ag barr h1 26 27 presentation transcript final

Presenters

Euan Sutherland, Chief Executive Officer (ES)

Stuart Lorimer, Chief Finance & Operating Officer (SL)

Slide 1 – Introduction (Front Page) (ES)

Good morning and welcome to the AG Barr results presentation for H1 2026/27.

Slide 2 - Today’s Agenda (ES)

I’m Euan Sutherland and today I’m joined by Stuart Lorimer, our Chief Finance & Operating Officer.

Over the next 30 minutes we’ll provide a full review of H1 covering both the progress we are making executing our strategy and our financial results. We will also provide a number of proof points on early lead indicators of our strategy across the business and leave plenty of time for your questions.

Turning to the headlines on page 3.

Slide 3 – Strong Progress Against Strategic Priorities (ES)

In the first half of the year, we made good progress against our strategy with a number of major projects completed.

Our core brands are carrying good trading momentum, with IRN-BRU, Rubicon, and Boost all performing well in the market. Additionally, the product innovations we launched over the past year are outperforming our expectations and driving incremental growth and we have successfully completed the integration phase of Fentimans and Frobishers, with synergies coming through from

H2.

Financially, the business continues to deliver even with short term supply constraints during the peak summer trading period. Revenue grew 8.5%, reflecting core brand momentum and the contribution from our recent acquisitions. Critically, we maintained a strong operating margin and

ROCE, in line with our financial framework.

Looking ahead, our positive brand performance has continued into the early part of H2, and we remain on track to deliver full-year results in line with market expectations.

Slide 4 – AG Barr Growing Ahead of the Market (ES)

Before diving into the business in more detail, I want to provide a brief overview of the soft drinks market in the first half, and how we performed within it.

The total soft drinks market grew by 6.7%, with higher growth in the second quarter due to warm summer weather, especially in the south.

Growth in the market was driven by Energy & Sports, Still & Juice drinks, Water and Dairy - all of which were up between 10 and 15%. The carbonates category grew more slowly at 3%.

Against this backdrop, A.G. Barr outperformed the wider market, delivering 7.2% growth, with Boost and Rubicon the primary drivers behind the out-performance. Importantly, England saw the biggest increase in share for AG Barr growing at +11% in the 26 weeks driven by strong growth from IRN

BRU Zero, Rubicon Sparking and Boost Sport.

We believe these metrics prove that our commercial strategy is beginning to show results and gives us confidence for the second half of the year and beyond.

Slide 5 – Continued Strategic Progress (ES)

Turning to Slide 5, we continued to execute our plan across each of our five strategic growth platforms in the first half of the year.

We will cover many of these points on this slide later so at this stage I will summarise that we are pleased with the progress we’ve made in H1 - strengthening our business today while adding to the foundations for sustainable, growth over the long-term.

Slide 6 – H1 Supply Chain Update (ES)

Turning to page 6 and before shifting focus to our plans for the second half, I want to provide an update on the supply chain programme, and the one-off issues we highlighted in our recent trading update.

During the first half, we executed several complex operational projects. These included the final phase of our manufacturing line upgrade programme at Cumbernauld, the integration of Fentimans and Frobishers into our network, and the rollout of a new demand & supply planning system.

As we moved through the second quarter, it became evident that embedding that new planning system had created some operational bottlenecks. In response, the team took swift action, and the issues are now resolved. We are seeing inventory levels and customer service metrics improving each week and these will normalise through to the end of H2.

With the Cumbernauld transformation now complete, and our manufacturing upgrade in Milton

Keynes proceeding on plan, we are confident that we have two strong, stable and world class factories with significantly more capacity and capability to underpin our growth plans.

Slide 7 – Building to a strong H2 (ES)

Moving to Slide 7, and in summary we have entered the second half of the year with a clear plan to continue the brand growth we’ve built in H1.

Current trading is on track as we drive volume and value growth across the portfolio, including in the newly acquired and integrated brands.

Operationally, we are in a stronger position - with much of our factory change agenda now complete and availability and service improving every week. This gives us the robust foundation we need to meet the growing customer demand we are seeing for our brands

There is only one operational project of scale in H2 which is adding our second can line in our Milton

Keynes factory, and this is progressing well.

I will now pass to Stuart to take you through the financials.

Slide 8 – Financial Results Divider (SL)

Thank you, Euan.

