencies across the group. Fixed supply chain costs have increased, largely due to depreciation from our GB investment program, additional co-packing costs related to recent innovation launches and underlying inflationary impacts. Overheads and other costs have increased by 1.5%, which includes the £3.3 million bad debt provision following the administration of Palmer & Harvey. Excluding this bad debt provision, overheads and other costs have decreased by 3.1%. Looking at cash flow and other financial items. At the half year, we have reported adjusting items of £28.3 million, with a cash impact of £11.1 million. Our guidance for the full-year remains the same and we expect to incur £35 million to £40 million of adjusting one-off costs, which includes costs related to the business capability program, including the closure of our Norwich factory, as well as acquisition-related amortization and fair value adjustments. We would expect the cash impact of these to be £20 million to £25 million, reflecting a number of non-cash elements, including the write-off of assets relating to Norwich. 2018 is the last year of elevated capital spend on the business capability program and I anticipate full-year capital spend in line with previous guidance of £145 million to £150 million. Looking ahead to next year, capital spend were dropped down much closer to historic levels. I’ve given more detailed update on this in our prelims in November. As a result, this will lead to a significant improvement in ongoing free cash flow generation from 2018. In the half, our free cash flow saw a modest increase in outflow, as we prepare for the summer period. EBITDA sort of a pleasing step-up increasing 8.5%. With our strong performance, particularly in GB in the second quarter, the increase in outflows principally driven by the timing of that working capital receipts overseas. Underpinning our balance sheet strength is a strong long-term funding platform with a £400 million revolving credit facility and long-term U.S. private placement debt in place, we’re well placed to support the delivery of our strategic goals in the years ahead. In the coming weeks, I anticipate that we will secure a new USPP debt funding at an advantageous coupon rate, which should help to further balance on maturity profile ensure that we have appropriate long-term funding available at attractive rates. Turning briefly to financial items. We remain confident that our guidance is in line with that we gave back at our prelim results. As I already mentioned, we would expect net debt EBITDA to be in the range of 2.1 to 2.3 times. Although we have seen some favorability in the first-half, we still expect our effective tax rate to be in the range of 22.5% to 23.5% and our interest charge to be marginally higher than in 2017. As I mentioned a moment ago, we expect our capital expenditure to return towards historic levels in 2019. We will still have some business capability program spend in the first quarter depending on the exact timing of our capital program completion, and therefore, we will confirm the exact detail in due course. However, as this graphic illustrates, the elevation we’ve seen in support of our BCP program – sorry, illustrates the elevation we’ve seen in support of our BCP program and gives us a sense of what historic run rate used to be. Early over time, we have invested between 3.5% and 4.5% of sales. As you can see, our return to this more normal level of capital spend after 2018 should result in a significant reduction in CapEx, and we would estimate that this should add an incremental £70 million to £80 million of free cash flow in 2019. So before I hand back to Simon to chair the Q&A, let me summarize. We have delivered a strong first-half performance with revenue-led growth underpinned by cost efficiency, driving both margin and profit growth. The first-half has also demonstrated the resilience of our business as we have overcome both poor weather and a significant customer administration in delivering our first-half performance. As a result, despite the significant severe introduction of the soft drinks levy’s in GB and Ireland and the uncertainty around how consumers will react, we approach the second-half with optimism and remain confident of making progress this year. Thanks for listening. I will now hand back to Simon to chair the Q&A.

Thanks, Mat. So for Q&A, for the benefit of the recording, if I could please ask you to state your name and your company before you ask the question. And there’s a couple of mikes, which Steve and Chris have got. So you can put up your hand, and they’ll bring your mike and fire away. Q - Edward Mundy: Excuse me, good morning. I’m Ed Mundy from Jefferies. I’ve got three questions please. The first is are you able to confide the stage what the benefits from Norwich will be? You’ve obviously given some of the exceptional costs associated through that. The second, Simon, you’ve talked a little bit about some of the PET price architecture benefits from the BCP. Over the medium-term, as you develop that further, do you think the opportunity is more for market share or ARP or a bit of both? And then the final question, as I sip here, I love the news around the potential further legislation around plastic bottles with a deposit return scheme. Are you able to quantify at this stage what proportion of your GB business is plastic and any other further comments you have in terms of how that could be mitigated?

