A G BARR p l c : Interim Report FY 2022/23

A.G. BARR p.l.c.

Interim Report 2022

"We made a very strong start to the year and continue to see good momentum across our business and brands.

That said, the UK's high level of inflation has accelerated across the summer and is creating a well documented cost of living crisis for many consumers, alongside increasing challenges for industry.

We continue to take action to mitigate the cost pressures we face both in the short term across the balance of the current financial year and where possible into 2023.

We anticipate in the coming months that the current economic environment will impact consumer purchasing behaviour, however

we currently remain confident that our strategy and actions will allow us to deliver a full-year profit performance ahead of the prior year."

CONTENTS

Interim Statement	1
Consolidated Condensed Income Statement	3
Consolidated Condensed Statement
of Financial Position	4
Consolidated Condensed Statement
of Comprehensive Income	5
Consolidated Condensed Statement
of Changes in Equity (Unaudited)	6
Consolidated Condensed Statement
of Changes in Equity (Audited)	7
Consolidated Condensed Cash Flow Statement	8
Notes to the Consolidated Condensed
Financial Statements	9
Statement of Directors' Responsibilities	21
Glossary	22
Reconciliation of non-GAAP measures	23
Independent Review Report to A.G. BARR p.l.c.	25

Roger White

Chief Executive

A.G. BARR p.l.c.  Interim Report 2022

Interim Statement

Mark Allen

We are pleased to report a strong performance in the first half of our 2022/23 financial year.

Roger White

Revenue was £157.9m representing year-on-year growth of:

• 20% on a like-for-like basis*, excluding both the 27th week in prior year** and the revenue contribution from MOMA Foods in the current reporting period
• 17% on a reported revenue basis (27 weeks** to 1 August 2021: £135.3m)

Reported profit before tax in the period was £24.7m (2021/22 H1: £24.4m). This strong profit performance was supported by revenue growth across all of our core brands.

The prior year first half profit performance benefited from a number of one-off factors, as reported at the time, and therefore this year's strong H1 profit delivery is all the more positive.

Adjusted profit* in the period was £25.3m an increase of 22.8% on the prior year first half (2021/22 H1: £20.6m). This takes into account the following:

• H1 2021/22: the impact of the additional week and the gain on sale of property
• H1 2022/23: the time value adjustment related to the MOMA deferred consideration

Inflation continued to accelerate across the UK in the reporting period. Against this backdrop we have actively managed our position through ongoing cost management actions and the successful execution of our pricing and promotional strategies across all our markets and channels.

Market context

Soft drinks: We maintained our value share of the total UK soft drinks market which increased by 8.1% across the period, while volume fell by 3.0%. Market performance was driven by broad-based consumer price inflation leading to significant value growth but reduced volumes. The soft drinks market also experienced year-on-year recovery in "drink now" out of home consumption in the more difficult to measure impulse channel. These dynamics are consistent across both carbonates and stills.

(Source: IRI Marketplace data for the 26 weeks to 30 July 2022)

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A.G. BARR p.l.c.  Interim Report 2022

Interim Statement continued

Cocktails: The value of GB cocktails across the ontrade continues to grow and is now worth £664m, up 13.2% year-on-year, while ready to drink (RTD) cocktails grew 24%, four times the rate of the RTD category as a whole.

(Source: Nielsen pre-mixed alcoholic drinks total coverage MAT 30/07/2022; CGA Q1 2022)

Oat milk: Across the UK grocery market, oat milk is growing 16% year-on-year, with one in three British consumers now drinking plant based milk.

(Source: Kantar May 22, Nielsen 52 w/e July 2022, Mintel Sept 2021)

Business performance

Trading has been strong across both our business units with a 12.3% revenue increase across Barr Soft Drinks and Funkin's sales up 21.4%.

The addition of the MOMA business has also supported our overall revenue performance. While, as anticipated, there is no positive impact on profit at this early stage, growth potential in this sector continues to be exciting.

Growth across the Group has been driven by ongoing brand investment and the successful execution of our pricing and promotional activity. Trading performance further benefited from the year-on-yearCovid-19 recovery across the market, particularly in the on-trade and out of home sectors, as well as good summer weather. The positive revenue growth in our core brands highlights the strength of our portfolio, our ability to flex price and promotions, the value we offer to consumers and customers as well as the positive impact of brand innovation - this includes further growth in Rubicon RAW Energy and Funkin nitro cocktails.

