C&C Group PLC · LSE:CCR
C&C — Investor Day (November 2012)
114 slides from C&C's investor day presentation, November 2012
Slide 1: C&C Group plc Investor Day November 2012
C&C Group plc Investor Day | November 2012
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: Welcome & Agenda
Welcome & Agenda 10.00 Presentations and Q&A 12.35 Prep for tour 13.00 Tour of Cider Mill 14.00 Lunch and cider tasting at The Cider House 15.30 Transfers to Bristol Airport & Gloucester Road Tube Station 3
Slide 4: Presentations
Presentations 1 Overview Stephen Glancey & Kenny Neison 2 Export Markets Joris Brams & Mark Boulos 3 Domestic Markets Sandra Mitchell & Michael Sloan 4 Shepton Mallet Business Paolo Mortarotti 5 Summary and Q&A Stephen Glancey 4
Slide 5: Presentations
Presentations 1 Overview Stephen Glancey & Kenny Neison 2 Export Markets Joris Brams & Mark Boulos 3 Domestic Markets Sandra Mitchell & Michael Sloan 4 Shepton Mallet Business Paolo Mortarotti 5 Summary and Q&A Stephen Glancey 5
Slide 6: Business Development Review
Business Development Review ● 2008-2012: Stabilise and Consolidate ● 2013-2015: Transform 6
Slide 7: 2008 to 2012: Challenging Domestic Environment
2008 to 2012: Challenging Domestic Environment ● Reduced consumer spend ● Increasing retailer power ● Pressure on pricing 7
Slide 8: 2008 to 2012: Solid Financial Performance
2008 to 2012: Solid Financial Performance FY09 FY131 CAGR EBIT (€m) 90.22 113.3 5.5% Adjusted EPS (c) 22.2 28.6 6.6% Net Debt (€m) 226.2 (130)3 N/A 1Bloomberg and sell-side estimates 2 Underlying; excludes €10.2m hedging gain 3 Pro-forma net cash position excluding impact of proposed acquisitions *S
Slide 9: 2008 to 2012: De-risking the Earnings Profile
2008 to 2012 : De-risking the Earnings Profile FY2009 | EBIT FY2013e | EBIT Third Party S&L 5% 17% Tennent's Cider ROI 24% 34% Cider ROI 49% Cider UK International 7% 34% Cider UK 29% Cider ROI Cider UK S&L Cider ROI Cider UK Source: Company data Source: Sell-side estimate 9
Slide 10: Business Development Review
Business Development Review ● 2008-2012: Stabilise and Consolidate ● 2013-2015: Transform through Internationalisaton …but room for further domestic consolidation as well 10
Slide 11: 2013 to 2015: Ireland - evolution through Gleesons
2013 to 2015: Ireland - evolution through Gleesons ● Changes business model ● Direct sales network, enhanced portfolio ● Multi-beverage platform ● Scope for additional agency brands Agency Brands 11
Slide 12: Gleesons: Transaction Overview
Gleesons: Transaction Overview ● Enterprise value €58 million ● Pro forma EBITDA of €10.2 million ● 5.7x 2012 EBITDA before synergies (4.5x post synergies of c. €3m) ● ROIC exceeds WACC in 2 years ● Immediately accretive ● Pro forma net debt to EBITDA ratio < 1.5x ● No impact on progressive dividend
Slide 13: Gleesons: A Resilient Model
Gleesons: A Resilient Model 2012 | Gross Profit Contribution €m 2010 to 2012 | Revenue 270 Manufacturing 260 30% 250 240 Wholesale 230 & Agency 45% 220 210 200 Wines & 190 Spirits 2010 2011 2012 25% Gross Profit Contribution 19% 19% 18% Source: Gleeson Group internal data Source: Gleeson Group inter
Slide 14: Gleesons: Value Creation Opportunities
Gleesons: Value Creation Opportunities ● Cost & revenue synergies ● Expand range of agency brands ● Evolve to ‘push’ model ● On-trade financing opportunities ● Export potential 14
Slide 15: 2013 to 2015: Consolidating in the UK
2013 to 2015: Consolidating in the UK ● Investing in existing brand assets – marketing – price – lending for distribution & throughput ● Funded by cost reduction ● Multi-beverage in the right markets 15
Slide 16: 2013 to 2015: International Growth Story
2013 to 2015: International Growth Story ● Accelerating growth in new markets ● Tennent’s export potential ● Acquisition strengthens US platform & brands 16
Slide 17: 2013 to 2015: International focus on the US
2013 to 2015: International focus on the US ● US$305m acquisition Vermont Hard Cider Company ● Premium craft cider player ● Woodchuck and Wyder’s cider ● 400 kHL cidery in Vermont ● National sales force 17
Slide 18: Vermont Hard Cider Company Why?