So this is what I do the first, second and try to answer the third. So we haven’t actually broken out the benefits, specifically from Norwich. But we remain confident that the 15% EBITDA is robust and that will be fully effective from 2020, because obviously, the Norwich closure is fairly significant chunk of that total benefit. But having said that, you remember that last year, we delivered about £3 million of EBITA from the program and this year anticipate there’ll be roughly double that. But we’ll see how that flows out in the second-half. And I think the answer to your – the one about plastic, I actually don’t know the exact proportion. We can get that to you after the meeting. But yes, I’d probably estimate about a third. Obviously, you’ve got the untracked portion of the business, which is through the dispense, which is obviously very environmentally favorable, and then also the untracked and the convenience sector. All our plastic bottles are recyclable and obviously, one of the other benefits of the BCP program is that, nevertheless the lightweight plastic as well. Do you want to talk about the PET process?

Yes. So I think the answer probably is some and some. So I think there are some areas of the market or particular customers where we under-trade. And so an example of that would be the 3-liter, which allows us to trade in parts of the market we’ve historically under-indexed in. So there’ll be some share gain opportunity. But obviously, having a much broader range of options from a price PET architecture also helps us in terms of being able to set specific promotional price points or manage our – manage the range of promotions. And I think that will have – typically, that should actually realize an ARP benefit as opposed to, necessarily the share gains. So I think it’s definitely some and some.

It’s Andrea Pistacchi from Deutsche Bank. Three questions also from me, please. First on the sugar taxes – tax. It’s obviously, as you said, early to tell the consumer response. But maybe in terms of market share trends within the cola category, what have you seen since the sugar tax was implemented? Has MAX share gains accelerated? Second question on sales. So Robinsons, back into growth. J2O and Fruit Shoot are still in decline, leaving aside the easier comps in the second-half, do you feel confident that these sort of underlying performance of these brands improves and what drives that? And third question on working capital. I appreciate the phasing of the working capital, but the working capital cash absorption seem to be a bit more significant than we would have expected in H1. What drove that? And should it normalize?

You’ll do one and three.

Yes, yes. I’ll do one and three. So in – I mean, in terms of the soft drinks levy, even talking about share, given, week-on-week, it can be driven by retailer promotions, et cetera, is probably too early to comment. And I guess, the only comment we could make is that, we are definitely seeing a continuation of the consumer trend of people switching out full sugar into low and no-sugar, but the extent of that, the proportion of that, et cetera, is what we’ll have to see. So it’s just too early to give any firm sense of what’s happening. From a working capital perspective, the big part of working capital stepped up is debtors. I mean, it’s purely our debtor terms are unchanged. So it reflects the strong double-digit growth that we’ve seen in carbonates in GB in the back-end of the second quarter relative to a weaker soft comp has driven the fact that we’ve got higher outstanding debt due from our big grocery customers at the end of quarter two than we had last year. So there’s nothing fundamentally changed in our working capital. It’s purely driven by the timing of receipts and when we’ve executed our plans in-trade.

Okay, and I’ll pick up your stills question. So yes, I mean, I guess, we are confident that we’ll continue to see an improving trend in the second-half on our stills brands. Robinsons has got further to go. Some of the benefit of Creations and Cordials and Refresh’d, we’ve gained more distribution, which will come through in the second-half. And on J2O, we’ve got new packaging and some new PET price architecture, which has been very successful in Tescos over the Christmas period. But in addition to that, we’ve got a new marketing campaign, which you’ve seen the flavor of. We are increasing distribution on J2O Spritz, particularly in the on-trade, but also in the at-home market, and we’ve got great feature and display for summer. So I’m confident we’ll start to see an improving trend in the second-half in J2O. And then our Fruit Shoot, likewise, we’ve got a new marketing campaign, It’s My Thing, we’re on air at the moment. And we’ve also relaunched our core range with a slightly translucent bottle, which moms prefer, because they can see through the color and see the liquid. We’ve also got more focus on J2O, Hydro and Hydro Sparkling, which are our flavored water brands, and those are in double-digit growth and have got further growth ahead. And then finally, we’ve just launched a brand called Fruit Shoot Juiced, which is a 50% juice, 50% water, schools-compliant offer, slightly premium. It’ll effectively replace My-5. That is a better liquid and bang on target for more concerned moms.

