Annual Report 2017
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Annual Report 2017
C&C Group is a premium drinks company which owns, manufactures, markets and distributes branded cider, beer, wine, soft drinks and bottled water.
C&C Group’s brands include: Bulmers, the leading Irish cider brand, Tennent’s, the leading Scottish beer brand, Magners the premium international cider brand; Tipperary Water; Finches soft drinks; as well as a range of niche, premium and craft ciders and beers.
C&C Group also owns and manufactures Woodchuck, a leading craft cider brand in the United States.
C&C Group manufactures and distributes a number of 3rd party international beer brands in Scotland, Ireland and Northern Ireland.
C&C is also a leading drinks wholesaler in Scotland and Ireland, where it operates under the Tennent’s and C&C Gleeson brands respectively.
C&C Group is headquartered in Dublin and its manufacturing operations are based in Co. Tipperary, Ireland; Glasgow, Scotland; and Vermont, US. C&C Group plc is listed on the Irish and London Stock Exchanges.
Net Revenue
€559.5m
decreased by 15.6%
Operating Profit
€95.0m
before exceptional items down 7.9%
Operating Margin
17.0%
before exceptional items up 1.4 ppts on prior year
Adjusted Diluted Earnings Per Share
23.8 cent
per share down 1.7%
Free Cash Flow Conversion
52.9%
before exceptional items
The past 12 months have yet again demonstrated the fundamental strengths of your Company in the face of challenging conditions both in terms of the macro economic environment and competitive activity. Clearly our trading and financial performance has been affected by a period of considerable currency volatility. Competition within the International beverage sector has impacted also on our local markets with increased pressure on price and margin.
FY2017 has been a period of significant activity for the Group. While trading remained tough, we invested in and delivered volume growth across our core brands; completed a major rationalisation of our production foot print; drove efficiencies across the business; continued to grow our Premium portfolio and export business; and secured an important new long term distribution arrangement with AB InBev. After this year of consolidation, we are in materially better shape to meet the ongoing challenges and opportunities within our industry.
C&C is reporting net revenue of €559.5 million, operating profit of €95.0 million and adjusted diluted EPS of 23.8 cent. On a constant currency basis and after adjusting our North America prior year results to be on a like for like basis with the current financial year (as though the Pabst arrangement had been operational in FY2016), net revenue decreased 6.9% and operating profit decreased 0.4%.
The past 12 months have yet again demonstrated the fundamental strengths of your Company in the face of challenging conditions both in terms of the macro economic environment and competitive activity. Clearly our trading and financial performance has been affected by a period of considerable currency volatility. Competition within the International beverage sector has impacted also on our local markets with increased pressure on price and margin.
FY2017 has been a period of significant activity for the Group. While trading remained tough, we invested in and delivered volume growth across our core brands; completed a major rationalisation of our production foot print; drove efficiencies across the business; continued to grow our Premium portfolio and export business; and secured an important new long term distribution arrangement with AB InBev. After this year of consolidation, we are in materially better shape to meet the ongoing challenges and opportunities within our industry.
C&C is reporting net revenue of €559.5 million, operating profit of €95.0 million and adjusted diluted EPS of 23.8 cent. On a constant currency basis and after adjusting our North America prior year results to be on a like for like basis with the current financial year (as though the Pabst arrangement had been operational in FY2016), net revenue decreased 6.9% and operating profit decreased 0.4%.
Including distribution rights for certain AB InBev beer brands such as Stella Artois, Beck’s, Corona.
Including distribution rights for certain AB InBev beer brands such as Stella Artois, Beck’s, Corona, Budweiser.
Including distribution rights for certain AB InBev beer brands such as Stella Artois, Beck’s, Corona.
Including distribution rights for certain AB InBev beer brands such as Stella Artois, Beck’s, Corona, Budweiser.
