C&c Group Plc · LSE:CCR
C&c — FY2023 Earnings Presentation
30 slides from C&c's earnings presentation, May 2023
Slide 1: FY2023 Results Presentation
FY2023 Results Presentation May ’23
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: Key takeaways
Key takeaways C&C Group FY2023 Financial FY2023 Strategic FY2024 Outlook Highlights Highlights Leverage 1.3x (1) Win in cider Underlying business healthy Strong Balance Sheet position Bulmers ROI off-trade market share Performance in line with expectations Robust cash generation +5.8ppts (3) Solid b
Slide 4: ERP investment rationale
ERP investment rationale Platform for future efficiencies C&C Group Enhanced Security Consolidate & a a standardise processes and Support Future Proof Improve automation a & scalable a Platform for a Better visibility a digital commerce and control Significantly more complex and disruptive than orig
Slide 5: Market trends & developments
C&C Group Market trends & developments 5
Slide 6: GB Category and Outlet typology shifts
GB Category and Outlet typology shifts C&C Group Beer & Cider finish FY2023 strongly as Spirits and Wine decline. IFT & leased in structural decline, Managed Operators increasing share. C&C GB is the #1 supplier for Managed Operators Volume change vs 1ya On Trade Outlets GB & IOI 130,000 128,675 -15
Slide 7: Progress on Strategic Objectives
Progress on Strategic Objectives
Slide 8: Winning in cider
Winning in cider Bulmers in growth with Magners hitting record share figures during Christmas 2022, and further strong C&C Group volume growth in Orchard Pig. Supported by growing brand investment. C&C Ireland cider vol share* 66.0% 64.0% 62.0% ROI off-trade ROI on-trade a YOY+5.8%pts YOY+0.9%pts 60
Slide 9: Growth in premium beer – on-trade volumes +44%
Growth in premium beer – on-trade volumes+44% Establishing our premium portfolio in both the on-trade and off-trade, growing market share, distribution and rate of sale with increased brand investment C&C Group Bulmers Ireland Second largest off-trade Premium Lager supplier a FY23 distribution (volu
Slide 10: Scotland System strength provides platform to leverage premium beer growth
Scotland System strength provides platform to leverage premium beer growth C&C Group • Tennent’s volume share of total Scotland beer 29.3%, up 1.92ppts yoy • Nearest competitor brand share, 7.1% • Heverlee on-trade volume share greater than global a brands Amstel, Madri and Budweiser • Innis & Gunn*
Slide 11: Investment in continuous improvement
Investment in continuous improvement short term turbulence, long-term improvement C&C Group Matthew Clark Bibendum On Time In Full (OTIF) from cyber attack to now, a track record of continuous improvement System a disruption 92% a GB OTIF January 23 83.7a% GB OTIF April 23 43% a GB OTIF February 21
Slide 12: Financial Performance
Financial Performance
Slide 13: FY2023: Outcome impacted by challenging environment in Q4
FY2023: Outcome impacted by challenging environment in Q4 C&C Group €1.7bn €84.1m €116.6m Net Revenue Operating profit Adjusted EBITDA +18.4% vs FY2022(1) +75.6% vs FY2022(1) +46.7% vs FY2022(1) 5.0% €75.3m €152.7m Operating Margins Free Cash flow Net Debt(3) 3.4% in FY2022(1) €28.4m in FY2022(2) €2
Slide 14: FY2023: Net revenue growth +18%
FY2023: Net revenue growth +18% C&C Group GB net revenues +17% driven by distribution with Ireland +24%. +20% +14% +22% +36% Branded net revenues +21%, price/mix delivering 18ppts of the growth Distribution net revenues +20% with price/mix delivering 14ppts of the growth 14 * On a constant currency
Slide 15: FY2023: Operating profit increase +76%
FY2023: Operating profit increase +76% GB operating profit +93%, driven by distribution with Ireland +49% driven by branded. C&C Group +379% +55% +33% Branded operating profit +20% with benefit of MUP in Ireland net against increased brand investment of €11m year-on-year. Distribution operating prof
Slide 16: Net debt: Strong position – net debt/EBITDA 1.3x