Vermont Hard Cider Company Why? ● US cider category trends & potential ● Great brands, great management, sustained growth of 25% pa ● Cultural fit ● Scarcity value ● Step change in international cider profile 18
Slide 19: Vermont Hard Cider Company: Ability to create value
Vermont Hard Cider Company: Ability to create value ● Share of accelerating category growth ● Filling the imported cider space ● Widened portfolio appeal ● Operational synergies (in due course) 19
Slide 20: C&C Strategy
C&C | Strategy Building a substantial, international cider-led LAD business through: Consolidation in core markets and Accelerated development of international markets 20
Slide 21: Business development Review: Summary
Business development Review: Summary ● 2008 to 2012 – delivering to plan ● Strong, multi-beverage platform in core markets ● International opportunity ● Positioned for performance and growth – Consolidate core markets – Accelerate development of international markets ● Strong Balance sheet 21
Slide 22: Presentations
Presentations 1 Overview Stephen Glancey & Kenny Neison 2 Export Markets Joris Brams & Mark Boulos 3 Domestic Markets Sandra Mitchell & Michael Sloan 4 Shepton Mallet Business Paolo Mortarotti 5 Summary and Q&A Stephen Glancey 22
Slide 23: Joris Brams
Joris Brams Managing Director - International
Slide 24: Developing International Markets
Developing International Markets FROM TO ● Small ● Relevant ● Seeing markets ● Being in markets ● USA East coast on-trade player ● Nationwide market leader ● Cider only ● Global cider & beer portfolio ● Pioneers ● Dedicated top team ● Low % of total profit ● Meaningful % of total profit 24
Slide 25: From strategy to execution
From strategy to execution … Create shareholder value by driving earnings growth – Target : 20% of group profit by FY16 “Irish Distribution Brand & Build Use local colonial agreements Portfolio relationships partners in route” Builders virgin territories Focus on : • Moosehead • Suntory • Rio • Inte
Slide 26: The team is growing
The team is growing … Joris Commercial Marketing Finance/M&A Ned Conor Ricardo Peter Anthony Jens Mark 45 FTE today to 170 FTE post VHCC 26
Slide 27: We are the places to be
We are the places to be … New 2012 Plan 2013 Source Canadean, C&C analysis 27
Slide 28: Track record so far
Track record so far Volume development (khl) Profit development (€m) 200 188 8 45 7 150 6 120 25 100 89 30 34 4 3 82 18 24 20 21 18 2 1 50 18 17 5 11 11 3 4 62 33 45 0 31 FY09 FY10 FY11 FY12 0 FY09 FY10 FY11 FY12 -2 USA Canada Australia Spain All other -3 -4 Source: C&C internal data Source: C&C int
Slide 29: What We Have Said Previously About Global Cider
What We Have Said Previously About Global Cider Global cider category growth forecasts (mhl) Cider vs. beer growth | 2006-11 and 2011-16 Source: Euromonitor Source: Euromonitor, HMC&E & C&C estimates 29
Slide 30: Global Cider Categories
Global Cider Categories Latest global cider category growth rates Market size (khl) and cider penetration Source: The Beer Institute (USA, L6M), AC Nielsen (Australia, L6M), IWSR (South Africa, CY11- Source C&C estimates, The Beer Institute (USA), IWSR/:LMA (Australia), IWSR (South Africa), 12), ACD
Slide 31: Our Performance So Far
Our Performance So Far C&C International 1H12 and 1H13 volume by region (growth vs. last year) 1H12 1H13 Source: C&C internal data 31
Slide 32: International at a glance
INTERNATIONAL at a glance C&C products worldwide Our products are available in over 43 countries 32
Slide 33: Mark Boulos
Mark Boulos Finance Director – International
Slide 34: Our Goals Driven By USA
Our Goals Driven By USA Volume growth Average per case price ($) (off-trade) Weighted distribution (off-trade) (off-trade) Source: AC Nielsen (w/e 4 Nov-12) Source: AC Nielsen (w/e 4 Nov-12) Source: AC Nielsen (w/e 4 Nov-12) 34
Slide 35: Video: Bret Williams
Video: Bret Williams 35
Slide 36: Bret Williams
Bret Williams President and CEO Vermont Hard Cider Company
