C&c Group Plc · LSE:CCR
C&c — H1 2011 Earnings Presentation
35 slides from C&c's earnings presentation, October 2010
Slide 1: C&C Group plc 2010/11 First Half Results
C&C Groupp plc p 2010/11 First Half Results October 2010
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any shares or other securities of C&C Group plc (the "Company"). The presentation contains forward-looking statements, including statements about the Company's intentions,
Slide 3: 2010/11 H1 Presentation Agenda
2010/11 H1 | Presentation Agenda 1 Performance Overview 1. 2. Financial Review & Outlook 3. Segmental Review 4. Q&A C&C Group plc Slide 3
Slide 4: 2010/11 Objectives
2010/11 Objectives Corporate & Financial Objectives | 2010/11 ¾ Continue to build on momentum of Magners in GB ¾ Protect Bulmers earnings position in Ireland ¾ Integrate and deliver synergies from acquired businesses ¾ Lay foundation for international development of cider ¾ Capital p structure and f
Slide 5: First Half Performance Overview
2010/11 First Half | Performance Overview - Constant Currency Volumes H1 H1 Change ¾ Magners cider volumes in growth at 1.6% khl 2011 2010 % Magners GB returned to growth at 0.7% Magners export volumes +34.4% Bulmers 296 307 (3.4%) Magners 567 558 +1.6% ¾ Net revenue increased 73.0% to €305.5m and o
Slide 6: First Half Business Drivers
2010/11 First Half | Business Drivers Corporate Disposal of Spirits & Liqueurs C Completion l ti off business b i & IT systems t i t integration ti On track to deliver €8m of synergies in 2010/11 Ireland New pricing on pint bottle and draught L Launch h off Bulmers B l B Berry andd new advertising d
Slide 7: First Half Business Overview
2010/11 First Half | Business Overview Volume Operating 2% profit 7% 10% 7% 14% 16% 42% 34% 3% 2% 3% 2% 29% 29% Bulmers ROI Magners GB Magners NI Magners ROW Tennent's Gaymers & other ciders Third party brands Bulmers and Magners represent 30% of C&C volumes and 77% of operating profit Note: Operati
Slide 8: 2009/10 Performance Overview - Republic of Ireland Cider
2009/10 Performance Overview - Republic of Ireland | Cider LAD market growth driven by off-trade lager and promotional activity around the World Cup beer Source: ACNielsen Data to Aug 2010 C&C Group plc Slide 8
Slide 9: 2009/10 Performance Overview - Great Britain Cider
2009/10 Performance Overview - Great Britain | Cider Magners’ recovery to MAT growth of 1% at August 2010 – continue to target growth in line with the market by the year year-end end Source: ACNielsen & CGA Data to 7/8/2010 C&C Group plc Slide 9
Slide 10: 2009/10 Performance Overview - Scotland Lager
2009/10 Performance Overview - Scotland | Lager Tennent’s challenged by low value position for retailer Source: ACNielsen & CGA Data to 7/8/2010 C&C Group plc Slide 10
Slide 11: 2009/10 Performance Overview - Scotland On-Trade Lager
2009/10 Performance Overview - Scotland | On On-Trade Trade Lager Tennent’s continues to outperform Source: ACNielsen & CGA Data to 7/8/2010 C&C Group plc Slide 11
Slide 12: Performance Review
Performance Review ¾ Core markets of Ireland and the UK remain unpredictable and challenging ¾ UK cider category remains in growth and Magners has returned to modest volume growth ¾ Successful integration of Tennent’s and Gaymers and a good first half performance for both businesses ¾ Cider ROW star