It’s Laurence Whyatt from Societe Generale. Again, on the sugar tax, could you give us an update on what percent of your portfolio is now affected by the sugar tax, both your own brands and the Pepsi brands? And then secondly, on the sugar tax, you mentioned what you’re seeing in the market is exactly as you anticipated. Could you let us know what you anticipated? And we’ve noticed on shelves, Pepsi and Pepsi MAX, are the same size, both [indiscernible] yet the price is very different, which is different to what Coke is doing at the 2 liter on £1.75. It’s all very small sample represents the whole UK or you’re doing different things in different places. On Brazil, you have lot of your competition in beverages and consumer pointing to an inflection in the Brazilian market and trying to cool that. You haven’t made any of those sort of noises. What’s your view of the consumer confidence in Brazil at the moment? And then finally, could you give us an update on the London Essence brand, you haven’t mentioned it yet today, just wondering if there’s any point you can make there?

Okay. I’ll do the first two and you can go to Brazil and then I’ll talk about London Essence. So sugar tax, our own brands are 94% below the sugar tax and the Pepsi brands are 72% below the sugar tax. That’s Pepsi full sugar and 7UP full sugar are the primary taxable brands. And the question of, what do we anticipate? So, I think you’ve really answered your own question. Our strategy was to price up, so put the tax on top of the price. We thought that was the most transparent strategy, it’s what the government intended and encourages consumers to switch from full to, to low and no-sugar. And that’s where we think we’re advantaged. So that has been our strategy. I think, in particular, the key competitive strategy is well where they seem to be focused much more on different PET price architectures and meeting maybe the same price points. Our strategy is consistent around the geography. And clearly, we passed on the tax in other channels as well outside of the at-home channel. And you’re going to do Brazil, then I’ll come back to.

Yes. So I think, I mean, I think in Brazil, we’ve seen an improvement in the macro economic environment. But I think we haven’t seen the trickle down of that yet to the consumer disposable categories. And I think, whilst it’s hard to know exactly what’s driving that, it’s a place to be the consumer sentiment remains relatively fragile, partly because unemployment is still not ticking down, which will be – is a key metric, I think, for a consumer disposable income. And then secondly, as I mentioned in the presentation, I think the uncertainty around the political future of Brazil is kind of still worrying consumers. So that the upcoming election and the lack of certainty around it is likely to win that. I think it’s also giving consumers pause. Having said all of that, you are seeing some of the big ticket purchases, for example, cars is starting to grow. So there were some indications that it’s starting to happen, but we still to see it in core consumer categories.

And then your last question on London Essence, we haven’t mentioned it primarily, because it’s really small at this point. This is the premium mixer in the marketplace. We sell it at a 5% to 10% premium to the leading premium mix of brand and we really intent on growing it in the right way, which means starting at the top at premium outlets and building it down through – from a – sort of triangle approach. So what else can I say? We’re in about 300 plus of the right sort of outlets in and around the UK, primarily in London and in Edinburgh. And we’ve also launched at Christmas last year into selected Waitrose and selected Tesco stores, where the brand performed very well without any support, and then we’ve also started to roll out internationally. So in Ireland, where we have the benefit of owning our own wholesale route to market, we’re in about 180-odd outlets and London Essence and Teisseire actually are doing nicely there. And then we started to build our distribution network in a number of other major cities around the world, which will be a continued focus for us in the months ahead. So, it’s early days. But what we do know is that consumers are responding very, very positively to brand. It looks great, it tastes great. All of them are low and no-sugar, so they’re all low calories. We’ll be bringing out a 500 ml offer in the second-half and we’re bringing out some incremental flavors in the second-half as well. So, yes, early days, but exciting progress.

Andrew Holland also from SocGen. Just coming back to GB Stills, your margin took a bit of a dive in the first-half. You said that the new Robinsons launches were coming in at higher than average gross margins. I’m just going to work out what’s happening to the margins there? Why they’re going down? Presumably, it’s because of the relative margins of the new products versus J2O and Fruit Shoot. But perhaps you could give us an idea of what’s happening there and in particular, how that might move in the second-half if everything comes to pause as you anticipate?

Yes, go ahead.