Slide 37: Cider could become the next CRAFT
Cider could become the next CRAFT In 2011, the Woodchuck Brand was the 9th largest Craft Brand in the US. 1. Boston Beer Company 2. Sierra Nevada Brewing Company 3. New Belgium Brewing Company Inc. 4. Gambrinus Company Vermont Hard Cider Company 5. Deschutes Brewery 6. Matt Brewing Company 7. Bell’s
Slide 38: Hot Brand
Hot Brand… • Woodchuck received the Impact Hot Brand Award for the 8th time in 2011! (6th Consecutively) • VTHCC has received 15 Impact Hot Brand Awards in total 200 200 201 6 8 0 200 200 7 9 38
Slide 39: Woodchuck Brand Attributes
Woodchuck Brand Attributes ● Premium Craft Pricing ● Innovation – Limited Release – Private Reserve – Farmhouse ● Made in Vermont with local juice ● Naturally Gluten Free ● Available in 50 States ● Strong Brand Loyalty & Authenticity ● Vermont Brands translate across the country 39
Slide 40: We're Serious about Innovation
We’re Serious about Innovation “Innovation is not only our obligation…it’s our passion!” Private Reserve: • Artisanal Pricing • Higher Alcohol • Small Batch • Ground Breaking • Truly Unique • Case sales up 479% YTD* *Source: IRI Total US Food YTD w/e September 9, 2012 40
Slide 41: Innovation - Limited Release
Innovation - “Limited Release” 2012 Growth Delicately balanced with notes of maple syrup and brown sugar blended with fresh apple character. Slightly tart with a full, robust flavor followed by a rich taste reminiscent of New England blueberries. Handcrafted with cinnamon, nutmeg, and a hint of Amer
Slide 42: Focus
FOCUS Discovery Festivals & Samplings Displays Draft Ad Features and Fall Thematic College & Craft Accts Distribution AA, Liquor and Grocery 42
Slide 43: Why VTHCC Can Be Game Changing For C&C?
Why VTHCC Can Be Game Changing For C&C? 1 Great asset Category volumes (mhl) 5Y CAGR Base: 36% Market with significant Upside: 78% 2 potential 3 High quality earnings 4 Execution, execution, 0.3% 1% 3% 7% 10% execution LAD LAD LAD LAD LAD Source: C&C analysis and sell-side estimates 43
Slide 44: However, The USA Is Not Just About VTHCC
However, The USA Is Not Just About VTHCC… Syvb C&C US operations FY12 FY13 (excluding/pre-VTHCC) Brands 2 4 Employees (total) 15 32 Employees (of which sales) 11 24 Employees (of which chain focused) 0 2 States 30 50 Distributors 100 200 Warehouse hubs 0 7 44
Slide 45: Repositioning Hornsby's
Repositioning Hornsby’s MAGNERS | BULMERS) Payi/OF o> EWM lis 1/13 hy Oniginal
Slide 46: It Is Also Not Just About Cider
It Is Also Not Just About Cider... 100khl exported TENNENT’S in sight. 1H FY13 Tennent’s export volume split Tennent’s product range for export markets Source: C&C internal data 46
Slide 47: Video: Jens Gloeckner
Video: Jens Gloeckner
Slide 48: Our Goals
Our Goals Evolution of high-quality, growth earnings coming from C&C International FY12A EBIT split FY14E EBIT split FY16E EBIT split 7% 15% 20% 93% 85% 80% C&C International C&C International C&C International C&C - domestic C&C - domestic C&C - domestic Source: C&C internal data and sell-side esti
Slide 49: Presentations
Presentations 1 Overview Stephen Glancey & Kenny Neison 2 Export Markets Joris Brams 3 Domestic Markets Sandra Mitchell & Michael Sloan 4 Shepton Mallet Business Paolo Mortarotti 5 Summary and Q&A Stephen Glancey 49
Slide 50: Sandra Mitchell
Sandra Mitchell Head of Group Marketing
Slide 51: Bulmers & ROI
BULMERS & ROI —* ‘ - ° 2 in . Mac Races BULMERS ‘pausizerr's EAYNERS HOHISEYS “Onyend a
Slide 52: In ROI, wine consumption increases as Off Trade shift continues
In ROI, wine consumption increases as Off Trade shift continues 50 Alcohol consumption ROI 45 40 35 M ltrs pure alcohol 30 25 20 15 10 5 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Cider/Perry Wine Spirits Beer Source: Drinks Industry Groups of Ireland; Nie
Slide 53: ROI remains a strong environment for brand leaders
