C&c Group Plc · LSE:CCR
C&c — FY2007/8 Earnings Presentation
40 slides from C&c's earnings presentation, May 2008
Slide 1: C&C Group plc 2007/8 FY Results
C&C Group plc 2007/8 FY Results ISE | GCC.I May, 2008 C&C FY Results | Slide 1
Slide 2: Presentation Agenda
Presentation Agenda ¾ Summary ¾ Financial Review ¾ Market & Brand Review ¾ Strategy & Outlook ¾ Q&A C&C FY Results | Slide 2
Slide 3: Financial Review
Financial Review Amount Change Revenue (€m) 679.0 (6.9%) Operating profit (€m) 125.2 (36.6%) Operating margin 18.4% (8.7 pts) Adjusted EPS (cent) 32.2 (41.4%) Dividend per Share (cent) 27.0 unch Note: Figures are for continuing business excluding exceptional items and comparisons are at constant exc
Slide 4: Operating Review: Strategic Developments
Operating Review Strategic Developments ¾ Completed disposal of Soft drinks division ¾ Commenced test marketing of Magners in two European countries C&C FY Results | Slide 4
Slide 5: Operating Review: Operations
Operating Review Operations ¾ Cider volumes (11%) ¾ Tullamore Dew volume +22% ¾ Marketing Investment in Cider + 41% ¾ Completed Cider Manufacturing Capacity Expansion C&C FY Results | Slide 5
Slide 6: Operating Review: Business Recovery
Operating Review Business Recovery ¾ Implemented revised Management and Organisational structure ¾ Strengthened Management Structure in GB ¾ Realigned cost structure to volume base ¾ Launched Magners Draught in GB ¾ Launched a series of other marketing initiatives for Magners in GB C&C FY Results |
Slide 7: Financial Overview
Financial Overview C&C FY Results | Slide 7
Slide 8: 2007/8 Financial Summary - Earnings
2007/8 Financial Summary - Earnings Continuing Operations excluding exceptional items Feb 08 Feb 07 Growth €m €m % Revenue 679.0 738.5 (8.1%) Marketing 92.2 68.0 +35.6% Marketing % of Revenue 13.6% 9.2% 4.4% Operating Profit 125.2 199.6 (37.3%) Operating Profit Margin 18.4% 27.0% (8.6) Finance charg
Slide 9: Operating Profit Profile
Operating Profit Profile Operating Profit By Division Operating Profit by Region ROI Cider 51% 86% (42%) (84%) S&L (8%) 13% Other 6% UK Other 43% (11%) 1% (8%) (47%) ( ) Year Ago C&C FY Results | Slide 9
Slide 10: Cider
Cider Feb 2008 Feb 2007 (i) Growth €m €m % Revenue - ROI 194.2 199.7 (2.8%) - International 276.3 312.8 (11.7%) 470.5 512.5 (8.2%) Marketing 67.9 47.5 42.9% Marketing /Revenue 14.4% 9.3% 5.1pts Operating Profit 107.5 177.7 (39.5%) Operating Margin 22.8% 34.7% (11.9) pts (i) At constant currency C&C
Slide 11: Spirits & Liqueurs
Spirits & Liqueurs Feb 08 Feb 07 (i) Growth €m €m % Revenue 87.5 77.9 12.3% Marketing 22.6 17.8 27.0% Marketing/Revenue 25.8% 22.8% 3.0pts Operating Profit 15.8 16.7 (5.4%) Operating Margin 18.1% 21.4% (3.3pts) (i) At constant currency C&C FY Results | Slide 11
Slide 12: Exceptional Items
Exceptional Items €m Net profit on disposal of Soft Drinks 137.4 Non Recurring f/x gain 9.1 Reorganisation (15.6) Tax 0.7 Total 131.6 C&C FY Results | Slide 12
Slide 13: Cash Flow
Cash Flow Feb 2008 Feb 2007 % €m €m Change EBITDA 151.1 237.8 (36.5%) Capital expenditure (net) (102.9) (79.4) Working capital 12.2 (47.3) Other (1.9) (1.7) Operating cash flow (OCF) 58.5 109.4 (46.5%) OCF/EBITDA 39% 46% Exceptional items (paid)/rec’d (4.7) Finance Charges (12.6) (13.9) Tax (9.2) (2
