C&C Group plc p p 2010/11 First Half Results October 2010
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 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. Any statement in this presentation which infers that the transactions may be earnings accretive does not constitute a profit forecast and should not be interpreted to mean that the Company’s earnings or net assets in the first full financial year following the transactions, nor in any subsequent period, would necessarily match or be greater than those for the relevant preceding financial year. b d ld l h b h h f h l d f l Your attention is drawn to the risk factors set out in the Appendix to 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 and/or the recently acquired businesses There may be other risks which may have an adverse effect on associated with the Company and/or the recently acquired businesses. There may be other risks which may have an adverse effect on the business, financial condition, results or future prospects of the Company. C&C Group plc Slide 2
2010/11 H1 | Presentation Agenda 1 1. Performance Overview Performance Overview 2. Financial Review & Outlook 3. Segmental Review 4. Q&A C&C Group plc Slide 3
2010/11 Objectives Corporate & Financial Objectives | 2010/11 � Continue to build on momentum of Magners in GB � Protect Bulmers earnings position in Ireland � Protect Bulmers earnings position in Ireland � Integrate and deliver synergies from acquired businesses � Lay foundation for international development of cider � Capital structure and free cash flow to deliver strategic objectives p g j C&C Group plc Slide 4
2010/11 First Half | Performance Overview - Constant Currency Constant Currency Volumes H1 H1 Change � Magners cider volumes in growth at 1.6% khl 2011 2010 % Magners GB returned to growth at 0.7% Magners GB returned to growth at 0.7% Magners export volumes +34.4% Bulmers 296 307 (3.4%) Magners 567 558 +1.6% � Net revenue increased 73.0% to €305.5m and operating profit has increased by 29.4% to €63.4m Original Cider Original Cider 880 880 883 883 (0.3%) (0.3%) Gaymers 958 - - � Original cider business net revenue declined 5.3% Operating profit declined by 1.8% Tennent’s Lager 820 - - Operating margin improved 1.2 points to 33.2% Operating margin improved 1.2 points to 33.2% Operating H1 H1 Change Profit €m 2011 2010 % � Operating profit contribution from acquired businesses of €15.6m in line with expectations Original cider 47.9 48.8 (1.8%) Distribution (0.1) 0.2 - � Free cash flow of €93.8m representing 119% of EBITDA Tennent’s 12.6 - - � Adjusted diluted EPS increased 10.8% to 15.4 cent djusted d uted S c eased 0.8% to 5. ce t Gaymers y 3.0 - - Total 63.4 49.0 29.4% � Interim dividend increased 10% to 3.3 cent per share Discontinued 4.5 4.9 - Total 67.9 53.9 - C&C Group plc Slide 5
2010/11 First Half | Business Drivers Corporate Disposal of Spirits & Liqueurs Completion of business & IT systems integration C l ti f b i & IT t i t ti On track to deliver €8m of synergies in 2010/11 Ireland New pricing on pint bottle and draught L Launch of Bulmers Berry and new advertising h f B l B d d ti i New beer portfolio Great Britain New Magners advertising G Gaymers integration & formation of single sales force i i & f i f i l l f Cider duty changes in period Scotland New Tennent’s advertising & Football Sponsorship Integration successfully completed Launch of Magners Golden Draught Northern Ireland Number 2 position in lager Integration successfully completed Rest of World Accelerated cider volume growth C&C Group plc Slide 6
2010/11 First Half | Business Overview Volume Operating 2% profit profit 10% 7% 7% 14% 14% 16% 42% 34% 3% 2% 3% 3% 2% 29% 29% Bulmers ROI Magners GB Magners NI Magners ROW Tennent's Gaymers & other ciders Third party brands Bulmers and Magners represent 30% of C&C volumes and 77% of operating profit Note: Operating profit after allocation of Group overheads C&C Group plc Slide 7
2009/10 Performance Overview - Republic of Ireland | Cider Republic of Ireland | Cider LAD market growth driven by off-trade lager and promotional activity around the World Cup beer World Cup beer Source: ACNielsen Data to Aug 2010 C&C Group plc Slide 8
2009/10 Performance Overview - Great Britain | Cider Great Britain | Cider Magners’ recovery to MAT growth of 1% at August 2010 – continue to target growth in line with the market by the year-end growth in line with the market by the year end Source: ACNielsen & CGA Data to 7/8/2010 C&C Group plc Slide 9
2009/10 Performance Overview - Scotland | Lager Scotland | Lager Tennent’s challenged by low value position for retailer Source: ACNielsen & CGA Data to 7/8/2010 C&C Group plc Slide 10
2009/10 Performance Overview - Scotland | On-Trade Lager Scotland | On Trade Lager Tennent’s continues to outperform Source: ACNielsen & CGA Data to 7/8/2010 C&C Group plc Slide 11
Performance Review � Core markets of Ireland and the UK remain unpredictable and challenging � UK cider category remains in growth and Magners has returned to modest volume growth � Successful integration of Tennent’s and Gaymers and a good first half performance for both businesses � Cider ROW starting to show accelerated growth � Strengthened position in the long alcohol drinks sector positions C&C to continue � Strengthened position in the long alcohol drinks sector positions C&C to continue to drive Magners recovery � C&C confident of delivering market consensus for operating profit in the range of g p g p g €102-€106m for the financial year 2010/11 C&C Group plc Slide 12
2010/11 H1 Financial Review C&C Group plc Slide 13
2010/11 H1 | Financial Summary - Constant Currency Constant Currency � Gross revenue increased by 106.7% to €451.6m � N t � Net revenue increased by 73.0% to €305.5m i d b 73 0% t €305 5 � Original cider net revenue (excluding acquisitions) declined by 5.3% to €144.3m � Operating profit increased by 29.4% to €63.4m (excluding €4.5m from disposal of Spirits) � Original cider operating profit (excluding acquisitions) declined by 1.8% to €47.9m � Acquisitions contributed €15.6m: Tennent’s €12.6m and Gaymers €3m � Discontinued (Spirits) businesses generated €4.5 million in the period � Operating margin (as % of net revenue) declined by 6.9% percentage points to 20.8% � Original cider operating margin improved by 1.2 points to 33.2% � Tennent’s & Gaymers operating margin of 17 4% and 6 0% respectively in the period (before allocation of � Tennent s & Gaymers operating margin of 17.4% and 6.0% respectively in the period (before allocation of Group overheads) � Exceptional free cash flow in the period of €93.8m representing 119% of EBITDA � One-off timing benefit of €31m ABInBev cash flow � Free cash flow and disposal proceeds eliminated net debt – net cash of €20.8m at 31 August 2010 C&C Group plc Slide 14
H1 2010/11 Income Statement - After exceptional items After exceptional items H1 2010/11 H1 2009/10 Change Change C Const. currency €m €m Net revenue 305.5 181.4 +68.4% +73.0% Operating costs p g (246.0) ( ) (126.7) ( ) +94.2% +96.2% Operating profit 59.5 54.7 +8.8% +16.2% Net finance charges (4.8) (2.6) +84.6% - Profit before tax 54.7 52.1 +5.0% - Tax (7.7) (5.4) +42.6% - Effective tax rate 14.1% 10.4% Discontinued Operations 229.1 5.2 Profit for the period Profit for the period 276 1 276.1 51 9 51.9 +432 0% +432.0% - C&C Group plc Slide 15
2010/11 H1 Revenue Performance - Net revenue Net revenue €m +82.0% 82.0% €305.5m €305.5m €181.4m (0.3%) (4.3%) (2.9%) (6.1%) €156.7m Price/mix and currency are the main drivers for a decline in original cider sales C&C Group plc Slide 16
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