ROI remains a strong environment for brand leaders Level of Market Consolidation ROI On & Off Trade – Leading Brand Volume ROI vs E&W (1) Share Per Segment (%) (1) 91.0 86.0 72.0 % LAD volume sold 67 through Multiples E&W “83% of consumers believe that compared to 2006, it is now more 25.0 important
Slide 54: Bulmers
Bulmers ● The definitive cider brand in Ireland: – No1 Cider brand by volume 1 – 100% distribution1 – 49% drinkers claim it as one of their 3 favourite LAD brands2 ● Growth strategies: – Recruit 18-24 yr old drinkers – Improve value perceptions versus other LADs – Grow in other categories Source: (1
Slide 55: Integrated advertising, social media and experiential programme
Integrated advertising, social media and experiential programme TV & Outdoor advertising Social Media Sponsorship Programme • Integrates TV and social media • 37,000 competition entries • Forbidden Fruit: 34,000 festival goers over 3 days in Dublin; • Focused on driving ROS of pint • 30,000 apps dow
Slide 56: Cider in Ireland is still apple
Cider in Ireland is still apple – flavours have not gained traction (1) Ireland On & Off Trade –Segment Volume Share (%) (2) Source: Source: (1)Ipsos MRBI Aug 12; (2) Nielsen MAT Sep 12 Ipsos MRBI 56
Slide 57: Key Brand Health Measures for Bulmers strengthened in 2012
Key Brand Health Measures for Bulmers strengthened in 2012 Source: (1) Ipsos MRBI Sept 20 12 across 3900 consumers , with 800 18-24 yr olds 57
Slide 58: Price differential versus lager has hindered category growth
However, price differential versus lager has hindered category growth Source: Nielsen, MAT Sep ‘12 58
Slide 59: Bulmers brand strength has allowed us to diversify into beer
Bulmers brand strength has allowed us to diversify into beer • +1241 On Trade stockists; • 450 On Trade stockists (3) Potential to exploit Irish • volume +27% in Ons (1) • 1.2% On Trade share (2) credentials further through • Outperforming other beer • volume + 59% in Offs (1) launches in the past 2
Slide 60: Bulmers and ROI: going forward
Bulmers and ROI: going forward ● Continue to take actions to grow brand by growing cider ● Diversify into other drinks categories ● Conditional acquisition of Gleeson’s will provide multi beverage platform 60
Slide 61: Magners GB
MAGNERS GB ‘MAGNERS pases vanes GAYMERS iwi : il
Slide 62: Significant consumer potential for Cider growth
There is still significant consumer potential for Cider growth Total trade 7-day penetration of categories % of adults, indexed on 2001 (1) Source: (1) KWP Alcovision – Dec MATs & Y/E Sept 2012 - % of adults. 62
Slide 63: Number of cider brands increases in a consolidated market
Number of cider brands increases in a consolidated market 73 Source: Nielsen MAT 13/10/12 ; CGA MAT 13/9/12 63
Slide 64: Growth driven by modern, flavoured and specialist segments
Growth driven by modern, flavoured and specialist segments. Cider Volume (KHL) by Segment Source: Nielsen MAT 13/10/12 ; CGA, 13/9/12 64
Slide 65: Magners
Magners ● The UK’s best selling bottled cider brand (1) – No2 Cider brand in UK (1) – 63% On Trade distribution (3) – Outperforms category in terms of quality and authenticity measures (2) ● Growth strategies: – Recruit 18-24 yr old drinkers – Convert preference at point of purchase – Reinforce lead
Slide 66: Integrated ATL campaign across TV, social media and sponsorship
Integrated ATL campaign across TV, social media and sponsorship Advertising Social Media Sponsorship • Integrated ATL campaign • Very successful social media • 6 month Udderbelly festival programme involving exclusive • Built sociability and content and webcasts; in London & Edinburgh refreshment me
Slide 67: We have grown our share of the growing flavours segment
We have grown our share of the growing flavours segment Source: Nielsen W/E 14 week ending 13/10/12 67
Slide 68: Magners Brand Health Has Remained Stable
Magners Brand Health Has Remained Stable Magners brand health: key measures (6 months vs PY) Source: Hall & Partners 6 months to Oct 2012 across 2200 consumers 68