So, as you – I guess, as you are asking the question, both particularly J2O and Fruit Shoot are already good margin brands. So the decline of those brands has driven a chunk of the margin decline. And then we are seeing on those brands, where we’ve been in decline. We’ve also seen the COGS – some underlying COGS inflation. I guess, our price realization on those has been more constrained. So those are the two factors. As we look forward, we do expect as the roll out is – as the roll out completes, we’d expect Robinsons, which is margin accretive to what it’s replacing, which is the existing Robinsons portfolio to be accretive. So we’d expect that to have a significant – a more significant contribution in the second-half. Simon spoke about the stuff, the activity we undertook in Tesco at Christmas. As we start to roll out to the rest of the market, I would feel that would be supportive for margins. And then, obviously, that – Simon has talked about the activation plans that are coming in the second-half of the year. Clearly, if those deliver the volume growth that we hope that they will that would obviously also be supportive for margin. So I think, we – we’re confident that, we should see an improving trajectory in the second-half as we’ve called out, not just focus on revenue, but also on margin.

But the new Robinsons that we see in front of us are lower margin than Fruit Shoot and…

Lower margin than J2O, not necessarily Fruit Shoot. Again, it will depend on the pack and the activation of the different ones as to, for example, single-serve Fruit Shoot would be high margin than multi-pack as you would expect on any single-serve brand relative to multi-pack. So you probably have to get on to pack to really get clearer on – it’s also to do with the mix.

Good morning. Richard Felton from Morgan Stanley. Just a quick question on input costs, firstly, please. So we’ve seen some creeping cost pressure, particularly on aluminum and, more recently, PET. Can you just remind us your exposure there and how you’re hedged for the rest of the year? And then secondly, on the International division, I believe that your full-year 2017 results, you said you’re still in net investment phase to the tune of £5 million to £10 million. Is that still approximately the scale of net investment phase, or as you’re looking to exit some of the unprofitable contracts, particularly in Benelux, are you creeping closer to breakeven? Thank you.

You’ll do one, and I’ll do two.

Yes. So you’re quite right to say there’s been some volatility in aluminum, in particular, into a lesser extent PET. We are pretty much fully hedged for this year. We do have some – PET is the only area, where we don’t fully hedge forward, primarily because you can’t. And so we would have some exposure at the back-end of our year towards PET, but I would expect that to be relatively limited in nature and I would expect any impact from aluminum to come next year rather this year. Having said that, we’ve also – we’re already seeing that spike starting to dissipate somewhat. So it’s probably too early to comment on what the likely expectations for next year are.

And – yes, in terms of international, the lower number is probably closer to the kind of place we are at the moment. And yes, we – we’ve kind of moved down from probably £15 million a few years ago, so we will move to break-even, but that’s not our core goal actually. It is about establishing a presence in different markets and will judge the level of investment against the progress in those markets. Over time, I think, it’s fair to say that, if we weren’t moving in the right direction, we’d choose to do something different. So I think, it’s safe to assume that we will move to break-even and beyond in the medium-term. But we’re more focused on establishing the brands in different markets, I guess. But in terms of Belgium and Holland, a lot of the remedial work has now been done, if you like. So we’ve obviously been building the quality of the Fruit Shoot pricing and distribution back in Holland. And likewise with Teisseire, the performance of Teisseire in Belgium was actually really strong. It’s a lead brand in Belgium. And we’ve just launched Pressade in Belgium so – and then the travel and export business is quite a mix. And you will always have some contract, which are not as profitable as others, but having the brand in certain places is good for the brand as well. So there will always be a little bit up and down.

Damian McNeela from Numis. Just on the dilutes category in the UK. Can you give us an update on the volume performance of that category please and how Robinsons volumes have performed there? It’s pretty clear that the brand is back in growth in revenue terms. And then more generally, in the sort of UK retail, we’ve seen a degree of consolidation already with Tesco and Booker and the proposed merger of Asda and Sainsbury’s. So just wondering whether you could provide any sort of commentary on how Tesco/Booker merger has impacted you so far and how you’re positioned if Asda, Sainsbury’s go through, sort of combat any price pressure coming in your direction?

First, volumes, and I’ll do the retail.

So if you look at the overall dilutes category, it’s slightly underperforming the broader soft drinks market, both volume and to a greater extent value. And in that context, therefore, Robinsons is outperforming the category, particularly in the more recent time periods, so the four-week time period or 12-week time period. Four weeks can be quite volatile depending on promotional activities, et cetera. But if you look at 12 weeks, you’ll Robinsons sequentially improving over the course of the first six months as we started to roll out the Robinsons range.

