C&c Group Plc · LSE:CCR
C&c — H1 2011/12 Earnings Presentation
28 slides from C&c's earnings presentation, October 2011
Slide 1: 2011/12 First Half Results
2011/12 First Half Results October, 2011
Slide 2: Disclaimer
Disclaimer This presenta,on does not cons,tute an invita,on to underwrite, subscribe for, or otherwise acquire or dispose of any shares or other securi,es of C&C Group plc (the "Company"). The presenta,on contains forward-‐looking statements, including statements about the Company's inten,ons, beli
Slide 3: Presentation Agenda
Presenta7on Agenda H1 Performance Overview Opera7onal Performance Review Summary Q&A Slide 3
Slide 4: H1 Overview
H1 | Overview Challenging trading & consumer environment in core markets Tight control in the short-‐term: Robust performance on cost; opera7ng margin up to 25% Worked the assets harder Good cash conversion and balance sheet strength Inves7ng now for the long-‐term: Pursuing value: T
Slide 5: H1 Financial Highlights
H1 | Financial Highlights Opera7ng profit up 7.8% to €67.4m Opera7ng margin improved by 3.1ppts to 25.1% Strong free cash flow of €71.5m (92.5% of EBITDA) Net cash surplus of €59.7m Adjusted diluted EPS increased 7.1% to 16.5 cent Dividend increase of 11% to 3.67 cent per share Re-‐affirm
Slide 6: H1 Income Statement
H1| Income Statement H1 2012 H1 2011 Change Change % €m €m % Const. currency Net revenue 268.7 289.8 (7.3%) (5.3%) Opera7ng costs (201.3) (226.3) (11.0%) Opera9ng profit before excep9onal items 67.4 63.5 +6.1% +7.8% Net finance charges (2.6) (4.8) (45.8%) Profit before tax 64.8 58.7 +10.4% Income tax e
Slide 7: H1 Net Revenue - Performance Drivers
H1 | Net Revenue -‐ Performance drivers €m 320 Strategic Structural Underlying (€12.7m) (€4.9m) +€2.5m 300 (11.6) (4.1) 280 (6.0) 2.3 (10.0) 2.3 (2.7) (4.9) (1.7) 260 (0.4) 305.5 289.8 240 268.7 220 200 H1 '11 Net Discon7nued Duty H1 '11 Net Currency Gaymers (Export Tennents Off-‐ ROI Cider Magners
Slide 8: H1 Operating Profit - Performance Drivers
H1 | Opera7ng Profit -‐ Performance Drivers €m 80 70 2.6 3.9 2.4 60 (1.0) 1.2 (5.2) 50 40 67.4 63.5 30 20 10 0 H1 '11 Opera7ng Currency Bulmers/Magners Magners Export Gaymers Tennent's Third Party Brands H1 '12 Opera7ng Profit Profit Slide 8
Slide 9: H1 Free Cash Flow
H1 | Free Cash Flow -‐ Strong Free Cashflow €m 100 90 8.5 80 10.5 (5.5) (0.3) (1.8) 70 (6.7) 60 50 40 71.5 66.8 30 20 10 0 H1 '12 EBIT* Deprecia7on Working Capital Capex Tax Finance costs Excep7onals H1 '12 Free cash flow *Note: H1’ 12 EBIT is Earnings before Interest and Tax and equates to Opera,ng
Slide 10: Net Cash & Pension
2010/11 | Net Cash & Pension -‐ Strong Free Cashflow | Strong Balance Sheet €m 70 4.7 60 (0.6) 50 (9.6) 40 71.5 30 59.7 20 10 0 (6.3) -‐10 Net Debt Feb 2011* Free Cash flow Dividends Net disposal Other Net Cash Aug 2011* proceeds *Excludes fair value of swap instruments amoun,ng to a liability of €1
Slide 11: Performance Drivers & Outlook
Performance Drivers & Outlook Core brands remain strong underpinned by con7nued investment Interna7onal cider opportunity con7nues to grow Tennent’s business performing ahead of expecta7on Strong cashflow and strong balance sheet to sustain growth objec7ves Re-‐affirming full year opera7ng p
Slide 12: Operational Performance Review
H1 | Opera9onal Performance Review Slide 12
Slide 13: Ireland: Challenging Market
Ireland: Challenging Market ROI | On & Off Trade – Rolling MAT Volume 0 1 0 0 0 0 0 0 -‐1 -‐1 -‐2 -‐3 -‐2 -‐2 -‐2 -‐3 -‐3 -‐3 -‐4 -‐4 -‐4 -‐4 -‐5 -‐5 -‐5 -‐5 Aug-‐14 Sep-‐14 Oct-‐14 Nov-‐14 Dec-‐14 Jan-‐15 Feb-‐15 Mar-‐15 Apr-‐15 May-‐15 Jun-‐15 Jul-‐15 Aug-‐15 LAD Bulm
Slide 14: GB: Growing Magners Share in Growing Market
GB: Growing Magners Share in Growing Market GB | On & Off Trade – Rolling MAT Volume 12 12 11 10 7 6 5 5 4 5 3 4 4 3 3 3 3 3 3 3 2 1 2 0 0 2 -‐1 1 MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE MAT WE 07.08.10 04.09.10 02.10.10 30.10.10 27.11.10 25.12.10 2