Today, I will start with a review of what the business delivered in the first half of 2026/27 - a period where we continued to make strong financial progress – and I will conclude with an outlook for the second half of the year before handing back to Euan to provide some highlights on business activities and plans.

Slide 9 – Financial Scorecard (SL)

Starting with our standard financial scorecard, we will cover many of the metrics on subsequent slides so I will only call out a few headlines here.

I believe the scorecard demonstrates another period of good financial results.

• Revenue grew 8.5% to £247.4m, led by our acquisitions and core brands, and despite a c.£10m impact from supply constraints that had a temporary but significant effect on service.

• In a period of significant change, we maintained a strong and sustainable operating margin of

15%, and we are on track to deliver year-end ROCE within our target range of 19-21%.

• Revenue growth and sustained operating margin were partially offset by higher interest costs, resulting in profit before tax growing 2.6% to £36.1m.

Gross margin was diluted by the impact of recent acquisitions – as well as corrective action to support service recovery. We are forecasting a stronger gross margin in H2, as integration synergies and improved operating efficiencies come through.

We will cover the balance sheet and cash flow in a moment, but our £47m net bank debt is in line with our expectations. This reflects the active deployment of our balance sheet over the past twelve months on acquisitions and capex, as well as normal working capital phasing relating to summer trading.

Combined with continued market share gains, encouraging innovation and the actions taken to resolve the supply challenges, we enter H2 in a strong position and remain confident in delivering market expectations.

Slide 10 – Brand Revenue Performance (SL)

Slide 10 provides an overview of our Net revenue performance, where our core soft drinks brands continued to underpin the performance of the Group. These results reflect the missed sales opportunities from our supply constraints

Euan will be providing more insight into our brand activities in a moment, so I will share only a few headlines.

• IRN-BRU remains our largest brand, accounting for 29% of Group revenue. While revenue was broadly flat in the period, the brand exited H1 with encouraging momentum, supported by continued brand activity, good performance in England and promising growth in IRN-BRU Zero.

• Rubicon, which represents 19% of the Group, delivered 1% revenue growth, supported by continued brand investment and new product development.

• Boost once again was the standout performer, delivering revenue growth of 8%. This was delivered by a combination of continued penetration in convenience AND grocery, and the expansion of the brand into healthy hydration through the successful launch of Boost Water+.

• Within Portfolio Brands, which represent 29% of the group, revenue was down 6%.

This primarily reflects softness in FUNKIN and Barr brands and necessary portfolio prioritisation during the summer supply disruption.

• Finally, Fentimans and Frobishers accounted for c.9% of revenue in the period and drove our overall growth. With both brands now fully integrated into the company, our focus is on realising the commercial and operational opportunities we can bring to these brands.

Despite the service challenges, our brand strategies are delivering, and the overall portfolio is in robust health. We have a clear plan for H2 that will deliver growth through a combination of distribution, innovation and revenue growth management

Slide 11 – Cost & Operating Margin (SL)

Turning now to costs and margins.

We are not immune to the external cost headwinds affecting UK businesses. Energy costs, supply chain disruptions, environmental regulations and Government revenue raising actions are all recognised challenges.

We have been proactive in our response to these cost pressures - strengthening resilience and locking in certainty where possible while ensuring we protect growth capability. We have upweighted our procurement team and created more optionality through dual sourcing of key materials and putting in place a robust co-packer network to provide additional capacity during peak periods. We have continued to drive efficiencies in our cost base with our ongoing programme of manufacturing insourcing and effectively integrating acquisitions at pace.

We are continually balancing margin protection and growth opportunities and are pleased to report sustained 15% operating margins while progressing our strategic agenda.

Looking forward, the external outlook remains challenging, and we expect that inflation, interest rates and oil pricing will stay high for longer. It is therefore important that we continue to manage costs on multiple fronts. Our hedging programme and contract management provide cost visibility over the medium term. We have long-term contracts in place for cans, electricity, water, CO2 and other key materials and we have hedging cover for major ‘hedgeable’ commodities like aluminium,

PET & sugar. We have full hedging cover for the balance of 2026/27, and we are in the process of building our hedge position for 27/28 - albeit at more elevated pricing levels.

Slide 12 - Strong & Sustainable Cash Flow Generation (SL)

Turning to slide 12 and a more detailed review of our cash flow and cash deployment

We started the year with £41.6 million of net cash and generated £33.9 million of Profits Before Tax during the period.

