C&c Group Plc · LSE:CCR
C&c — Investor Day (May 2022)
79 slides from C&c's investor day presentation, May 17, 2022
Slide 1: Welcome to C&C Group
WELCOME TO C&C GROUP
Slide 2: Disclaimer
Disclaimer This presentation is not intended to and does not constitute or form part of any offer, or invitation, or solicitation of any offer to issue, underwrite, subscribe for, or otherwise acquire or dispose of any shares or other securities of the Company in any jurisdiction or an inducement to
Slide 3: Introduction
C&C Group Introduction Today we are going to provide updates on the strategic development and insights into our future growth ambitions. The last two years have seen unprecedented challenges but we see a number of opportunities with C&C well positioned. David Forde Chief Executive Officer Patrick Mc
Slide 4: Today's Agenda
C&C Group Today’s Agenda Time Content Presenter 13.30-14.00 Introduction and our journey David Forde 14.00-14.30 Financials Patrick McMahon 14,30-15.00 Brand strength Lucy Henderson 15.00-15.20 Break and refreshments 15.20-15.50 System strength Clara Shand 15.50-16.10 Sustainability Richard Hayhoe 1
Slide 5: Vision, Purpose and Values
C&C Group and Vision Purpose To be the preeminent Play a role in every drinking brand-led drinks occasion, delivering joy to distribution platform, our customers and serving the UK and Irish consumers with remarkable drinks market. brands and service. Values Respect people and the planet We bring jo
Slide 6: Since we last met...
C&C Group ? Consumer Since we last met... Customer Fas Competitor @ Colleagues Premiumisation accelerates Health & wellbeing and concern for our planet Cost of living increase COVID restrictions fuelled Off-trade sales City centre venue closures and staff shortages Price increases and service simpli
Slide 7: A challenging time
C&C Group A challenging time C&C emerged a strong and better business, through significant management action Jan-March ® December Lockdown across all Ju ne Omicron A markets Supply constraints Feb ‘22 —=— Ukraine . Janua — April Ju ly mat? price Cyber attack Labour constraints pressure April May Jun
Slide 8: Market dynamics driving C&C's strategy
C&C Group Market dynamics driving C&C’s strategy K — Increasing alcohol regulation + Introduction of MUP + Introduction of structural separation + Revised duty regime + Advertising watersheds + Labelling requirements + Sports sponsorship bans az Tat Increasing consumer choice Proliferation of brands
Slide 9: C&C On-trade: Winning share through system and brand strength
C&C On-trade Winning share through system strength, and brand strength C&C Group ij = Change of Total Category Share Champagne Premium Beer Wine Cider 4% Lager +8.2% C&C GB share of drinks consumed 1in 5 drinks C&C share in GB & IO! Menabrea Innis & Gunn JUBEL Bulmers Source: Category data from CGA
Slide 10: A simple growth strategy
A simple growth strategy C&C Group Win more CUSTOMERS c.119,000 On-trade outlets in GB and Ireland Outlets delivered to Opportunity 10
Slide 11: A simple growth strategy
A simple growth strategy C&C Group Win more CUSTOMERS Increase our share of outlets supplied by C&C Outlets delivered to Opportunity "
Slide 12: A simple growth strategy
C&C Group 12 A simple growth strategy Win a GREATER SHARE of the CUSTOMER A " | i ~ / \ oa Jf BE = : Spires vine Beer Cider Softs
Slide 13: A simple growth strategy
C&C Group 13 A simple growth strategy Build OWNED & AGENCY brands within the CUSTOMER : Tito’. ae Pi joes se INNIS & GUNN’ @ Pacners ee MENABR Manda CATENA ZAPATA LONGBOTTOM & C® FINE BRITISH GOODS
Slide 14: Our growth strategy
C&C Group Our growth strategy BRAND STRENGTH CO @ SUSTAINABILITY ENGAGED COLLEAGUES ela) SYSTEM STRENGTH
Slide 15: Financials
Financial O—
Slide 16: FY2022: Solid trading despite disruptions