Slide 15: Business Segments - Republic of Ireland
H1 | Business Segments -‐ Republic of Ireland (ROI) | Constant Currency Cider ROI H1 Change LAD category volume decline of 2% FY12 Const Curr. Net revenue €53.2m (8.4%) Improved brand health scores Opera7ng profit €26.3m (4.7%) Increased off trade promo7onal ac7vity driving pricing Opera7ng mar
Slide 16: Business Segments - Cider Great Britain
H1 | Business Segments -‐ Cider Great Britain (GB) | Constant Currency Magners H1 Change Magners gains share in H1 FY12 Const Curr. Net revenue €63.8m (2.3%) Volume growth of 33% in mul7ple grocers with slight growth in Opera7ng Profit €14.8m (21.3%) unit pricing Opera7ng Margin 23.2% (5.6ppts)
Slide 17: Business Segments - Cider Export
H1 | Business Segments -‐ Cider Export | Constant Currency Magners Export H1 Change New long term partnership arrangements in Australia & Canada FY12 Const Curr. Expanded infrastructure in USA Net revenue €14.2m +19.3% High levels of marke7ng investment Opera7ng profit €3.0m +66.7% Launch of
Slide 18: Business Segments - Beer
H1 | Business Segments -‐ Beer | Constant Currency Tennent’s H1 Change On trade share growth in Scotland and NI FY12 Const Curr. Pursuit of value ahead of volume in the off trade Net revenue €50.9m (5.7%) Strengthening brand health scores Opera7ng profit €12.8m +43.8% Full delivery on synergi
Slide 19: H1 Operations
H1 | Opera7ons Ac9vity Increased third party contract ac7vity Borling line reloca7on to Glasgow Outsourcing of technical services in GB Synergy plan delivery Ongoing cost and efficiency savings Managed input cost infla7on to low single digit Future Focus Group logis7cs and distribu7on foo
Slide 20: Summary
Summary Slide 20
Slide 21: H1 Review: Delivering on Objectives
H1 Review | Delivering on Objec7ves Magners GB: progress on unit pricing while holding share in growing category Ireland: hold earnings Tennent’s: progress pricing & margins and deliver on synergies Export: maintain meaningful growth momentum Opera9ons: deliver on synergies and low
Slide 22: Financial & Operational Capability
Financial & Opera7onal Capability -‐ to fulfil long-‐term ambi7ons Opportunity & Poten9al Capability Debt free Long term consumer led category growth Cash genera7ve Strength of the brands Proven M&A capability Strong market posi7ons Integra7on and opera7onal capability Experienced m
Slide 23: Appendix
Appendix Slide 23
Slide 24: C&C Business Overview
C&C Business Overview C&C Tennent’s ABI distribu9on rights Gaymer Cider Co. Other Assets • Wellpark brewery • Advances to customers Scotland • Tennent’s wholesale Non-‐exclusive on-‐trade distribu7on rights • Advances to customers Northern Ireland Packaged Non-‐transna7onal on-‐ and off-‐trade •
Slide 25: Risk Factors
Risk Factors Compe77ve threat Shif from on to off-‐trade Cider duty risk Exchange rate risk Deteriora7ng business condi7ons in core markets Slide 25
Slide 26: H1 Segmental Analysis
H1 Segmental Analysis -‐ Constant Currency Net Revenue €m H1 2011/12 H1 2010/11 Change Cider ROI 53.2 58.1 (8.4%) Cider NI 6.8 7.0 (2.9%) Cider GB 102.3 114.0 (10.3%) Cider Export 16.0 13.5 18.5% Tennent's 50.9 54.0 (5.7%) Third party brands 39.5 37.2 6.2% Total con9nuing 268.7 283.8 (5.3%) Opera9n
Slide 27: H1 2011/12 Cashflow
H1 2011/12 Cashflow H1 2011/12 H1 2010/11 Change €m €m EBIT 66.8 67.9 (2%) Amor7sa7on/deprecia7on 10.5 10.9 (4%) EBITDA 77.3 78.8 (2%) Net finance charges/taxa7on (2.1) (7.5) (72%) Changes in working capital 8.5 38.8 (78%) Excep7onal items (6.7) (4.5) 49% Opera9ng cashflow 77.0 105.6 (27%) % of EBITDA
Slide 28: C&C Group plc
www.candcgroupplc.com C&C Group ple Block 71 The Plaza, Parkwest Business Park, Dublin 12 Tel: +353 1616 1100