The major operational outflow during H1 was the increase in working capital in support of trading activities - a combination of trading seasonality and the timing of the final month-end payment run. This occurred in H1 this year when last year it fell in the first few days of H2. Last year’s H1 close date was 26th July.

This left us with a pre-allocation cash position of £33.9 million at period end

Our capital allocation remains aligned with our well-established framework:

• Capex at £23.4 million, reflects what is a peak investment year for the Group. Our investment included around £10 million at Cumbernauld where we completed the site’s multi- year refresh and upgrade programme, £10 million at Milton Keynes as we commence its expansion plans, and £3 million relating to Innate-Essence where we are insourcing High pressure processing capability;

• M&A spend of £40.5 million related to the Fentimans acquisition which completed in February; and

• We were pleased to continue our progressive dividend programme with a £17 million final dividend paid in June an 11% increase on the prior year

As a result of these investments, we closed the period with £47 million of net bank debt. This reflects the deliberate and active deployment of our balance sheet to support both organic and inorganic growth and remains comfortably within our leverage target of up to 2->2.5x EBITDA. We have significant debt capacity headroom.

While M&A continues to be a core element of our long-term strategy, we are not currently in any processes and do not foresee any specific opportunities in the near term.

We are a strong cash generating business with a clear, consistent and disciplined capital allocation framework backed by a robust balance sheet

Slide 13 – FY 26/27 Financial Outlook (SL)

In my final slide, slide 13, I’d like to remind you of our financial framework and confirm our expectations for the full year.

As set out previously, we have a simple and well-established financial framework which aims to deliver strong, consistent business growth and returns for our shareholders. The three key metrics

we target are

• Revenue growth of at least 4%;

• Operating margin between 14 and 16%; and

• ROCE of between 19 and 21%

We remain on track to deliver against all three metrics:

• We expect revenue growth for the full year to be at c.10% driven by recent acquisitions and supported by improved trading in H2;

• Operating Margin will be slightly above H1 performance as integration and insourcing synergies more than offset inflationary pressures and the incremental costs of service remedial actions; and

• ROCE is expected to be within our guided range, albeit at the lower end as acquisition costs and expansionary capex come onto the balance sheet with the full benefit of these being realised over the coming years.

Additionally

• We expect to have a net bank debt position of between 10 and 20 million pounds by year-end as working capital phasing unwinds and the business continues to generate cash.

• As previously communicated, this is a peak capex year. We continue to expect cash capex of approximately £40m.

• Lastly, we anticipate a c.£3 million adjusting cost - primarily relating to the one-off costs associated with the integration of Fentimans;

This ultimately translates into an expected PBT performance for the full year of between 71 and 72 million pounds, in line with market expectations.

The 26/27 plan and indeed our whole operating model are designed to deliver consistent top and bottom-line growth, while ensuring we have the brands, capability, and capacity to sustain this growth over the long term. With the progress we have made in the first half and the actions now in place, we remain on track to deliver our full-year expectations.

With that, I will hand back to Euan.

Slide 14 – Business Update Divider (ES)

Thank you, Stuart. I will now explain in more detail the progress we are making towards our strategic priorities.

Slide 15 – Delivering on Strategic Commitments ES)

Turning to page 15 - Our strategic framework and commitments from 2024 are unchanged. There are now strong proof points of progress starting to appear which I want to highlight over the next few

slides. I want to cover

• The growing portfolio scale of AG Barr;

• Core brand growth especially in England & Wales and into the main grocery soft drinks aisle;

• Our value for money and the incremental pricing headroom still available to us;

• Early distribution gains in key customers; and

• Our proven integration formula, DRS readiness and supply chain investment

We have confidence in our strategy, our objective is to create a strong and consistent flywheel of growth, and we are focused on execution.

Slide 16 – Portfolio Strategy building Momentum (ES)

Turning to Slide 16, our portfolio strategy is focused on building a broader and more balanced portfolio which has engines for long-term growth across multiple market segments. In the last two years the portfolio value of AG Barr has significantly increased.

At the heart of our business is Everyday Refreshment. This core pillar - led by core brands IRN-BRU and

Rubicon - provides us with significant scale. At only 3% UK market share we also have significant growth headroom, and our strategy is focussed on maximising revenue and profit here.