FY2022: Solid trading despite disruptions Easing of restrictions led to a return to profitability C&C Group €1,438m Net Revenue +88% vs FY2021") -18% vs FY2020") €47.9m Operating Profit* €63.6m loss in FY2021") €122.7m profit in FY2020 Adjusted for constant currency and pre exceptional. 16 * Post IF
Slide 17: FY2022: A return to cash generation
C&C Group 7 FY2022: A return to cash generation Business model with inherently strong cash generating characteristics Includes €43.6m investment into stock Adjusted EBITDA 79.7 | Underlying Debtor working capital Tax deferrals _ securisation (6.0) (51.0) — io 37.8 Net capital expenditure (14.8) Net
Slide 18: Balance sheet strength
C&C Group 18 Balance sheet strength Well positioned to execute our strategy Net debt* €m 500.0 400.0 : [ | 200.0 ol FY2018 FY 9 FY2020 Fy2021 FY2022 m Net debt ** “Net debt at reported numbers and IFRS 16 Lease accounting introduced from Feb-20. FY2018 cand F¥2019 are pre IFRS 16 3.0 Net debt/Adjust
Slide 19: Aligning our reporting segments
C&C Group Aligning our reporting segments to the way we now manage the business Primary GB & Ireland Secondary Own Brands and Distribution
Slide 20: Aligning our reporting segments
C&C Group Aligning our reporting segments to the way we now manage the business Primary GB & Ireland Secondary Own Brands and Distribution cac group ple “2:
Slide 21: GB: A new lens on the business
C&C Group 21 GB: A new lens on the business GB segment represents c.65% of Group operating profit €m Great Britain Constant currency* FY2022 FY2021 Change % Net revenue 1,213.8 598.4 102.8% PATicn ocded 170.1 139.0 22.4% of which Distribution 1,005.5 4142 142.8% Co-pack/Other 38.2 45.2 (15.5%) Opera
Slide 22: Ireland: A new lens on the business
C&C Group Ireland: A new lens on the business Ireland segment represents c.35% of Group operating profit €m Ireland Constant currency * (see 68 table) FY2022 FY2021 Change % Net revenue 224.3 167.4 34.0% of which Branded 78.3 48.9 60.1% of which Distribution 139.8 115.0 21.6% of which Co-pack / Othe
Slide 23: Trading well in Q1 to date
C&C Group 23 Trading well in Q1 to date... Good demand aided by improving trends in service levels and price On-trade Recovery vs FY2020 140% —— Direct delivered outlets —— Direct delivered volume —Total on-trade net revenue MCB OTIF Performance -— UK supply chain constraint —Customer OTIF —Suppl F
Slide 24: Challenging inflationary environment
Challenging inflationary environment Further price increases will be required to offset challenging cost outlook C&C Group Total cost of sales Manufacturing input cost (10%) Other cost of sales (90%) 24 Manufacturing inputs costs Sugar/Glucose 8% € Other input Costs 10% 4 Electricity 10% 10% of cost
Slide 25: A better business emerging following the pandemic
A better business emerging following the pandemic C&C Group MEDIUM-TERM RETURNS AND VALUE CREATION WHILST DELIVERING TO A BETTER WORLD GROWTH AMBITIONS Capital Returns + ROCE recovery + Reinstate dividend in due POSITION OF STRENGTH On-trade growth course (J) + Own brand focused — * Brand investment
Slide 26: Capital allocation hierarchy
C&C Group 26 Capital allocation hierarchy supporting our organic growth ambition Target net debt to EBITDA < 2.0x Organic Growth through brand investment SP Sustainability & technology in —=—~~our system of) Return capital to Shareholders Inorganic opportunities that strengthens our brand or system
Slide 27: Slide 27
Slide 28: Winning through brand strength
Winning through brand strength Our foundations for portfolio growth
Slide 29: Key trends driving consumer choice
Key trends driving consumer choice ° QO AGE OF WELLNESS @ CONSCIOUS CONVENIENCE &D GLASSBOX BRANDS atte O1 EXPERIENCE IT ALL C&C Group
Slide 30: Step changing our Brand Strength