Net debt: Strong position – net debt/EBITDA 1.3x* Our inherently strong cash generating characteristics C&C Group delivered free cash flow conversion of 65%. Debt refinancing completed and now extends out to FY2028 * Net Debt (post IFRS 16 lease liabilities) / Adjusted EBITDA which is earnings befor
Slide 17: Underlying Business Characteristics
C&C Group Underlying Business Characteristics 17
Slide 18: Underlying Business Characteristics
Underlying Business Characteristics C&C Group BRANDS DISTRIBUTION SYSTEM SUSTAINABILITY/ESG MSCI ‘AA’ rating Reducing carbon footprint Industry leading climate credentials Steady state operating margin target of 4% (achieved in H1 FY2023) FY23 Return on Capital Employed >25% for Distribution busines
Slide 19: Financial Appendix
Financial Appendix
Slide 20: FY2023 financial outcome
FY2023 financial outcome C&C Group The Group has delivered robust net revenue growth and margin expansion despite challenging Q4 trading environment. • Net revenue of €1,689m, +18% vs FY2022 • Operating profit of €84.1m delivering margins of 5.0% • Increase in liquidity of €32m vs FY22. • Delivered
Slide 21: GB segment
GB segment*: C&C Group *Adjusted for constant currency and pre exceptional items. 21
Slide 22: Ireland segment
Ireland segment*: C&C Group *Adjusted for constant currency and pre exceptional items. 22
Slide 23: Brand Investment delivering volume growth
Brand Investment delivering volume growth C&C Group Investing for future growth Branded volume Market share growth vs FY22 growth DBM Investment +4% +1.8 ppts (1) 30.0 10% 10% DBM as % of Branded Revenue 28.0 26.0 9% €29m +9% +5.7 ppts (2) DBM Investment (€'m) 24.0 8% 22.0 20.0 6% 7% a +25% -0.0 ppt
Slide 24: FY2023 Net revenue growth of 20% in our core brands
FY2023 Net revenue growth of 20% in our core brands C&C Group 11.8 241.0 13.6 (3.2) 4.0 €'m 9.7 3.6 201.6 FY22 CC* Tennents volume Tennents Bulmers volume Bulmers price/mix Magners volume Magners FY23 price/mix price/mix *Adjusted for constant currency 24
Slide 25: FY2023: Overall Operating profit Margin improved to 5.0% from 3.4%
FY2023: Overall Operating profit Margin improved to 5.0% from 3.4% C&C Group 14.2% 3.1% Branded margin Distribution margin 15.0% 15.0% 13.0% 10.0% 11.0% 9.0% 14.2% 14.2% 5.0% 3.1% 7.0% 1.1% 5.0% 0.0% FY22 FY23 FY22 FY23 Op. Profit Margin Op. Profit Margin Branded margins impacted by inflationary cos
Slide 26: Total Return on Capital Employed higher from Distribution
Total Return on Capital Employed “ROCE” higher from Distribution C&C Group Group ROCE(1) Distribution ROCE (1) 28% 28% 12% 8% 9% 5% FY20 FY22 FY 23 FY20 FY22 FY 23 ROCE from Distribution business at 28% is significantly higher than total Group ROCE at 8% (1) See slide 27 for workings 26
Slide 27: ROCE Calculation – ROCE from Distribution significantly higher than branded and total
ROCE Calculation – ROCE from Distribution business is significantly higher than branded and total Group ROCE C&C Group 27
Slide 28: FY2023: Robust cash generation
FY2023: Robust cash generation Our inherently strong cash generating characteristics delivered free cash flow conversion of 65%* C&C Group €116.6m €1.8m 65% FCF* Conversion -€3.6m €75.3m -€15.2m €1.9m -€14.2m -€12.0m Adjusted EBITDA Working Capital Advances to Net capital Net finance costs pre Taxes
Slide 29: Sustainability
Sustainability We continue to deliver on our sustainability commitments C&C Group Carbon footprint • Clonmel - largest rooftop solar power farm in Ireland. • €1.4m investment in a new Heat Pump project at Clonmel, reducing the carbon footprint of the site by c.40%. • Group’s greenhouse gas reduction
Slide 30: Input Costs
Input Costs Challenging inflationary environment C&C Group Total cost of sales Manufacturing inputs costs Manufacturing Sugar/Glucose 8% input cost (c.10%) • c.10% of cost of sales is Malt 7% manufacturing Gas 7% Glass 9% • Prices fixed where possible for FY2024 Apples 8% Other cost Card 8% • 27%+ y