C&C Group PLC · LSE:CCR
C&C — Deutsche Bank Conference June 2008
39 slides from C&C's conference presentation, June 2008
Slide 1: C&C Group plc Deutsche Bank Conference
C&C Group plc Deutsche Bank Conference ISE | GCC.I Paris | June, 2008 C&C Group plc | Slide 1
Slide 2: Presentation Agenda
Presentation Agenda ¾ Overview ¾ 2007/8 Review ¾ Market & Brand Update ¾ Strategy & Outlook ¾ Q&A C&C Group plc | Slide 2
Slide 3: Overview
Overview ¾ Branded beverages Group ¾ Primary Divisions → Cider → Spirits & Liqueurs ¾ Listed in Dublin & London ¾ Market cap. € 1.6 billion C&C Group plc | Slide 3
Slide 4: Overview | Operating Profit Profile
Overview | 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 Group plc | Slide 4
Slide 5: 2007/8 Review
2007/8 Review C&C Group plc | Slide 5
Slide 6: 2007/8 Financial Review
2007/8 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 const
Slide 7: 2007/8 Operating Review
2007/8 Operating Review Strategic Developments ¾ Completed disposal of Soft drinks division ¾ Commenced test marketing of Magners in two European countries C&C Group plc | Slide 7
Slide 8: 2007/8 Operating Review
2007/8 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 Group plc | Slide 8
Slide 9: Market & Brand Review
Market & Brand Review C&C Group plc | Slide 9
Slide 10: 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 11: 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 Group plc | Slide 11
Slide 12: 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 13: 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 Group plc | Slide 13
Slide 14: 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 15: GB Off-Trade
GB Off-Trade C&C Group plc | Slide 15
Slide 16: 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 17: 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 Group plc | Slide 17
Slide 18: 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 Gr
Slide 19: Strategy & Outlook
Strategy & Outlook C&C Group plc | Slide 19
Slide 20: 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 Group plc | Slide 20
Slide 21: What has changed from 2007/8
What has changed from 2007/8 Business Recovery Initiatives ¾ Implemented revised Management and Organisational structure ¾ Strengthened Management Structure in GB ¾ Realigned cost structure to volume base ¾ Launched a series of marketing initiatives for Magners in GB C&C Group plc | Slide 21
Slide 22: GB Cider Strategy
GB Cider Strategy ¾ Core Strategy Unchanged ¾ Sharper Competitive Response ¾ Launch of draught Magners C&C Group plc | Slide 22
Slide 23: 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 24: 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 25: 2008/9 Trading
2008/9 Trading ¾ Weak Macro Environment ¾ Resumption of growth Q2 onwards ¾ Guidance for year unchanged C&C Group plc | Slide 25
Slide 26: Q&A
Q&A 2008/9 IR Calendar ¾ C&C Group AGM & IMS July, 2008 C&C Group plc | Slide 26
Slide 27: Appendix
Appendix C&C Group plc | Slide 27
Slide 28: Republic of Ireland Cider Category
Republic of Ireland Cider Category % 14 Market Share of Irish LAD Market 12 10 8 6 4 2 0 98 01 02 90 94 03 04 92 96 00 05 07 06 19 20 20 20 19 19 19 19 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 Group p
Slide 29: 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 Group plc | Slide 29
Slide 30: 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 Nov 06 Jun 07 Nov 07 Jul 06 Aug 06 Jan 07 Jul 07 Aug 07 Jan 08 Feb 07 Mar 07 May 06 Sep 06 Apr 07 Oct 06 Dec 06 May 07 Sep 07 Oct 07 Dec 07 Source: Nielsen (Packaged Cider) C&C Group
Slide 31: 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 Group plc | Slide 31
Slide 32: GB Off Trade
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 Group plc | Slide 32
Slide 33: 2007/8 FY | Financial Summary
2007/8 FY | Financial Summary 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 charges (14
Slide 34: 2007/8 FY | Cider Division
2007/8 FY | Cider Division 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 c
Slide 35: 2007/8 FY | Spirits & Liqueurs Division
2007/8 FY | Spirits & Liqueurs Division 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 Group plc | Slide 35
Slide 36: 2007/8 FY | Exceptional Items
2007/8 FY | 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 Group plc | Slide 36
Slide 37: 2007/8 FY | Cash Flow
2007/8 FY | 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)
Slide 38: 2007/8 FY | Balance Sheet
2007/8 FY | 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 Group plc | Slide 38
Slide 39: 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 Group plc | Slide 39