C&C Group Step changing our Brand Strength Asimple formula to drive exponential growth a | ) oN ae ‘\\@ = Focus | Invest | Distribute Innovate | Ie Strong | future-proof portfolio 30
Slide 31: Investment prioritisation
Investment prioritisation Laser sharp focus to drive ROI Q D ay —el ——_——_ ee MENABREA sane High Potential adi 20-35% NSV DRYGATE =~ Seedlings WZ 10-15% BREWING . Strategic T 8-12% NSV pEPoy Tactical BY TG by ad 2-5% NSV Sie ADDLESTONES C&C Group
Slide 32: Right brands, right time, right outlet
C&C Group Right brands, Right time, Right outlet for the Right consumer PROOF A THREE TIER SEGMENTATION POURTRAITS Meet the POURTRAITS 32
Slide 33: Brand strength: Win in cider
Brand strength Our focus for growth is via 3 key pillars. Win in cider C&C Group 33
Slide 34: Winning in Cider
Winning in Cider What is the opportunity? Opportunity 7.1m HL 0.9m HL 13.0% Cider sold Cider sold by C&C C&C share of Cider across UK + ROI across UK + ROI! across UK + ROI C&C Group
Slide 35: Bulmers in Ireland
Bulmers in Ireland We are growing Cider Bulmers is now growing share of cider in Ireland MUP is demonstrating the brands strength We are focused on key trends for growth Leverage health (calorie) opportunity within “Light” Highlight our sustainable credentials And we are committed to investing in th
Slide 36: Reinvigorate Magners GB
Reinvigorate Magners GB {s) Power brand >. Se ed ‘ + a ._s EMiacners as& Investment al) Prioritise in C&C ™ %) Innovate [2s ) Drive channel distribution Cac 36
Slide 37: Win with a Portfolio Play
Win with a Portfolio Play Tapping into category trends MAGNERS IRISH CIDER ADDLESTONES CHAPLIN &CORK’S C&C Group
Slide 38: Brand strength: Grow premium beer
Brand strength Our focus for growth is via 3 key pillars Grow premium beer C&C Group 38
Slide 39: Premium Beer opportunity
C&C Group Premium Beer opportunity Huge potential for growth Opportunity 0.6m HL 4.0% 14.8m HL Premium beer sold by C&C C&C share of Premium beer Premium beer sold across UK + ROI across UK + ROI across UK + ROI 39
Slide 40: Targeting in action
Targeting in action Driving Menabrea in the right outlets with the right consumers Identify London 40k+ Opportunities for Premium Italian Beer Target Top 500 Build the premium & the demand C&C Group Win SIX»NICO THE IVY BOBO cuit FOGG 5y 30%+ additional customers vs 2019 in 2 mths 40
Slide 41: Big strides forward in Premium Beer
Big strides forward in * Peemium Beer . ——_ C&C Group
Slide 42: Brand strength: Attract & develop agency brands
Brand strength Our focus for growth is via 3 key pillars Attract & develop agency brands C&C Group 42
Slide 43: The last mile advantage
The last mile advantage Brand owners attracted to our distribution system Brand Owner Oo + Access to markets with marginal investment Ss + Access to the biggest distribution in the UK and Ireland + Partner with intimate knowledge of local territories & customers : a7) C&C + Enhance revenues/margin t
Slide 44: Innis & Gunn
INNIS & GUNN
Slide 45: Brand strength
Brand strength 1. Portfolio 2. Investment 3. Distribution C&C Group
Slide 46: System Strength
System Strengt - Ss
Slide 47: The Strength of C&C's business model
The Strength of C&C’s business model Unparalleled national reach and scale ry 6 & Q owned, stocked Q owned, not stocked Manufacture Procure Q Third party Owned, third party 7 operated - - ‘Owned, Manufacturing CNR Co ° Market Sell Distribute C&C Group
Slide 48: Fulfilling customer needs everyday
Fulfilling customer needs everyday Delivering customer needs for different customer segments Price Reliable Delivery Becoming Net Zero Market Insight uu BWDN = Enhanced Ordering *PROOF insight customer need survey 2021/22 and CGA business leader survey 2022 in association with fourth, ‘Bibendum and
Slide 49: UK and Ireland's strongest distribution network