Operating margins in the period have been supported by sales growth, cost control and our pricing approach. We anticipate that this level of margin will not be sustained across the second half of the financial year given the impact of increasing costs, our continued brand investment and the volume impact of reduced consumer confidence. Therefore we anticipate our full year adjusted operating margin to be around 14%.

Cash flow and balance sheet

Net cash from operating activities was £11.4m, a decrease of £5.5m compared to 2021/22 (£16.9m).

Cash generated from the growth in operating profit was offset by the impact of an increase in debtors associated with strong summer trading and increased inventory from a combination of inflation and higher stock cover.

Capital expenditure in the first half of the year was £7.0m (2021/22 H1: £1.4m). This reflects investment in production capacity and capability, including new canning capacity at our Milton Keynes site and the commencement of our asset refresh programme at our Cumbernauld factory. Full year capital expenditure is estimated at £16-20m (2021/22: £5m) and expected to be maintained at this level for at least two further years.

The Group closed the period with cash balances of £61.3m (2021/22 H1: £65.6m), which was £7.4m less than the period opening position (£68.7m). Cash generated from operations funded the final 2021/22 dividend (£11.1m) paid in June, our capital investment programme and ongoing corporation tax payments (£3.4m).

Adjusted earnings per share* were 19.52p (2021/22: 9.36p). This significant increase on the prior period reflects the improved trading performance and the one-off impact in the prior period from the deferred tax adjustment arising from the change in corporation tax rate due in 2023. Excluding the one-off impact adjusted earnings per share grew by 35%.

Responsibility

We have continued to make good progress across our responsibility agenda, particularly with our "No Time To Waste" environmental sustainability programme. Highlights during the period include increased use of recycled material across our packaging as well as the approval of our near and long-termscience-based emissions reduction targets with the Science Based Target initiative (SBTi) and an SBTi verified science- based net-zero target across our value chain of 2050. These targets are aligned with the SBTi's

new Net-Zero Standard.***

Dividend

The Board has declared an interim dividend for the 26 weeks ended 31 July 2022 of 2.5 pence per share (2021/22: 2.0 pence) payable on 28 October 2022 to shareholders on the register on 7 October 2022.

Outlook

The UK's high level of inflation continued across the summer and is not expected to abate in the short-term, leading to challenging economic conditions for both consumers and industry.

We will continue to invest behind our brands to support long-term growth while at the same time taking appropriate mitigating action to limit the full year impact of cost inflation.

Our brands are performing well and our business and people have continued to demonstrate both their resilience and flexibility. We anticipate in the coming months that the economic environment will impact consumer purchasing behaviour. However we currently remain confident that our portfolio of strong brands and our established strategy will allow us to deliver a full-year profit performance ahead of the prior year.

Mark Allen	Roger White
Chairman	Chief Executive

• Items marked with an asterisk are non-GAAP measures. Definitions and relevant reconciliations are provided in the glossary on pages 22 to 24
• 2021/22 was a 53-week financial year with a 27-week first half. 2022/23 reverts to a 52-week year with a 26-week first half
• Full details of our science-based emissions reduction and science-basednet-zero targets can be found at https://www.agbarr.co.uk/responsibility/no-time-to-waste/

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A.G. BARR p.l.c.  Interim Report 2022

Consolidated Condensed Income Statement

		Unaudited	Unaudited
		Six months	Six months	Audited
		ended	ended	Year ended
		31 July 2022	1 August 2021 30 January 2022
		Total	Total	Total
	Note	£m	£m	£m
Revenue	6	157.9	135.3	268.6
Cost of sales		(88.5)	(73.8)	(150.0)
Gross profit	6	69.4	61.5	118.6
Other income		-	0.7	0.7
Operating expenses		(43.9)	(37.6)	(76.6)
Operating profit	8	25.5	24.6	42.7
Finance costs	9	(0.7)	(0.2)	(0.4)
Share of results of associate		(0.1)	-	(0.1)
Profit before tax		24.7	24.4	42.2
Tax on profit	10	(3.8)	(10.2)	(14.4)
Profit for the period		20.9	14.2	27.8
Attributable to:
Equity shareholders of the parent Company		21.1	14.2	27.9
Non-controlling interests		(0.2)	-	(0.1)
Earnings per share (p)
Basic earnings per share	11	18.98	12.78	25.09
Diluted earnings per share	11	18.81	12.71	24.95

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