Slide 13: H1 Financial Review
2010/11 H1 Financial Review C&C Group plc Slide 13
Slide 14: H1 Financial Summary
2010/11 H1 | Financial Summary - Constant Currency ¾ Gross revenue increased by 106.7% to €451.6m ¾ Net N t revenue increased i d by b 73.0% 73 0% to t €305.5m €305 5 ¾ Original cider net revenue (excluding acquisitions) declined by 5.3% to €144.3m ¾ Operating profit increased by 29.4% to €63.4m (ex
Slide 15: H1 2010/11 Income Statement
H1 2010/11 Income Statement - After exceptional items H1 2010/11 H1 2009/10 Change Change €m €m C Const. currency Net revenue 305.5 181.4 +68.4% +73.0% Operating p g costs ((246.0)) ((126.7)) +94.2% +96.2% Operating profit 59.5 54.7 +8.8% +16.2% Net finance charges (4.8) (2.6) +84.6% - Profit before
Slide 16: H1 Revenue Performance
2010/11 H1 Revenue Performance - Net revenue €m +82.0% 82.0% €305.5m €181.4m (0.3%) (4.3%) (2.9%) (6.1%) €156.7m Price/mix and currency are the main drivers for a decline in original cider sales C&C Group plc Slide 16
Slide 17: H1 Operating Profit Performance
2010/11 H1 Operating Profit Performance - Performance Drivers €m +29.7% €63.4m €52.5m (0.8%) (15.4%) (6.7%) +14.0% €47.8m Operating margin in the underlying business down to €47.8m largely due to currency and price/mix C&C Group plc Slide 17
Slide 18: Acquisitions Update
Acquisitions Update Synergy & Cost Reduction Benefits ¾ Integration g of the ABInBev business in Northern €m Ireland and launch of the new Tennent’s NI business unit ¾ Integration I t ti off Gaymers G sales l and d marketing k ti teams t €10m and launch of new Magners business unit in GB €8m ¾ Migra
Slide 19: H1 Cashflow
2010/11 H1 Cashflow - Strong Free Cashflow | Net Debt Eliminated €m €53.4m +€14.5m (€7.6m) +€26.1m (€0.5m) +€7.9m €93.8m €176.9 €20.8m net debt net cash The Group is in a net cash position at the half-year. One-off timing benefit to working capital of €31m ABInBev cash flow in the period C&C Group p
Slide 20: EPS and Dividend
EPS and Dividend Adjusted diluted EPS – continuing operations (€c) 13.9c (0.4c) 13.5c (0.4c) 4.8c (1.4c) (1.1c) 15.4c 2010/11 H1 Dividend ¾ Interim dividend of 3.3c ¾ 10% increase on prior year EPS in the underlying C&C business was in line with last year. Acquisitions compensated for the negative i
Slide 21: Managing Business Risk
Managing Business Risk ¾ Pension ¾ Counter-party risk ¾ Long-term supply arrangements ¾ Hedging C&C Group plc Slide 21
Slide 22: Summary & Outlook
Summary & Outlook ¾ The Group’s brands are in good health ¾ Development of Magners internationally is beginning to provide some protection against the current market challenges of Ireland ¾ C&C confident of delivering market consensus for operating profit in the range of €102-€106m for the 2010/11 f
Slide 23: H1 Segmental Overview
2010/11 H1 Segmental Overview C&C Group plc Slide 23
Slide 24: H1 Business Segments - Cider GB
2010/11 H1 Business Segments - Cider GB | Constant Currency Magners H1 ‘11 H1 ’10 Change Magners Net Revenue Const Curr. Cider GB Net revenue €m 67.2 71.3 (5.8%) Cider ROI Operating Profit €m 18.3 16.2 +13.0% Acquisitions Operating Margin % 27.2% 22.7% +4.5pts Volumes khl 454 451 +0.7% Cider ROW Cid