Alongside this, we are intentionally increasing our participation in the high-growth Daily Performance space which spans energy, sport and functional drinks. We are unlocking highly attractive structural growth here as consumers increasingly pivot toward functional benefits and healthy hydration.

Our third pillar, Elevated Experience, stretches our presence into new and different drinking occasions. This segment represents a significant long-term opportunity, which we have materially accelerated through the acquisitions of Fentimans and Frobishers.

Crucially, these segments target distinct consumer needs and separate occasions, ensuring no portfolio cannibalization.

Slide 17 – Core Brand Momentum (ES)

Turning now to the highlights from the commercial progress we’ve made across our core soft drinks brands.

Starting with IRN-BRU, the brand is experiencing growth driven by two key strategic priorities - expanding in England and accelerating rebranded IRN BRU Zero. We completed the rollout of the IRN-BRU brand refresh in Q1 and since being rebranded, IRN-BRU ZERO has performed strongly, delivering 7% revenue growth and 10% RSV growth in the period.

IRN-BRU’s expansion in England has also picked up pace, with 7% RSV growth achieved in H1, underpinned by a strong 19% RSV growth in Zero. We continue to view England as our primary scale opportunity for IRN-BRU, and these results give confidence our strategy is working.

On Rubicon, our focus is to increase the brand’s mainstream presence across the UK market. Our main soft drinks aisle strategy is delivering strong results, yielding 16% RSV growth in Sparkling, with 13% RSV growth in Mango Sparkling and distribution of our new Tropical and Cherry variants into major grocery customers.

Innovation is also a core engine for Rubicon’s growth and new additions to the range of Twist and Dilutes has delivered £2m of incremental revenue in H1 backed by important listings in Tesco and Sainsbury's.

We continue to see significant growth runway for Rubicon.

Thirdly, Boost continues to carry strong momentum. In H1 we saw 6% RSV growth in Boost Energy and an outstanding 24% RSV growth in Boost Sport. Crucially, we are starting to convert this demand into valuable grocery distribution gains through Co-op and Morrisons.

On innovation, Boost Water+ has made a great start, outperforming our expectations to generate £3 million in incremental revenue during the period - this is currently only in the convenience channel. Further growth in Boost Water+ is a sizeable opportunity for 2027/28. We expect Boost to continue to be a key growth driver for the Group.

Whilst we don’t detail FUNKIN’s performance on this slide, I wanted to call out that it continues to show a sales decline. However, it is also important to note that the brand’s profitability has been significantly improved over recent years through full integration into AG Barr, with the brand now broadly in line with the Group’s operating margin. We will look to stabilise and grow from this more profitable base in 27/28.

Slide 18 – Great Value Remains Core to AG Barr Proposition (ES)

Moving on to Slide 18, I want to highlight our strategic approach to brand pricing. As you can see, even after taking a lot of price over the last two years we still have clear price headroom versus key competitors across our core brands.

Looking at the data, our IRN-BRU and Rubicon 500ml PET products sit at an accessible £1.29, below key category comparators like Coke Zero and Fanta.

We see a pronounced competitive advantage within our functional ranges. Boost 500ml Energy at £1 compared with Monster at £1.75 and Boost Sport at £1 compared to Lucozade at £1.65 offers incredible consumer value while maintaining strong retailer margins.

Structurally, this positioning delivers three critical benefits for the Group:

• First, it maximises our value return and maximises margins as we have insourced production;

• Second, it ensures an accessible price point for consumers against those premium benchmarks during a tighter economic climate; and

• Finally, as we continue to grow our brand equity, this gap creates significant pricing headroom and flexibility for us to take more price moving forward.

This is a strong position that protects our volume while leaving us well-insulated for the future.

Slide 19 – Brand Equity and Penetration are lead Indicators (ES)

Our confidence over future revenue growth is provided by several lead indicators which are showing positive progress. Firstly, distribution of our brands is up year-on-year by more than 15% across grocery and convenience – highlighting that we are winning additional space in our customers.

Secondly, our sales team has worked hard to improve in-store execution with brand displays up over

20% on our two biggest brands.

These factors are beginning to see higher penetration, with double digit growth in the number of households buying IRN-BRU, Rubicon and Boost.

All of which plays into stronger brand equity with consumers. In a recent YouGov survey Rubicon and IRN-BRU were first and third in improved consumer consideration when next buying a soft drink.

