C&c Group Plc · LSE:CCR
C&c — H1 2007/08 Earnings Presentation
36 slides from C&c's earnings presentation, Oct 10, 2007
Slide 1: C&C Group plc 2007/08 Interim Results
C&C Group plc 2007/08 Interim Results 1
Slide 2: Presentation Agenda
Presentation Agenda ¾ Summary ¾ Financial Review ¾ Market & Brand Review ¾ Outlook ¾ Q&A 2
Slide 3: Financial Summary Aug 2007
Financial Summary Aug 2007 Amount Change* ¾ Revenue – continuing business (€m) 375.6 (0.2%) ¾ Operating profit – continuing business (€m) 67.9 (32.6%) Operating margin 18.1% (8.7 pts) ¾ Operating profit – discontinued business (€m) 5.7 (55.1%) ¾ Adjusted Earnings Per Share (cent) 17.5 (39.0%) ¾ Divi
Slide 4: Operating Overview
Operating Overview Cider ¾ Branded Cider volumes (1%) - Bulmers (7%) - Magners GB +2% ¾ Marketing Investment in Cider +53% ¾ Completed Cider Manufacturing Capacity Expansion Spirits & Liqueurs ¾ Tullamore Dew volume +22% Business Developments ¾ Completed disposal of Soft Drinks Division – sharper pr
Slide 5: Financial Review
Financial Review 5
Slide 6: 2006/7 Financial Summary - Earnings
2006/7 Financial Summary - Earnings Excluding exceptional items Aug 07 Aug 06 Growth €m €m % Revenue 375.6 376.5 (0.2%) Marketing 54.6 36.4 50.0% Marketing % of Revenue 14.5% 9.7% 4.8 Operating Profit – continuing 67.9 100.8 (33%) Operating Profit Margin 18.1% 26.8% 8.7 Finance charges (8.6) (7.8) 1
Slide 7: Cider
Cider Aug 2007 Aug 2006 Growth €m €m Revenue - ROI 105.0 113.5 (7.5%) - International 167.7 156.0 7.5% 272.7 269.5 1.2% Marketing 44.4 29.1 52.6% Marketing /Revenue 16.3% 10.8% 5.5pts Operating Profit 57.5 90.0 (36.1%) Operating Margin 21.1% 33.4% (12.3) pts 7
Slide 8: Spirits & Liqueurs
Spirits & Liqueurs Aug 2007 Aug 2006 Grow th €m €m Revenue 41.0 36.1 13.6% Marketing 9.5 6.3 50.8% Marketing /Revenue 23.2% 17.5% 5.5 Operating Profit 9.2 9.8 (6.1%) Operating Margin 22.4% 27.1% (4.7)pts 8
Slide 9: Disposal of Soft Drinks & Related Assets
Disposal of Soft Drinks & Related Assets Disposal of Soft Drinks & Related Assets 29 Aug 2007 Net Assets & Liabilities 94.1 Consideration received in Cash 249.2 Capital Gains Tax (4.5) Other Expenses (9.3) 235.4 Profit arising on disposal 141.3 Reduction in Pension Deficit €18m 9
Slide 10: Cash Flow
Cash Flow including discontinued operations Aug 2007 Aug 2006 % €m €m Change EBITDA 88.0 124.6 (29%) Capital expenditure (net) (61.4) (17.9) Working capital (16.0) (18.3) Share Based employee benefits 1.1 0.5 Operating cash flow (OCF) 11.7 88.9 (87%) OCF/EBITDA 13.2% 71% Finance Charges (6.7) (7.5)
Slide 11: Balance Sheet & Capital Structure
Balance Sheet & Capital Structure Balance Sheet Debt/EBITDA €m Net debt at 1st March, 2007 305.4(i) 1.3 Free cash flow in period (3.8) Dividends Paid 45.1 Own shares acquired 114.8 Net disposal proceeds (to date) (iii) (248.1) Other (1.6) Net debt at 31 August, 2007 211.8 1.0 (ii) (i) Excludes pensi
Slide 12: Market & Brand Review
Market & Brand Review 12
Slide 13: Irish LAD market
Irish LAD market Market Trends MAT 5 mths to Feb 07 July 07 Overall Market (i) 0.4% (1.6%) On-Trade (ii) (2.3%) (6.0%) Off-Trade (ii) 14.5% 5.0% Bulmers Market Share Volume MAT Change Share July 07 on Feb 07 Overall (i) 10.5% (0.3) On-Trade (ii) 10.6% ± Off-Trade (ii) 8.1% +0.2 (i) Rev. Commrs/C&C J
Slide 14: International Cider
International Cider Overall ¾ Magners 65% share of branded cider ¾ 2% volume growth H1 2007/8 ¾ Market Profile remains unchanged from February 07 Magners Volume FY 06/07 H1 07/08 Profile Profile Great Britain 86% 85% Northern Ireland 8% 8% USA 2% 2% Europe 4% 5% 14
Slide 15: GB On Trade – Market Trends
GB On Trade – Market Trends 6 mth period to Aug 05 Feb 06 Aug 06 Feb 07 July 07(ii) LAD market growth (i) -2.6% -2.6% -3.0% -5.7% Cider Share of lad 5.1% 5.4% 7.0% 7.2% 7.9% - Premium (iii) 0.3% 0.6% 1.6% 2.1% 2.2% - Standard 4.8% 4.8% 5.4% 5.1% 5.7% Premium share of Cider 6% 10% 23% 29% 28% Magners
Slide 16: Premium Cider (GB On-Trade)
Premium Cider (GB On-Trade) Volume growth (3 months rolling) 300 Category Magners 250 200 150 100 50 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07 Note: Category measured as Magners/HP Bulmers combined Source: Nielsen 16
Slide 17: Magners GB - Distribution
Magners GB - Distribution GB Distribution – By Outlet Type 80 2007/08 Original Target 72% 70 60 50 40 30 20 10 0 -10 -20 Managed Lease Independent Total Source: Nielsen July 2007 vs. Peak 17