And then on the change in retailer environment, I guess, I’d say just a couple of things. The UK retail has always been tough because over this –and I think in the changing environment, we have successfully managed through that, and I believe we would continue to do so. On the back of our portfolio breadth and the back of innovation and the back of our revenue management programs, it is all about growing value for your customers and doing the right things for consumers. And our customer relationships are in a strong place. Let’s see what happens with the Sainsbury’s, Asda as that comes through the CMA, et cetera. With Tesco and Booker, very strong position with both of those two of our – still our biggest customers coming together. And as they have come together, that position remained strong and robust, and we’ve got some great activation plans with them for the summer period ahead.

Hi, Simon Hales from Citi. Could you just talk a little bit more about some of the phasing changes that you highlighted between H1 and H2? I mean, you talked about the retailer buy-in that was sort of ahead of the sugar levy. Can you quantify what perhaps the impact that had on EBIT in the first-half? And then you also flagged the phasing of A&P spend. What’s driven that shift from H1 to H2 in sort of France and Brazil and some other markets? And how confident are you that, that spend will go back in the second-half, particularly against the weak Brazilian backdrop?

Yes. So do you want me to do the phasing?

I think so.

Yes. So – and so I mean, let me deal with retailer buy-in first. So retailer buy-in was fairly limited, and it was typically in smaller customers and channels, and largely whether it’s wholesale, i.e., warehousing available. It probably was no more than 1% of volume in carbonates. So it’s a relatively small amount, maybe 1% of the growth was due to it. So it wouldn’t have had a material impact on our profit in the first-half. In terms of A&P, I guess, we’re on intent on maintaining a level of flexibility, given the uncertainty surrounding the consumer impact of the levy. Having said all of that, our current expectation would be that A&P would be up year-over-year. What that reflects, therefore, is the phasing into the second-half, and that’s driven by three factors in the markets you’ve highlighted. From a GB perspective, it is specifically driven by an intent to be very present in consumers’ minds around the implementation of the levy, and you’ve seen some of – Simon showed you some of the campaigns, and that’s because consumer habits are reforming, being in consumers’ minds is key. So that’s what’s driven the GB phasing, and also I guess, to a lesser extent, the timing of the launches of Mojo and the timing of the new Fruit Shoot variants all activating in the second-half. In France and Brazil – in France, it’s driven by a desire to better match us funding against the key summer trading period. So we’ve moved some spending to get into our activation plans in France in the second-half. And in Brazil, it’s driven by the timing of the roll out of some our new activations and brands. So we were launching Fruit Shoot a year ago in the first-half. Maguary Uno was slightly out there, that kind on Maguary Uno, for example, in the second-half. So it’s driven more by the just phasing of our activity rather than a deliberate choice about where we choose to deploy the investment.

I think we have time for just a couple more.

Ned Hammond from Berenberg. Firstly, have you seen any impact on any of your single-serve products, given the media attention around plastic? And then secondly, you talked about significant increase in free cash flow next year. Is there any chance we see that used towards increased activity in M&A, again? And then finally, where are you in terms of distribution points for the Fruit Shoot multi-packs? And are you at a point where you can make a decision about the sort of long-term sustainability of that business?

I’ll do the last two. Okay, yes. Yes.

So I think – I mean, the simple answer on the question of single-serve in plastics is, we have seen almost no impact yet on that – on our volumes at all from any of the sensitive view around plastic. And so it’s not to say – I think partly because they’re recyclable, but I think partly because they fulfill an important consumer need. So I think we haven’t seen any impact at all. From a free cash flow perspective, next year, as you see the step-up, we’re obviously at an elevated – towards the upper-end of our guidance range from a net to EBITDA perspective. So certainly, next year, I’d anticipate that the incremental free cash flow would be deployed in terms of stepping our net to EBITDA down back towards the middle of the range. And obviously, beyond that, we continue to see opportunities to invest for the benefit of shareholders, then we will take those, whether they be organic or, I guess in more limited ways, M&A, if there are opportunities. You’ve seen that in our historical performance. But I think the priority in the initial term is to – will be to get back to – move to middle or bottom-end of that, our net debt range.

And then Fruit Shoot in the USA multi-packs, so yes, we kind of – we’ve been through the second year. We really are in our second year of multi-pack, and we’ve been through the second year of conversations with the big retailers, which had predominantly gone positively. So our focus has been on expanding the distribution and/or the quality of space and shelf, either by range or by location. And yes, I’d anticipate that as we go through the resets on shelf and we see we’ll get upwards of around 45% in the States. This isn’t really about – by example, one of the bigger customers, Walmart, we’ve moved from four SKUs in the top shelf to seven SKUs in the middle of the kids’ aisle and we would anticipate an improved record sale on the back of that. And also what’s quite pleasing is, we’re starting to see the Fruit Shoot Hydro just to sit alongside the Fruit Shoot core. So like the stores, still a long way to go and a long journey ahead for Fruit Shoot in the States, but we continue to make positive progress. And from a single’s perspective, as I mentioned in the presentation, it’s obviously benefited the Dollar General stores, but we continue to take market share albeit in a fairly challenged category in the States.