UK and Ireland’s strongest distribution network The relentless pursuit to improve and outperform Competitive Set C&C GB Competitor A (Third party) Competitor B (Brewer WS) Competitor C (Cash & Carry) Competitor D (On-trade WS) Competitor E (Food service) We have the strongest last mile drinks distri
Slide 50: Delivering the ambition
Delivering the ambition More customers, increased share of the bar with more of owned and agency brands C&C Group 50
Slide 51: One C&C GB
One C&C GB: Streamline three into one powerful platform One leadership team One Network One functional department Multiple customer fascias C&C Group 51
Slide 52: Technology enabling our salesforce
Technology enabling our salesforce Brand and category based selling - the path to margin expansion CRM The next phase Price engine Automation Big data PROOF C&C Group 52
Slide 53: Customer experience: a digital future
Customer experience: a digital future Our platforms BULMERS DIRECT Sintianos Today Online order capture 63% The future Order capture 100% J Customer Query Resolution Enhanced service smart ordering 3rd Party Revenue p (lag EE: Platform non drinks revenue C&C Group 53
Slide 54: Suppliers & Technology: The ease of doing business
Suppliers & Technology: The ease of doing business The frictionless, fast, market leading way to trade C&C Group 54
Slide 55: PROOF Insight
fo) PROOF Insight C&C group owned, independent voice of Drinks Industry insight C&C Group Support Sales Growth & Commercialise Customer Retention Data & Intelligence Support Brand Growth & attract Brand Partners i Y C&C Group & partner brands n Y 34 party brand owners, operators & investors 55
Slide 56: Our network
Our network Freeing up latent capacity C&C Group 56
Slide 57: Growth strategy
Growth strategy 1. The market leading system 2. Good to great 3. Room to grow Strength a C&C Group 57
Slide 58: Slide 58
Slide 59: Delivering to a better world
. | DELIVERING TO A BETTER WORLD i) Supporting our Colleagues C&C Group 59
Slide 60: Brands rooted in sustainability
Brands rooted in sustainability 9 co) Sustainable sourcing * our own 165 acre orchard in Clonmel / ti 100% electricity from renewable energy sources + including the largest rooftop solar power farm in Ireland > C02 self sufficient 441 / + Carbon capture self sufficient Plastics reduction + 100M plas
Slide 61: Brands rooted in sustainability
Brands rooted in sustainability Sourced in Scotland * 100% Scottish barley and fresh water from Loch Katrine <=) ‘Rebrewable’ Energy + 100% electricity used in Wellpark provided by renewable sources E85 ‘COBrew’ Carbon reduction tie + Carbon capture and C02 storage - c95% CO2 sufficient Out of Plast
Slide 62: We are reducing our carbon footprint
We are reducing our carbon footprint * 4% per annum over the next 3 years C&C Group Scope 1 & 2 Emissions (Market Based) Zero Waste Scotland Partnership Projects delivering 48M litres water reduction Alternative Fuels and Heat Reduction Projects SBTi approach aligned to Paris Agreement Reporting ali
Slide 63: Collaborating with our partners to reduce our carbon footprint
Collaborating with our partners to reduce our carbon footprint -8% 2025 * 3% per annum over the next 3 years C&C Group Scope 3 Emissions 95% of C&C Total Emissions Collaborating with 130 suppliers 67% of scope 3 emissions Science Based Supplier Engagement Target 2023 CDP Supply Chain Screening C&C a
Slide 64: Sustainably sourcing our products
Sustainably sourcing our products @ Making positive sourcing choices x + FY 2022 CDP Supply Chain Screening Programme > 880 hectares cultivated biodynamically + 70% currently certified / 600 hectares sulphite free ay Organic farming 2 + 40 partnerships and 1,600 hectares Bee friendly + Over 800 hect
Slide 65: Supporting our communities