Slide 69: Magners H1 price premium helped fuel Off Trade volume decline
Magners H1 price premium helped fuel Off Trade volume decline -1% (Cider +7%) -14% (Cider -2%) Source: Nielsen MAT 13/10/12 69
Slide 70: On Trade Magners declines slightly, with Golden Draught growing
On Trade Magners declines slightly, with Golden Draught growing. Source: CGA MAT 3/9/12 70
Slide 71: Magners remains the first choice cider brand in the On Trade
Magners remains the first choice cider brand in the On Trade Source: Hall & Partners MAT Sep 12 71
Slide 72: Gaymers flavours launch has helped gain share of flavours
Gaymers flavours launch has helped gain share of flavours Source: Nielsen Aug 12 72
Slide 73: Magners and GB: going forward
Magners and GB: going forward ● New brand advertising campaign ● Get Off Trade trading plans right ● Drive Magners Golden Draught distribution ● Exploit growth segments: – Flavour innovation – Shepton Mallet Craft & Specialist brands ● Explore ways to further reduce cost base 73
Slide 74: Tennent's & Scotland
TENNENT’S & SCOTLAND 5 IMs caus BULMERS yayzurs GAYMERS AORNSEY'S Te, ‘; ‘fd "Cnitnad al. y <
Slide 75: The Scottish drinks market is in decline, with only cider in growth
The Scottish drinks market is in decline across On and Off Trade, with only cider in growth Scotland Total Trade, Liquor Volumes Scotland Total LAD (000's HL) 2500 Volume ‘000s HL On Trade and Off Trade 6,000 2000 5,000 Volume ‘000s HLs -3.3% -1% 1500 4,000 Total Cider (5%) 000's HL Total Beer (-3%)
Slide 76: The Scottish On Trade remains strongly independent
The Scottish On Trade remains strongly independent Big 4 Brewer Share LAD Scotland On Trade Off Trade (2) 11% Non Outlets by Tenure (1) Managed % Off Trade LAD volume sold by Big 4 73 11% Brewers E&W Managed % Off Trade LAD 78% Free volume sold by Big 4 53 Trade Brewers Scotland % of LAD Off-Trade 0
Slide 77: Tennent's Lager
Tennent’s Lager ● Scotland’s favourite pint: – 68% claim it’s Scotland’s favourite pint (1) – 40% category volume share (2) – 72% distribution in Independent Ons (3) – Favourite brand amongst all age groups (2) ● Growth strategies: – Recruit 18-24 yr old drinkers – Build brand value – Enter new prof
Slide 78: ATL focused on brand rejuvenation amongst younger drinkers
ATL focused on brand rejuvenation amongst younger drinkers Sponsorship Social Media Programme Tennent’s Original Export • T in the Park : over 100,000 festival • 50,000 likes (68% 18-34 yr olds) • Builds Tennent’s quality credentials goers per day. 50+ hours of TV • Accesses premium lager profit poo
Slide 79: Tennent's increased favourite brand score in 2012
Tennent’s increased is favourite brand score in 2012 Source: Hall & Partners MAT Aug 12 .1513 respondents (450 18-24) Jun10 – Aug11; 2165 respondents (649 18-24) Aug11 to Aug 12; 79
Slide 80: Off Trade volume declines as we pursue value growth strategy
Off Trade volume declines as we pursue value growth strategy Tennent’s Off Trade price index & value share (1) 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 2007 2008 2009 2010 2011 2012 Tennents Val Share Offs Price Index v Other Std Lager Offs Source: (1) Nielsen MAT 13/10/12 ; 80
Slide 81: On Trade volume stable as we address National On Trade pricing
On Trade volume stable as we address National On Trade pricing Tennent’s margin development in (1) Multiple On Trade (2) 204 Index against FY11 118 100 FY11 FY12 FY13 National On (1) CGA, 1/9/12; (2) Internal C&C data 81
Slide 82: Magners Golden Draught has built quickly
Magners Golden Draught has built quickly On Trade share 5% draught cider E&W On Trade share 20% draught cider Scotland Source: CGA 6/10/12 82
Slide 83: We have grown share of ale category with Caledonia Best
...and we have grown share of ale category with Caledonia Best Scotland Free Trade Caledonia Best volume 7.00% share YTD Aug 2012 6.00% Share of Ale Category 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Source: AC Nielsen, Sep-12 Source: Taylor Nelson, Sep-12 Source: CGA 1/9/12 83