Meeting customer needs
|
Core Brands All own brands |
|
“Must-have” local brands |
|
Premium and Craft Portfolio Predominantly own brands or craft JVs |
|
Craft and premium consumer experimentation |
|
Other Owned Brands Owned local and specialty brands |
|
Local, niche and specialty brands |
|
World Premium Brands 3rd party brands distributed under contract, primarily AB InBev brands |
|
Access to global brands |
|
Wholesale All 3rd party brands bought-in |
|
“One-stop shop” |
| Strategic pillars | Medium term strategic goals | Financial characteristics |
|---|---|---|
Enhance value of key brands |
Brand and product investment to build value of key brands over the long term |
Resilient high margins |
Grow Premium and Craft portfolio |
Leverage key brand strength and market position to grow our portfolio of Premium and Craft brands |
|
Brand-led drinks wholesaler in key markets |
Deliver unrivalled portfolio strength, value and service to the Scottish and Irish on-trade and off-trade |
Cash generation and Balance Sheet strength |
Rigorous focus on costs and efficiencies |
Ongoing commitment to delivering operational efficiencies and cost control |
EPS growth and cash returns |
International growth |
Grow international volumes of our key brands through strategic alliances |
|
Capital allocation to enhance growth and shareholder returns |
Selective acquisitions to fuel sustainable, profitable growth and/or cash returns to shareholders |
Attributable earnings before exceptional items divided by the average number of shares in issue as adjusted for the dilutive impact of equity share awards
FY15 27.2c
FY16 24.2c
FY17 23.8c
Free Cash Flow is a non GAAP measure that comprises cash flow from operating activities net of capital investment cash outflows which form part of investing activities
FY15 €82.3m
FY16 €113.4m
FY17 €54.3m
The conversion ratio is the ratio of free cash flow as a percentage of EBITDA before exceptional items
FY15 16.8%
FY16 15.6%
FY17 17.0%
The ratio of net debt (Net debt comprises borrowings (net of issue costs) less cash) to Adjusted EBITDA
FY15 1.13x
FY16 1.33x
FY17 1.55x
Total dividend per share paid and proposed in respect of the financial year in question
FY15 11.50c
FY16 13.65c
FY17 14.33c
Dividend cover is Dividend/Adjusted diluted EPS
FY15 42.3%
FY16 56.4%
FY17 60.2%
Tonnes of CO2 emissions
FY15 37,955t
FY16 45,071t
FY17 41,228t
Tonnes of waste sent to landfill
FY15 27t
FY16 24t
FY17 16t
The number of injuries that resulted in lost-work days, per 100,000 hours working time in production facilities
FY15 0.68
FY16 0.42
FY17 0.56
Meeting customer needs
|
Core Brands All own brands |
“Must-have” local brands |
|
Premium and Craft Portfolio Predominantly own brands or craft JVs |
Craft and premium consumer experimentation |
|
Other Owned Brands Owned local and specialty brands |
Local, niche and specialty brands |
|
World Premium Brands 3rd party brands distributed under contract, primarily AB InBev brands |
Access to global brands |
|
Wholesale All 3rd party brands bought-in |
“One-stop shop” |
| Strategic pillars | Medium term strategic goals |
|---|---|
Enhance value of key brands |
Brand and product investment to build value of key brands over the long term |
Grow Premium and Craft portfolio |
Leverage key brand strength and market position to grow our portfolio of Premium and Craft brands |
Brand-led drinks wholesaler in key markets |
Deliver unrivalled portfolio strength, value and service to the Scottish and Irish on-trade and off-trade |
Rigorous focus on costs and efficiencies |
Ongoing commitment to delivering operational efficiencies and cost control |
International growth |
Grow international volumes of our key brands through strategic alliances |
Capital allocation to enhance growth and shareholder returns |
Selective acquisitions to fuel sustainable, profitable growth and/or cash returns to shareholders |
FY15 27.2c
FY16 24.2c
FY17 23.8c
FY15 €82.3m
FY16 €113.4m
FY17 €54.3m
FY15 16.8%
FY16 15.6%
FY17 17.0%
FY15 1.13x
FY16 1.33x
FY17 1.55x
FY15 11.50c
FY16 13.65c
FY17 14.33c
FY15 42.3%
FY16 56.4%
FY17 60.2%
FY15 37,955t
FY16 45,071t
FY17 41,228t
FY15 27t
FY16 24t
FY17 16t
FY15 0.68
FY16 0.42
FY17 0.56