Supporting our communities AN Three year partnership with the Big Issue Foundation + aligned to our key community focuses A commitment to help make a difference + a meaningful partnership Immersion & Education * Supporting vendors and initiatives a) Employment Pathways * getting people back to work
Slide 66: Supporting our colleagues
Supporting our colleagues @ &) Health & Safety * we never compromise on safety Mental health & wellbeing * easy access to help, support and advice Inclusion & diversity + acommitment to building a more diverse business Employee Engagement + Increasing participation and taking action on feedback Resp
Slide 67: Delivering to a better world
. | DELIVERING TO A BETTER WORLD i) Supporting our Colleagues C&C Group 67
Slide 68: Executive Summary
‘Executive OF
Slide 69: Summary and Investment Thesis
Summary and Investment Thesis ~ Strong core brands Unrivalled distribution network [ID Lean and agile organisation Credible sustainability strategy and plan Financial strength li € \ Ear) @ yee Clear growth opportunities Driving revenue growth and margin expansion Medium-term targets v Distribution
Slide 70: Thank you
Slide 71: Financial Appendix
Financial Appendix C&C Group
Slide 72: Summary of FY2022 financial outcome
Summary of FY2022 financial outcome £m (except per share items) Fy2022--FY2021. «= FY2020.-—«s vs FY2021_ vs FY2020 3 | Net revenue” 1,438.1 765.8 1,753.0 88% -18% 5 Adjusted EBITDA 2) 79.7 (31.7) 155.9 -351% -49% i Operating profit/(loss) ‘2 '? 47.9 (63.6) 122.7 175% -61% 8 | Operating margin“) 3.3
Slide 73: FY2022 Net revenue
FY2022 Net revenue Recovery driven by easing of restrictions 591.3 (7.0) s 31.1 S § 28.9 29.4 24.8 27 £ 736.9 765.8 iT) ov n FY2021 Currency FY2021CC_—_Branded 101 Distribution 101 Co-pack/other Branded GB. Distribution GB Co-pack/other 101 GB 547.6 (7.4) ss ae 29 7658 seg 752 i oo & — — ae o - oO a
Slide 74: FY2022 Net revenue at 82% of pre COVID-19 FY2020 levels
FY2022 Net revenue was at 82% of pre COVID-19 FY2020 levels — 33.7 (23.7) 18.6 05 (43.4) s E — w= —— (270.0) < 1,753.0 oO 1,719.3 iy ag 1,438.1 n FY2020 Currency FY2020 CC Branded IO! Distribution 10! Co-pack/other Branded GB Distribution GB Co-pack/other FY2022 1o1 GB 33.7 (4.6) (49.3) (242.8) 1,71
Slide 75: FY2022 Net revenue for core brands
FY2022 Net revenue for core brands Recovery driving 40% growth in our core brand net revenue =z "COU = 3.1. FY2021CC =‘ Tennents volume Tennents Bulmers volume Bulmers Magners volume Magners FY2022 price/mix price/mix price/mix C&C Group 75
Slide 76: Net debt for FY2022
Net debt for FY2022 Proceeds from C&C Group em Net proceeds Non-cash issue exercise of share Feb 21 Free cash flow Rights issue Sale of business Lease liabilities investments Translation Feb 22 12.9 Ea = (20.0) (7.0) (271.3) Net debt/EBITDA 3.4x in (441.9) 18.2 76
Slide 77: FY2022 Exceptionals
FY2022 Exceptionals: Acredit of €8.9m driven by write back of COVID-19 provisions i€ém Operating costs COVID-19 Restructuring costs Impairment of equity accounted investment Reversal of revaluation/(impairment) of property, plant & equipment Rights issue Other Operating profit/(loss) exceptional ite
Slide 78: Segmental history recut
Segmental history recut Previous Segmental pce evo | evzot9 | v2020 | rv2021 | F202 | Net revenue 302.5 317.6 341.8 217.4 292.5 Operating Profit 40.6 43.3 45.9 (8.3) 215 Operating Margin 13.4% 13.6% 13.4% NM 7A% [ireland rvz0rs | evzot9 | v20z0 | rv2021 | Fy2022 | Net revenue 216.5 221.0 228.9 167.4
Slide 79: FY2022 Segmental Analysis
FY2022 Segmental Analysis €m Great Britain €m Ireland Constant currency* FY2022 FY2021__Change % Constant currency* FY2022 FY2021 Change % Net revenue 1,213.8 598.4 102.8% Net revenue 2243 167.4 34.0% of which Branded 170.1 139.0 22.4% of which Branded 78.3 48.9 60.1% = Price / mix impact 10.0% - Pr