Slide 84: Marketing investment and trade lending supported margin improvement
Both marketing investment (DBM) and trade lending have supported margin improvement for TCB since 2010 30.0 Net lending investment (€m) 25.0 DBM (€m) 20.0 Operating Margin (%) 15.0 € Millions 10.0 5.0 0.0 2011 2012 2013 (Est) -5.0 Source: C&C internal data 84
Slide 85: Tennent's & Scotland: Going Forward
Tennent’s & Scotland: Going Forward ● Build on the strength of Tennent’s brand ● Migrate the business model from single brand to multi-beverage: – Drive Magners and Caledonia Best to category leadership – Focus on craft & speciality brands to lead innovation agenda – Access new profit pools 85
Slide 86: Michael Sloan
Michael Sloan Finance Director, Tennent’s
Slide 87: Trade lending is an important strategy for C&C
Trade lending is an important strategy for C&C to support on-trade market • Scottish on-trade market of 2039 khls with 10,800 outlets • Lack of bank lending to sector • Loan book grown from £7.5m to £18.9m in last 2 years • Move from brand focus to portfolio focus 87
Slide 88: Video: Steve Mallon
Video: Steve Mallon 88
Slide 89: C&C and effective operators working together
C&C and effective operators working together for long term business growth • Point of differentiation for C&C • Major supplier willing and able to work with the market to promote sustainable growth • Investment required across full breadth of customer base • 60% of investments < £20k (Scotland 12 mo
Slide 90: Tailored solutions create value
Tailored solutions create value • Flexible investment structure • Depressed valuations = opportunity and security • Cashflow based lending helps manage risk 90
Slide 91: Presentations
Presentations 1 Overview Stephen Glancey & Kenny Neison 2 Export Markets Joris Brams & Mark Boulos 3 Domestic Markets Sandra Mitchell & Michael Sloan 4 Shepton Mallet Business Paolo Mortarotti 5 Summary and Q&A Stephen Glancey 91
Slide 92: Shepton Mallet | Heritage & Tradition
Shepton Mallet | Heritage & Tradition 92
Slide 93: Shepton Mallet | History and Tradition
Shepton Mallet | History and Tradition ● 330 years of cider making history ● The ‘centre of excellence’ for English cider production ● Six different owners since 1959 ● Back where it belongs - within a cider focused owner 93
Slide 94: Why the 'Centre of Excellence'?
Why the ‘Centre of Excellence’? ● People ● Tradition ● Craftsmanship ● Innovation ● Community ‘Made by’ is just as important as ‘Made in’ 94
Slide 95: Shepton Mallet | Sustainable Orcharding Strategy
Shepton Mallet | Sustainable Orcharding Strategy ● Recent launch of substantial investment programme in orcharding and agricultural projects – Strong involvement of local community – Strategic review of long term relationship with suppliers – Promotion of innovation and sustainability – Differentiat
Slide 96: Shepton Mallet | Progress Since Acquisition
Shepton Mallet | Progress Since Acquisition ● Delivering significant enhancements in production – Integrated procurement and logistics – Improved quality of contract manufacturing – Increased site efficiency 96
Slide 97: Shepton Mallet | Progress Since Acquisition
Shepton Mallet | Progress Since Acquisition ● …brand development just beginning… – Repositioning of National brands – Gaymers – Development of craft and premium ciders – Addlestones & Specialities – Strengthening of local brands – Dry Blackthorn & Natch – Exploitation of back catalogue – Development
Slide 98: Shepton Mallet | Portfolio Opportunity
Shepton Mallet | Portfolio Opportunity ● Unique opportunity to build on differentiated and innovative ciders – Addlestones, uniquely positioned craft cider – Speciality craft ciders – Seasonal ranges – Local heroes: Dry Blackthorn, Natch 98
Slide 99: UK Cider | Premiumisation Trend in UK cider