Overall, there are lots of positive lead indicators for us to build on in H2 and into 2027/28.

Slide 20 – Integration of Fentimans & Frobishers on Plan (ES)

Turning to value creation from acquisitions, where we now have a clear and proven model for integrating brands into AG Barr and unlocking value over time.

Boost is the most established example of this model. Since acquisition, we have successfully integrated the business, delivered cost synergies and accelerated commercial growth, whilst bringing production in-house in the last 2 years. This has given us a strong blueprint for how we approach our acquisitions – and we are applying this blueprint to Fentimans and Frobishers.

The integration of both brands was completed in H1, in line with plan, with expected overheads cost synergies coming through in H2. H2 also provides us with the opportunity to start realising commercial growth synergies as we leverage our brand building capability and larger sales network to deliver growth.

Beyond this, we see further value creation with Fentimans through bringing manufacturing in-house in early 2028. So, while each brand is at a different stage, the model is consistent:

• Eliminate duplicate costs;

• Leverage A.G. Barr’s sales, brand and innovation capabilities to drive growth, and, where appropriate; and

• Bring manufacturing in-house to reduce costs.

This creates a flywheel of improving profitability and reinvestment, supporting further growth across the portfolio.

Slide 21 – Well prepared for UK Deposit Return Scheme (ES)

On slide 21 I want to address our plans and readiness for the UK Deposit Return Scheme which is a significant change programme. Planning is underway across the Group for the October 2027 launch.

As you know, consumers will pay a 20p returnable deposit on all plastic and metal drinks containers sized between 150ml and 3 litres.

Looking at the potential impact on the market, we have analysed the data and learnings from the

Irish scheme launched in 2024. Based on that rollout, we anticipate some short-term disruption as producers, wholesalers, retailers and consumers adapt to the scheme.

However, we expect limited impact on volumes over the longer term and anticipate any temporary impact to have normalised by early 2028. It is likely the market will see some consumers shifting toward higher-volume per unit packs, such as the 2-litre format and we have manufacturing capacity to handle this.

In terms of AG Barr’s preparations, we are in a good position at this early stage. A key element to the project is the execution of the large-scale label change programme as the new DRS logo is added, there will be one-off implementation costs alongside a potential small, adverse impact on working capital.

We will continue to update the market as we progress towards launch later next year. Through the work we’ve done to date, we believe we are well-positioned to navigate this transition smoothly and protect and grow our market position.

Slide 22 – Supply Chain Capability & Capacity (ES)

Turning the page, we continue to build our supply chain capability and capacity. I am pleased to report that our major capex projects at Cumbernauld and Innate-Essence were successfully completed in the first half.

At Cumbernauld, our new high-speed can line is now fully commissioned, delivering a significant step-change in our core volume capacity. Alongside this, we have added new PET sleeving capability, which has allowed us to insource Boost Sport and Boost Water+ volume from the start of H2.

Moving to Innate-Essence, the investment in new high-pressure processing equipment is fully implemented, unlocking manufacturing efficiency and capacity within our functional portfolio.

Finally, our Milton Keynes site expansion is progressing well, including the installation of a second independent can line, which will step up both our capacity and technical capability from early

2027. Importantly, this site expansion paves the way for our planned Boost Energy insourcing across the 27/28 financial year.

Slide 23 – Summary Divider (ES)

Now to conclude with a summary before moving onto your questions.

Slide 24 – Summary (ES)

In the first half, we made significant strategic headway across each of our growth platforms, backed by robust underlying financial performance.

Importantly, we have resolved the short-term supply chain constraints that impacted our Q2 performance and availability, and service is improving each week.

As I outlined, our preparations for the UK Deposit Return Scheme are progressing well. We have good understanding on the likely market and business impacts as we execute our road map towards the October 2027 launch.

Our in-market performance in the first half gives us confidence to commit to delivery of full-year market expectations of approximately 10% revenue growth, a c.15% operating margin, and a c.19%

Return on Capital Employed.

Looking beyond the current financial year, I am even more confident today that we are building a stronger, broader, and more resilient A.G. Barr. Through our larger brand portfolio which has multiple routes to growth, our commitments to value for money and price headroom and our greater manufacturing capability and capacity, we have the building blocks in place to support sustainable long-term growth and consistent strong financial results.

Thank you very much. We will now open the room to take your questions.

-Ends-