C&c Group Plc · LSE:CCR
C&c — FY2015 Earnings Presentation
25 slides from C&c's earnings presentation, May 13, 2015
Slide 1: FY 2015 Results
FY 2015 Results 13 May, 2015
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely in connection with the financial results of C&C Group plc (the "Company") for the period ended 28 February, 2015 and should be read in conjunction with the announcement of the financial results of the Company for the period ended 28 February, 201
Slide 3: Agenda
FY 2015 Results | Agenda 1. Highlights 2. Financial Review 3. Business Model 4. Summary & Outlook C&C Group plc FY 2015 Slide 3
Slide 4: Highlights
Highlights FY 2015 Overview Operating profit of €115m Modest earnings growth in Scotland and Ireland Business model transformation in core geographies C&C Brands repositioning advanced Investment for long term in growing US market International cider category opportunities Progressive
Slide 5: Financial Review
Financial Review Ad satay
Slide 6: Financial Highlights
Financial Highlights FY 2015 Financial Overview Net revenue up 10.3% to €683.9m Net revenue €683.9m EBIT €115.0m Operating profit down 9.2% to €115m FCF €85.7m Pre Exceptional Adjusted diluted EPS down 7.8% to 27.2 cent EPS 27.2 cent Adjusted Diluted Impairment of €150m on US intangible asse
Slide 7: Net Revenue and Operating Profit
Net Revenue and Operating Profit Reported net revenue +10.3% 750 €m 725 85.1 700 683.9 (24.1) 675 (11.6) (0.8) 650 21.3 625 620.2 (6.2) 600 FY '14 Currency Ireland Scotland C&C Brands North America Export FY '15 Reported operating profit (9.2%) 135 €m 0.9 0.7 2.8 130 126.7 125 (6.3) 120 115.0 115 (9
Slide 8: Segmental Performance
Segmental Performance Constant currency basis Ireland LAD volume level despite tough comparative EBIT €59.1m Adverse channel mix but pricing stable Change +1.5% Brand investment maintained Integration cost savings delivered Scotland Tough Q4 linked to drink driving regulations EBIT €39.2m
Slide 9: Segmental Performance
Segmental Performance Constant currency basis North America New entrant disruption impact EBIT €1.5m Shipment volumes down 18% Change (86.2%) Operating gearing drives EBIT reduction Increased investment in sales and marketing Export Strong Growth in new markets EBIT €4.8m Strong Magners
Slide 10: Free Cash Flow
Free Cash Flow €m 24.9 140 (8.4) (3.1) 61.3% 120 115.0 EBITDA 58.8% (21.9) EBITDA 100 (12.8) 85.7 82.3 80 (9.1) (3.4) (6.4) +7.5 60 Operating Dep./Amort. Working Trade CapEx Income Finance Pensions Other FCF before Exceptional Free Profit Capital Lending Tax Costs exceptionals Items Cashflow Strong
Slide 11: Balance Sheet
Balance Sheet €m 0.0 Net Debt (50.0) to EBITDA 82.3 1.1x (100.0) (29.5) (14.1) 1.0 (150.0) (30.0) (145.2) (22.3) (157.8) (200.0) Net debt - 1 Mar Free cash flow Dividends paid Acquisitions Share Buyback Exercise of share Other Net debt - 28 Feb 2014 options 2015 Strong Balance Sheet Other: principal
Slide 12: Balance Sheet & Exceptional Costs
Balance Sheet & Exceptional Costs Asset Impairment Tri-annual independent valuation of tangible fixed assets Annual review of intangible assets One-off non-cash impairment of €160.5m €150m on US intangible assets (€27m FX impact) €10.5m on tangible fixed asset impairment Other Exceptionals
Slide 13: Dividend & Tax
Dividend & Tax Progressive Dividend Full year dividend of 11.5 cent per share; up 15% Final proposed dividend of 7.0 cent per share; up 22.8% Payout ratio of 42.3% Dividend cover of 2.4x (compared to 3x in FY 2014) Earnings and cash conversion in core segments supporting a progressive poli
Slide 14: Business Model
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Slide 15: Business Model | Strategy Overview
Business Model | Strategy Overview Strong model; cash generative businesses Attractive Geographies 1 Highly Cash 5 Resilient 2 Well-invested Generative Defensive Assets Sustainable 4 3 Multi Iconic Beverage Brands Brand led wholesale model in Strong cash Capitalise on international core markets gene
Slide 16: Segment Review | Ireland & Scotland
Segment Review | Ireland & Scotland Attractive Leading position Geographies Characteristics And Positioning Mature Cash conversion FY 2015 Progress Investment behind Bulmers & Tennent’s Portfolio development (Heverlee, Caledonian Best) Launch of new products (Clonmel 1650 & Lemon T) Corona d
Slide 17: Ireland & Scotland | Transforming to a New Business Model
Ireland & Scotland | Transforming to a New Business Model No1 for Brands & Customer Service Customer as important as consumer Full beverage range Own brand and third party partner brand range Local depot network enabling fast and flexible service Flexibility on credit & investment More ‘
Slide 18: Ireland & Scotland | Progress in Transformation
Ireland & Scotland | Progress in Transformation Transformation Progress OLD WORLD NEW WORLD 47 Sales structure 155 Own LAD Sales capability 3rd party & multi beverage 300 Number of SKUs 2500 3 Depot structure 14 2 or more Systems 1 2 Back office 1 7,000 Customer interaction 16,000 Good progress to
Slide 19: Segment Review | C&C Brands
Segment Review | C&C Brands Biggest cider Competitive market Characteristics And Positioning Mature Niche Position FY 2015 Progress Model wrong in current environment Focus and simplicity needed Sales and marketing already rationalised Distribution resolved by H2 Portfolio prioritisation C
Slide 20: Segment Review | North America
Segment Review | North America Growth market Unique offering Characteristics And Positioning New entrant Long-term disruption investment FY 2015 Progress Expansion of infrastructure Increased investment behind core Woodchuck brand Emerging capability on innovation Ll Improving prospects return
Slide 21: Segment Review | Export
Segment Review | Export High growth Cider growth in potential Asia & Europe Characteristics And Positioning Low entry Premium cost positioning FY 2015 Progress Expanding footprint in Europe Accelerating presence in Asia and Africa Allocating more resource to Export Australian issues now reso
Slide 22: Capital Allocation
Capital Allocation Focus on driving shareholder value Balance sheet remains strong: Net Debt to EBITDA 1.1x Core Markets Driving Earnings & Cash Generation Core segments: 86% EBIT Progressive dividend policy: target 2.0x cover 14% Strategic capital requirements? Only C&C Brands Deals asses
Slide 23: Summary & Outlook
Summary & Outlook FY 2016 | Year of Investment & Stabilisation Core business transformation progressing well Cost reduction initiatives on track Upweight Bulmers & Tennent’s activity Increased sales and marketing in US Focus on growth opportunities outside UK & Ireland Decent start in ea
Slide 24: Q&A
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Slide 25: Segmental Review
Segmental Review Constant Net Op. Op. Change Change Change Volumes* Change Currency Revenue Profit Margin €m Y-on-Y% €m Y-on-Y% % of Net . Rev ppts Khl Y-on-Y% Ireland 286.9 (2.1%) 59.1 +1.5% 20.6% +0.7ppts 976 +0.5% Scotland 223.6 +61.4% 39.2 +1.8% 17.5% (10.3ppts) 1,300 (4.2%) C&C Brands 107.0 (18