UK Cider | Premiumisation Trend in UK cider ● Off trade volume growth of 70% Cider Off Trade Volume & Price Growth 456 447 ● Price per liter up 49% Volume Millions of Litres 430 442 391 Price per Litre ● Modern driving 2006 - 2008 358 302 ● Pear driving 2009 - 2010 262 £1.84 £1.95 £1.63 £1.68 £1.58
Slide 100: UK Cider | Specialist Cider in strong growth
UK Cider | Specialist Cider in strong growth ● Speciality and craft cider market Specialist Cider in strong growth Share of Total Cider Volume 7.3% OFFS ● On trade channel leading in volume ONS 5.9% and profit 5.2% 5.3% 4.9% ● Differentiated offering 3.9% ● Gateway craft opportunity with Addlestones
Slide 101: UK Cider | Specialist Cider in strong growth
UK Cider | Specialist Cider in strong growth 40% GB MAT 38.6% 40% GB 12 Weeks to 7 July 2012 To 7 July 2012 33.4% 35% 30.5% 29.2% 30% 30% 25% 20% 20% 15% 10% 9.1% 10% 4.0% 4.5% 0% 5% -1.4% 0.3% -3.8% 0% -6.7% -10% -7.7% -9.8% -5% -2.4% -13.5% -5.8% -10% -20% Total Draught Standard Modern Draught Spe
Slide 102: Addlestones Cloudy Premium Cider
Addlestones Cloudy Premium Cider - Addlestones #2 specialist brand - Highest ROS in last 12 weeks - Outselling rivals by 250 pints per outlet Source: CGA
Slide 103: Shepton Mallet | Speciality Craft Range
Shepton Mallet | Speciality Craft Range 103
Slide 104: Shepton Mallet | Portfolio Focus
Shepton Mallet | Portfolio Focus ● Product portfolio matching commercial opportunities Regional National International 104
Slide 105: Regional Opportunity | Cider - South-West bias
Regional Opportunity | Cider - South-West bias GB 4 Blackthorn Draught South-West Sales % of GB On-Trade Sales Regional Distribution % MAT Aug 12 - Volume % LONDON 2 SOUTHERN 2 EAST ANGLIA 3 Cider 19% HARWEST ENGLAND 24 HARWEST WALES 8 MIDLANDS 1 Lager 10% LANCASHIRE 1 YORKSHIRE 2 NORTH EAST 1 Ale 1
Slide 106: Shepton Mallet | Regional Opportunity
Shepton Mallet | Regional Opportunity ● Backdrop – South West of England is the spiritual home of cider – Highest per capita consumption of cider in UK – Share losses on trade for most relevant regional brand: Dry Blackthorn – Lack of support to the premium, craft end of our portfolio Source: CGA &
Slide 107: Shepton Mallet | Regional Opportunity
Shepton Mallet | Regional Opportunity Opportunity How to get there • Strengthen presence in on trade distribution • Improve local visibility for Shepton Mallet regionally Cider Mill • Increase marketing focus on local heroes and • Re-establish local heroes craft • Reinforce regional commercial infra
Slide 108: Shepton Mallet | National On-Trade Opportunity
Shepton Mallet | National On-Trade Opportunity ● Backdrop – On trade looking for genuine differentiation in cider offering – Craft cider growing, but not yet managed as a category 108
Slide 109: Shepton Mallet | National On-Trade Opportunity
Shepton Mallet | National On-Trade Opportunity Opportunity How to get there • Invest in Addlestones as leading craft cider • Champion Addlestones • Emphasise heritage and provenance • Develop RTM structure for craft and specialist category • Develop “ciders for all occasions” • Work with wholesale c
Slide 110: Shepton Mallet | International Opportunity
Shepton Mallet | International Opportunity Video: Paul Bartlett ● Consumer education on English heritage ● Leverage new product development ● Utilise existing infrastructure 110
Slide 111: Summary
Summary ● Rooted in heritage and history ● Centre of excellence in cider making in England ● Outstanding production capability ● Best position to promote growth of the English craft cider category ● Platform for international growth 111
Slide 112: Presentations
Presentations 1 Overview Stephen Glancey & Kenny Neison 2 Export Markets Joris Brams 3 Domestic Markets Sandra Mitchell 4 Shepton Mallet Business Paolo Mortarotti 5 Summary and Q&A Stephen Glancey 112
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Slide 114: C&C Group plc Investor Day November 2012
C&C Group plc Investor Day | November 2012