Slide 14: Balance Sheet
Balance Sheet €m Debt/EBITDA Net debt at 1st March, 2007 305.4(i) 1.3 Free cash flow in period (32.0) Dividends Paid 81.1 Own shares acquired 139.9 Net disposal proceeds (236.5) Other (1.7) Net debt at 29 February, 2008 256.2 1.7 (i) Excludes pension deficit C&C FY Results | Slide 14
Slide 15: Foreign Exchange
Foreign Exchange Contracts in place at 29 February 2008 Currency Amount Rate £ Stg Y/E Feb 2009 £112m 0.69 Y/E Feb 2010 £36m 0.73 US$ Y/E Feb 2009 $24m 1.41 Can $ Y/E Feb 2009 $6m 1.45 C&C FY Results | Slide 15
Slide 16: Market & Brand Review
Market & Brand Review C&C FY Results | Slide 16
Slide 17: Irish LAD Market
Irish LAD Market Market Trends MAT MAT Feb 07 Feb 08 Overall Market (i) 0.4% (4.5%) On-Trade (ii) (2.3%) (3.4%) Off-Trade (ii) 14.5% 5.9% Bulmers Market Share MAT Change Feb 08 on Feb 07 Overall (i) 10.6% +0.2 On-Trade (ii) 10.7% +0.1 Off-Trade (ii) 8.1% +0.2 (i) Rev. Commrs/C&C Feb‘ 08 (ii) Nielsen
Slide 18: International Cider
International Cider Overall ¾ Magners 62% share of branded cider ¾ Market/Volume profile unchanged from February 07 Magners Volumes GB 85% NI 8% USA 3% Europe 4% C&C FY Results | Slide 18
Slide 19: International Cider | GB On-Trade
International Cider | GB On-Trade 6 mth period to Feb 06 Aug 06 Feb 07 Aug 07 Jan 08 (ii) LAD market growth (i) -2.6% -2.6% -3.0% -6.2% -8.9% Cider Share of lad 5.4% 7.0% 7.2% 8.2% 8.0% - Draught 4.6% 5.1% 4.7% 5.5% 5.6% - Packaged 0.8% 1.9% 2.5% 2.7% 2.4% Packaged share of Cider 15% 28% 34% 33% 30%
Slide 20: Magners GB | On-Trade Distribution
Magners GB | On-Trade Distribution 80 70 60 50 Total Managed Leased Independents 40 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Source: Nielsen (Liquid weighted max. distribution) C&C FY Results | Slide 20
Slide 21: Premium Cider | GB On-Trade
Premium Cider | GB On-Trade Share of LAD – On Trade (3 months rolling) 4.00% 3.00% 2.00% 1.00% Scotland Total GB 0.00% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07 07 07 07 07 07 08 ¾ Premium cat
Slide 22: GB Off-Trade
GB Off-Trade C&C FY Results | Slide 22
Slide 23: Magners GB | Off-Trade
Magners GB | Off-Trade 6 month period to Aug 06 Feb 07 Aug 07 Feb 08 LAD Market growth (i) 2.5% 0.6% 5.1% Cider share of LAD 13.2% 14.2% 15.7% 15.9% Premium share of Cider 6.5% 10% 14% 14.5% Magners share of: Cider 4.9% 7.0% 8.3% 7.8% : Premium Cider 74.9% 70.1% 58.7% 53.9% Magners Growth 61.0% Magn
Slide 24: Magners European Test Markets
Magners European Test Markets Test Markets ¾ Munich ¾ Barcelona Findings (common to both) ¾ Extensive range of learnings ¾ Positives on consumer response ¾ Challenges in distribution ¾ Test in 08/09 to calibrate potential C&C FY Results | Slide 24
Slide 25: Spirits & Liqueurs
Spirits & Liqueurs ¾ Tullamore Dew maintaining strong growth Brand Shipment Depletions Growth Trend (i) across a range of markets Tullamore Dew 22% 19% ¾ Carolans volume shortfall US market Carolans (7%) (4%) Frangelico (2%) 5% Total 4% 5% (i) depletions are sales by Distribution to retailers C&C FY
Slide 26: Strategy & Outlook
Strategy & Outlook C&C FY Results | Slide 26
Slide 27: Corporate Strategy