Slide 25: H1 Business Segments - Cider Republic of Ireland
2010/11 H1 Business Segments - Cider Republic of Ireland | Constant Currency Cider ROI H1 ‘11 H1 ’10 Change Net Revenue Const Curr. Cider GB Net revenue €m 58.1 63.2 (8.1%) Cider ROI Operating Profit €m 27.8 30.4 (8.6%) Acquisitions Operating Margin % 47.8% 48.1% -0.3pts Volumes Cider ROW khl 296 30
Slide 26: H1 Business Segments - Acquisitions
2010/11 H1 Business Segments - Acquisitions Acquisitions H1 ’11 H1 ’11 H1 ’11 H1 ’11 H1 ’11 Total Acquisitions Gaymers Total Tennents Distribution Tennents Brand Cider GB Net revenue €m 148.7 51.8 96.4 36.8 59.6 Cider ROI Operating Profit € €m 15 6 15.6 30 3.0 12 6 12.6 22 2.2 10 4 10.4 Acquisitions
Slide 27: H1 Business Segments - Cider Rest of World
2010/11 H1 Business Segments - Cider Rest of World | Constant Currency Cider ROW H1 ‘11 H1 ’10 Change Net Revenue Const Curr. Cider GB Net revenue €m 11.8 8.8 +34.0% Cider ROI Operating Profit €m 1.9 0.4 +375.0% Acquisitions Operating Margin % 16.1% 4.5% NM Cider ROW Volumes khl 67.9 50.5 +34.4% ¾ G
Slide 28: Summary
Summary ¾ Building a robust basis for growth in the largest cider market in the world ¾ Debt free and high cash generation provide flexibility ¾ Positioned well to grow business in tough conditions ¾ The start of international expansion p C&C Group plc Slide 28
Slide 29: Appendix: C&C Group plc 2010/11 Calendar
Appendix C&C Group plc | 2010/11 Calendar Scotland Investor Day 10 Nov-10 Q3 IMS 14 Jan-11 2010/11 FY R Results lt M 2010 May C&C Group plc Slide 29
Slide 30: C&C Business Overview
C&C Business Overview C&C Tennent’s ABI distribution rights Gaymer Cider Co. Other Assets • Wellpark brewery Scotland • Advances to customers • Tennent’s wholesale Non exclusive on-trade Non-exclusive on trade • 3 year contract brewing distribution rights agreement • Pub loan book h Northern Ireland
Slide 31: Risk Factors
Risk Factors ¾ Integration risk ¾ Cider duty risk ¾ Exchange rate risk ¾ Deteriorating business conditions in core markets C&C Group plc Slide 31
Slide 32: Segmental Analysis - Continuing Businesses
Segmental Analysis | Continuing Businesses - Constant Currency Net Revenue €m H1 2010/11 H1 2009/10 Change Cider ROI 58.1 63.2 (8%) Cider NI 7.2 9.1 (21%) Cider GB 119.0 71.3 +67% Cider RoW 11.8 8.8 +34% Tennent's GB 46.1 - - Tennent's IoI 13.5 - - Third Partyy 49.8 24.2 +106% Total continuing 305.5
Slide 33: H1 Cashflow
2010/11 H1 Cashflow H1 2010/11 H1 2009/10 Change €m €m Operating profit 67.9 57.4 +18% Depreciation 10.9 6.9 +58% EBITDA 78.8 64.3 +23%% Net finance charges / taxation (7.5) (7.0) +7% Change in working capital 38.8 12.7 +206% Exceptional items (4.5) (12.4) (64%) Operating cash flow 105.6 57.6 +83% %
Slide 34: Balance Sheet & Pension
Balance Sheet & Pension H1 2010/11 €m Net debt* at 28 February, 2010 364.9 Net Debt to EBITDA 2.8x Free cash flow in period (93.8) Disposals (299.0) Other 3.2 Net cash* at 31 August, 2010 24.7 Net Debt to EBITDA N/A Pension deficit at 28 February, 2010** 21.2 Pension deficit at 31 August, 2010** 49.
Slide 35: www.candcgroupplc.com
www.candcgroupplc.com C&C Group plc Block 71 The Plaza, Parkwest Business Park, Dublin 12 Tel: +353 1 616 1100