C&C Group plc. Deutsche Bank Conference

Transcription

1 C&C Group plc Deutsche Bank Conference June, 2012

2 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, beliefs and expectations. These statements are based on the Company's current plans, estimates and projections, as well as the Company's expectations of external conditions and events. Forward-looking statements involve inherent risks and uncertainties and speak only as of the date they are made. The Company undertakes no duty to and will not necessarily update any such statements in light of new information or future events, except to the extent required by any applicable law or regulation. Recipients of this presentation are therefore cautioned that a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. Your attention is drawn to the risk factors set out at the end of this presentation. They are not set out in any particular order of priority. The risks described in this document, however, are not exhaustive and consequently do not necessarily comprise all those associated with the Company. There may be other risks which may have an adverse effect on the business, financial condition, results or future prospects of the Company. Bulmers Ltd of Clonmel, Ireland, a company within the C&C Group, owns the trade mark BULMERS in the Republic of Ireland. Bulmers Ltd is not connected with HP Bulmer Ltd of Hereford, UK. BULMERS Original Vintage Cider produced by Bulmers Ltd of Clonmel, Ireland is sold outside the Republic of Ireland under the name MAGNERS Original Irish Cider. For further information see Slide 2

3 Group Overview FY 2012 Financial Review International Cider Update Summary and Q&A

4 Beer Manufacturing Assets Cider Distributed C&C Group plc Wellpark Facility Clonmel Facility Shepton Mallet Facility Slide 4

5 FY 2012: Performance Highlights Operating profit growth of 9%* to 111.2m Strong free cash flow; net cash at year end of 68.3 million Dividend increase of 24% to 8.17 cent per share; progressive dividend policy Magners volume growth of 5% Strong Tennent s performance in Scotland and Ireland Ireland performance stable: in line with objective Slide 5 *Constant currency

6 FY 2012: Strategic & Operating Highlights Innovation & NPD Continuing international development of portfolio Bottling line relocation to Glasgow New packaging contract wins Acquisition of Hornsby s Cider brand Appointment of Joris Brams, MD International and strengthening of broader management team Employees interests aligned with shareholders Slide 6

7 Business Model Delivering Objectives Strategic Model Brand market combinations Multi-beverage platforms Authentic local brands Strong balance sheet Management capability FY 2012: Delivering on Objectives Note: constant currency Magners EBIT +12.9% Tennent s EBIT +22.5% Ireland EBIT +1.1% FCF % EBITDA 78.1% Slide 7

8 Group Overview FY 2012 Financial Review International Cider Update Summary and Q&A

9 FY 2012: Financial Highlights Operating profit up 9%* to 111.2m Operating margin improved by 2.9ppts to 23.1% EBIT* m Change Cider ROI 42.2m (2.3%) Magners 33.2m +12.9% Gaymers 5.5m +1.8% Strong free cash flow of 102.6m Net cash surplus and new 250m facility to 2017 Tennent s 22.3m +22.5% Hornsby s 0.9m - Third Party 7.1m +22.4% *Before Exceptional items; constant currency Adjusted diluted EPS increased 13.6% to 27.6 cent (continuing operations) Dividend increase of 23.8% to 8.17 cent per share Slide 9

10 FY 2012: Strong Balance Sheet m Net cash of 68.3m New 250m facility to 2017 Debt capacity of c. 500m (i) Net (debt)/cash comprises cash, borrowings net of issue costs and excluding the fair value of interest rate derivative financial instruments which were nil at the year end and a liability of 2.0 million at 28 February, 2011 Defined Benefit Pension Deficit (ii) 29 February, 2012: 15.1m 31 August, 2011: 23.7m 28 February, 2011: 15.3m (ii) At 29 February 2012, the retirement benefit obligations computed in accordance with IAS19 Employee Benefits amounted to 15.1 million gross and 13.2 million net of deferred tax (2011: 15.3 million gross and 13.3 million net of deferred tax). Slide 10

11 GB: Cider Magners FY 2012 Change Const Curr. Cider category growth of 5%; premium ciders gaining share Net revenue 107.6m +0.7% Operating Profit 25.2m +5.9% Operating Margin 23.4% +1.1ppts Strong off-trade performance Volumes khl % Golden Draught and Pear driving on-trade performance Gaymers FY 2012 Change Const Curr. Net revenue 65.2m (22.1%) Operating Profit 4.3m +7.5% Pursuit of value over volume in Gaymers Operating Margin 6.6% +1.8ppts Volumes khl 1,152 (27.2%) Re-launch Gaymers brands into growing fruit variant market Slide 11