Corporate Strategy ¾ Steady growth of Cider in Irish market ¾ Fully exploit GB potential for premium cider ¾ Explore new markets for longer term growth ¾ Enhance value of Spirits & Liqueurs portfolio C&C FY Results | Slide 27
Slide 28: GB Cider Strategy
GB Cider Strategy ¾ Core Strategy Unchanged ¾ Sharper Competitive Response ¾ Launch of draught Magners C&C FY Results | Slide 28
Slide 29: Cost/Structure
Cost/Structure ¾ Re-organisation – Streamlining organisation structure – Realigning cost structure to current sales volume base ¾ Reduce operating cost by €10 million - 2 point margin uplift C&C FY Results | Slide 29
Slide 30: Market Outlook 2008/9
Market Outlook 2008/9 ¾ GB Premium Cider category (on trade) to return to growth in 2008 ¾ Share improvement within LAD in Ireland “The objective for 2008/09 is to stabilise the Group’s financial and market performance, and, with the expected benefits of a streamlined organisation, cost reduction pr
Slide 31: Financial Outlook 2008/9
Financial Outlook 2008/9 ¾ Modest revenue growth in 2008/9 and improvement in operating margins forecast ¾ Cost reduction programme will contribute to an improved C&C performance in 2008/9 ¾ No impact from Sterling weakness in 2008/9 and $ impact limited ¾ Strong cash flow, low capex and strong bala
Slide 32: 2008/9 Trading to date
2008/9 Trading to date ¾ Weak Macro Environment ¾ Resumption of growth Q2 onwards ¾ Guidance for year unchanged C&C FY Results | Slide 32
Slide 33: Q&A / 2008/9 IR Calendar
Q&A 2008/9 IR Calendar ¾ C&C Group AGM July, 2008 C&C FY Results | Slide 33
Slide 34: Appendix
Appendix C&C FY Results | Slide 34
Slide 35: Republic of Ireland Cider Category
Republic of Ireland Cider Category % 14 Market Share of Irish LAD Market 12 10 8 6 4 2 0 90 92 94 96 98 00 01 02 03 04 05 06 07 19 19 19 19 19 20 20 20 20 20 20 20 20 Bulmers Cider Duty Doubled Other ciders Incl. Other C&C brands Source: Revenue Commissioners (Calendar Years) Smoking Ban C&C FY Resu
Slide 36: Magners Roll-out
Magners Roll-out ¾ NI Launch 1999 2 Scotland ¾ Glasgow Market Test (1) 2003 1 ¾ Scotland Launch (2) 2004 ¾ London Launch (3) 2005 3 London ¾ GB national roll-out (4) 2006 ¾ Barcelona & Munich Market Tests 2007 4 GB National Roll-out C&C FY Results | Slide 36
Slide 37: Premium Cider | GB On-Trade
Premium Cider | GB On-Trade Volume progression (3 months rolling) HL 300 Category Magners 250 200 150 100 50 0 Jun 06 Jun 07 Nov 06 Nov 07 Jul 06 Aug 06 Jan 07 Jul 07 Aug 07 Jan 08 Feb 07 Mar 07 May 06 Sep 06 Oct 06 Dec 06 Apr 07 May 07 Sep 07 Oct 07 Dec 07 Source: Nielsen (Packaged Cider) C&C FY Re
Slide 38: New Organisation Structure
New Organisation Structure CEO Company MD MD Commercial MD Marketing MD Supply MD Spirits CFO Secretary Magners GB Ireland & New Markets Chain & Liqueurs C&C FY Results | Slide 38
Slide 39: GB Off Trade Pricing
GB Off Trade Pricing Total LAD Feb 07 MAT Feb 08 MAT Total Cider Brand Strongbow HP Bulmers Magners 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Pricing in £ Stg C&C FY Results | Slide 39
Slide 40: C&C Group plc contact details
C&C Group plc P +353 1 616 1100 Kylemore Park F +353 1 616 1163 Dublin 10 E C&CGroup@kcapitalsource.com Ireland W www.candcgroupplc.ie C&C FY Results | Slide 40