Chris Pitcher from Redburn. A few questions. On the CapEx outlook, now that you’ve been through the BCP program and you’re seeing the benefits in the GB business, can you reassure us that France and Ireland take leader sort of healthy dose of CapEx to upgrade flexibility there? Then secondly, can you give us a bit more color on supply into Northern Ireland and what the implications of a hard border might impact on that? And then thirdly, on the French business, what level should we assume privately label finds a base at, or are you trying to phase that out over time completely? Thank you.

Okay. So with the CapEx outlook, Mat has given you a fairly broad guidance on what that sort of looks like. The way you phrase the question is that some CapEx would be a negative thing. I think, we will choose to spend if we see a good return. And I think that would apply to the program that we’ve just implemented, as well as into any of other business units. Of course, the scale is completely different. So I think the guidance that Mat has given is robust, even considering potential opportunity for work across the supply chain in other business units. From a Northern Ireland perspective, I think we probably benefit from having a manufacturing facility in the Republic of Ireland, and obviously, we can choose how we service Northern Ireland. At the moment, we service the island of Ireland out of the republic manufacturing site. But if things went in a way that, that wasn’t appropriate, we could choose to service Northern Ireland from a GB site, for example. So I think we’re well placed to deal with that as it becomes clearer. And what was the final question?

Private label.

Private label. So yes, I mean, it’s still a significant chunk of our business. It’s not strategically important, but it helps. It kind of helps full – it helps full the factories. We’re intent on growing our brands, existing brands and we’re looking at expanding the portfolio over time. But it will play out over time. It’s not material, really one way or the other. If we take one last, one last question.

Hey, morning. Komal Dhillon from JPMorgan. So very strong numbers on GB carbs. And as – and obviously, you’ve gained a lot of market share in the past and now. So could you comment on that market share gain going into the sugar tax? And then following on from that, what is – do you think is a sustainable level of growth for that part of the business? And then final one on the cost of debt. You said, Mat, that you’re going to do – be issuing new debt in June. Can you give us any guidance on what that will do to the total cost of debt please?

So I’ll do carbs. So yes, I mean, we’ve taken about 200 basis points of share with Pepsi MAX in the first-half and Pepsi overall, that was about 160 basis points. I think, if you look over the last 10 years or so, it probably would have averaged more around a point a year, I guess. Is that sustainable? I guess, we got also a question we have. I mean, we’re intent on growing MAX. Max, as we know, is the best tasting low sugar variant out there. It continues to grow strongly. So that’s the brand we market behind ever since 2005. And I think the combined marketing-pricing strategy and the customer relationship and execution store that we have gives us confidence that we’re up against a really strong competitor. So we’re never overconfident, but we continue to deliver great commercial and marketing programs into market.

I mean, on the cost of debt, we’re typically giving guidance about the level of interest charge, because it depends on the level of gross debt, the level of net debt, et cetera. So it’s probably easier to think about it like that. Having said that, I guess, the new debt we – in the price securing and we secured last year was closer to kind of 2.5%, whereas the historic average would be more like 3.5% to 4.5% So we should see the average cost of our debt trend down. But in terms of the exact percentage across our net debt, it depends as well – it depend on – obviously, the return on cash is extremely low. So the net position is a trend downwards, but it’s probably better to think of that total interest charge. And I would expect, as I said previously, our total interest charge to tick obviously, but that reflects an increase on our total level of debt at an average interest rate that’s slightly lower, which leads you to a slightly higher charge. That’s kind of how the math works. And as we go forward, assuming the net debt circle as I just described in answer to one of the other question, you would expect that to start to tick down and see that benefit of interest rates coming through on the level of net debt. A - Simon Litherland: Very good. Okay. Well, that’s it, guys. Thank you very much for coming. Thanks for your support, and thanks very much for your questions. If there are questions that remain unanswered, the team will be happy to answer them outside of this morning, and have a great day. Thank you.