12 Ireland: Cider & Beer Cider ROI FY 2012 Change Const Curr. LAD category volume decline of 1% (on-trade -6%; off-trade +7%) Net revenue 91.5m (8.5%) Operating profit 42.2m (2.3%) Channel switch to off-trade continues; off-trade price deflation Operating margin 46.1% +2.9ppts Volumes khl 532 (3.0%) Operating profit in ROI stable for third successive year Beer ROI FY 2012 Change Const Curr. Strong beer performance Net revenue 9.9m +12.5% Operating profit* 2.2m % Operating margin 22.2% +14.2ppts Volumes khl % Tennent s volumes +64% across both channels Launch of Caledonia Smooth Slide 12 *before the allocation of central overheads

13 Tennent s & Third Party Brands Tennent s FY 2012 Change Const Curr. Tennent s outperformance: Brand and trade investment Net revenue 100.1m (1.9%) Operating profit 22.3m +22.5% Strong brand health scores Operating margin 22.3% +4.5ppts Shift away from low value volume Volumes khl 1,422 (8.8%) 3 rd Party Brands FY 2012 Change Const Curr. Bottling line relocated to Wellpark Brewery Net revenue 74m (2.8%) Operating profit 7.1m +22.4% Third party brands performing well: +22.4% Operating margin 9.6% +2.0ppts Volumes khl 376 (4.5%) Slide 13

14 Group Overview FY 2012 Financial Review International Cider Update Summary and Q&A

15 International Cider: Market Overview Growing sector interest in cider & craft beers Continuing innovation and new category entrants Strong double-digit category volume growth FY %* FY %* * FY 2012 C&C Volume Growth Slide 15

16 Cider Emerging Cider Markets USA Canada Australia Finland South Africa Cider volume 400kHL 222kHL 400kHL 480kHL 2,143kHL Beer volume 236,000kHL 22,460kHL 17,866kHL 4730kHL 28,482kHL Penetration 0.2% 1.0% 2.2% 10.1% 7.0% Cider growth (LTM) +25% +2% +35% Imported Cider +5% +16% Trends Cider is an extension of craft beer Cider is an extension of craft beer Sweet/ flavoured ciders driving growth Significant LAD category in Scandinavia driven by local brands Alternative to beer, refreshing in a hot climate Source Euromonitor, Canadean & C&C estimates Slide 16

17 C&C Export Cider Magners FY 2012 Change Const Curr. Acquisition of Hornsby s and appointment of Joris Brams Net revenue 24.7m +17.6% Distribution agreements: Suntory (Austr.) & Moosehead (Canada) Operating profit 4.5m +73.1% Operating margin 18.2% +5.8ppts Investment in US sales force & infrastructure Volumes khl % Gaymers FY 2012 Change Const Curr. Further opportunities for Gaymers portfolio in development Operating Profit* 1.2m (14.3%) Volumes khl 35 (11.0%) Hornsby s FY 2012 Change Const Curr. Operating Profit 0.9m - Hornsby s trading in line with expectation; integration to be completed on schedule Tennent s supporting international development Volumes khl 18 - Slide 17 *before the allocation of central overheads

18 C&C Export Strong portfolio of cider brands Irish, English and American heritage Tennent s export heritage Launch in Australia, Italy, North America & Russia Magners Volumes (MAT) hectolitres FY 2012* +25% International management team and balance sheet to capitalise on growth FY 2012* +78% Slide 18 * FY 2012 C&C Volume Growth

19 Group Overview FY 2012 Financial Review International Cider Update Summary and Q&A

20 Summary Delivered on objectives Tennent s performing strongly in Scotland and Ireland Innovation and NPD supporting strong core brands Magners growing in GB and internationally Ireland continues to be challenging Delivering On Objectives Magners EBIT +12.9% Tennent s EBIT +22.5% Ireland EBIT +1.1% Attractive global opportunity for brand portfolio FCF % EBITDA 78.1% Slide 20

21 Appendix

22 FY 2012: Net Revenue m Structural Underlying Strategic/ Transitional Slide 22

23 FY 2012: Operating Profit m Slide 23

24 FY 2012: Strong Free Cash Flow m Slide 24 *Operating profit is inclusive of discontinued operations and before exceptional items

25 FX, Tax & Financing Costs FX: Neutral position for FY13 with STG:EUR hedged at Tax: guiding 14% to 15% effective rate Financing Costs: undrawn facility cost of < 2m per annum Slide 25 *Constant currency

26 GB: Market Overview GB Beers, Wine & Spirits MAT Volume % Change: 2011 vs 2010 GB On & Off Trade Rolling MAT Volume Slide 26 Source: ACNielsen & CGA Source: ACNielsen & CGA

27 Ireland: Market Overview Irish LAD Market Evolution of On & Off Trade ROI On & Off Trade Rolling MAT Volume 5,688 khl 5,415 khl 5,426 khl 5,376 khl Total Irish LAD Market Slide 27 Source: ACNielsen & CGA Source: ACNielsen & CGA

28 Scotland: Market Overview Scotland On & Off Trade Rolling MAT Volume Slide 28 Source: ACNielsen & CGA

29 Risk Factors Competitive threat Shift from on to off-trade Alcohol duty risk Exchange rate risk Weak business conditions in core markets Slide 29

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