Slide 18: Magners Resilience
Magners Resilience 18
Slide 19: Magners GB - Resilience
Magners GB - Resilience Rate of Sale | On-Trade: Dual Stockists 100 Magners HP Bulmers 80 60 40 20 0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 06 06 06 06 06 07 07 07 07 07 07 07 Source: Nielsen 19
Slide 20: Magners GB - Resilience
Magners GB - Resilience Distribution Magners HP Bulmers Both Total Only Only Feb 07 46 12 16 74 July 07 46 18 16 80 ¾ Magners distribution profile unchanged - Feb 07 to July 07 Source: Nielsen 20
Slide 21: Magners GB – Resilience
Magners GB – Resilience Market Share* – On trade LAD Market (%) 3.5% 3.0% Scotland 2.9% 2.5% London 2.0% 2.0% Total GB 1.5% 1.8% Rest of GB 1.0% 1.6% 0.5% July 2007 0.0% Feb 06 Jun 06 Oct 06 Feb 07 Jun 07 ¾ Upturn in share Feb – July (all regions) *3 Month rolling – On Trade Source: Nielsen 21
Slide 22: GB Premium Cider
GB Premium Cider 22
Slide 23: GB Premium Cider – Weather Impact
GB Premium Cider – Weather Impact GB – Sunshine Hours ¾ Exceptionally poor summer in 2007 ¾ Exceptionally good summer in 2006 ¾ Significant difference in weekly sunshine hours - 18 hours GB - Daily Temperatures ¾ Temperature also highlights significant year-on-year difference ¾ 2007 | 2 degrees belo
Slide 24: Premium Cider – Growth
Premium Cider – Growth Share* of LAD – On Trade 4.00% 3.00% 2.00% 1.00% Scotland Total GB *3 Months rolling 0.00% Feb 06 May 06 Aug 06 Nov 06 Feb 07 May 07 Jul 07 ¾ Premium category (Magners) now established (Consumer research) ¾ Growth continues in most developed market (Scotland) ¾ Scotland/GB gap
Slide 25: Magners GB – Off Trade
Magners GB – Off Trade Half Year to 31 August 2007 Last Year This Year Cider growth (yoy) 21% Premium cider growth (yoy) 77% Premium cider share of category 13% 19% Magners share of premium 40% 44% ¾ Premium segment accounts for half of category growth ¾ Magners share improvement – constrained by co
Slide 26: Magners GB Off Trade Premium Cider
Magners GB Off Trade Premium Cider Brand Share Magners Other 35% Magners HP Bulmers 44% Other HP Bulmers 21% Nielsen 24 weeks to 8/9/07 Retail price per litre £ 2.75 2.50 Magners - 19% above other 2.25 2.00 premium ciders 1.75 1.50 1.25 1.00 Nielsen 12 weeks to 8/9/07 Other Premium Magners 26
Slide 27: Magners European Test Markets
Magners European Test Markets Test Markets ¾ Munich ¾ Barcelona Findings (common to both) ¾ Extensive range of learnings ¾ Positives on consumer response – Taste – Product quality – Relevance ¾ Challenges exist – Heavy advertising is not a driver of distribution – Maintaining brand presence Slow bur
Slide 28: Magners Strategy
Magners Strategy ¾ Premium position – high level of consumer media – Evolution of creative execution (communications) ¾ Strengthen competitive response ¾ Probe brand potential in additional markets 28
Slide 29: Spirits & Liqueurs
Spirits & Liqueurs ¾ Tullamore Dew maintaining strong growth Brand Shipment Depletions Growth Trend (i) across a range of markets Carolans 5% (11%) ¾ Carolans overshipment Tullamore Dew 22% +31.6% Frangelico (7%) (7%) Total 8% +7% (i) Company estimates for half year (depletions are sales by Distribu
Slide 30: Outlook
Outlook 30
Slide 31: H2 Outlook
H2 Outlook ¾ Cider – Revenue down on year ago – Margin up on H1 ¾ H1/H2 profit profile ¾ Spirits & Liqueurs: Full year decline – Marketing Investment ¾ Evolution of marketing strategy ¾ Cost reduction 31
Slide 32: Q&A and 2007/8 IR Calendar
Q&A 2007/8 IR Calendar ¾ Q3 Management Statement [20] December 2007 ¾ FY07/08 Pre-close February 2008 32
Slide 33: Appendix
Appendix 33
Slide 34: GB Average Weekly Sunshine Hours
5h 15 h 25 h 35 h 45 h 55 h 65 h Jul-05 Aug-05 Source: UK Met Office Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 GB Sunshine Hours Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 GB Average Weekly Sunshine Hours Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 34
Slide 35: GB Average Daily Maximum Temperature
5C 10 C 15 C 20 C 25 C 30 C Jul-05 Aug-05 Source: UK Met Office Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 GB Daily Temperature Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 GB Average Daily Maximum Temperature Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 35
Slide 36: C&C Group plc contact details
C&C Group plc P +353 1 616 1100 Kylemore Park F +353 1 616 1163 Dublin 10 E C&[email protected] Ireland W www.candcgroupplc.ie 36