C&C Group Plc Trading Statement

 
TIDMCCR 
 
 

C&C Group Plc

("C&C" or the "Group")

Period end trading update for the 12 months ended 28 February 2018

Dublin, London | 13 March, 2018: C&C Group plc, the manufacturer, marketer and distributor of branded cider, beer, wine and soft drinks, today issues its period end trading update for the 12 months to 28 February, 2018 ("FY18"). Preliminary results for FY18 will be announced on 16 May, 2018.

Summary

 
 
    -- Despite weather-related disruption, trading and cash generation was 

broadly in line with management expectations

 
    -- Group operating profit is anticipated to be around EUR86 million for the 

full year, with Admiral Taverns contributing an additional EUR1.1

million to Group earnings

 
    -- Cash conversion is expected to be within our guidance range at c.60% 

of EBITDA

 
    -- Tennent's in Scotland and super-premium brands grew revenues strongly 
 
    -- Magners returned to volume growth with momentum building through the 

first year of our cider distribution partnership with AB InBev

 
    -- Resilient trading in off-trade and on-trade packaged in Ireland, but 

competitive pressures in draught remain intense

 
    -- Currency translation of c. EUR3 million and one-off impacts relating to 

the new AB InBev arrangements negatively impacted full year

profitability

Market Review

In Scotland, Tennent's grew share in the important IFT and retail channels in the second half, outperforming the overall GB beer market which declined -2%1. Net sales revenues for Tennent's are expected to be +3% for FY18 (FY17: -4%). Our wholesale business in Scotland is also performing strongly growing volumes +2% (FY17: -4%), revenues and share in FY18.

Our expanded distribution agreement with AB InBev for our cider portfolio in the UK gathered momentum in the second half. Magners was +9% in the second half (H1: -6%) benefitting from the launch of Magners Dark Fruit, increased participation in major retailers' Christmas promotions and incremental on-trade and wholesale distribution. Magners will post flat volumes for the full year FY18 (FY17: +13%) against a GB cider market that was also flat2.

In Ireland, the trading environment remains highly competitive, both within long alcoholic drinks and from other categories. Bulmers (incl. Outcider) grew volumes and share in the off-trade and maintained share in the packaged on-trade segment. In an overall cider category that declined -1%3, Bulmers brand volumes were down c.-6% for FY18 (FY17: +3%) reflecting the loss of on-trade draught distribution points. As highlighted in our first half results, revenues and profitability in Ireland were also negatively impacted by reduced volumes in our wholesale business and the reversion of certain customers to direct supply from AB InBev.

Our super-premium portfolio made further progress across all our domestic markets in the second half. Volumes will exceed 100kHL in FY18, representing c.4% of Group branded volumes. Organic volume growth from brands such as Menabrea and Heverlee, increased +41% for full year FY18 (FY17 +60%). In addition, we saw strong first year contributions from our recently acquired craft brands 5Lamps in Ireland and Orchard Pig in the UK.

In Export territories volume growth is expected to be +2% (FY17: +4%) for FY18. Good growth in Magners and Tennent's in Asia Pacific was off-set by slower growth in cider in Europe attributable to increased parallel import activity and supply chain disruptions in our nascent African business.

In the US, Magners and Wyders stabilised through the course of FY18, while Woodchuck and our other national brands lost volume and share, reflecting an overall cider category in high single-digit decline. In February 2018, we announced that our US subsidiary Vermont Hard Cider would resume full responsibility for the sales and marketing of the Group's cider portfolio in the US.

Cash and balance sheet

Cash generation remains robust, with cash conversion for FY18 expected to be within our long term guidance range at c.60% of EBITDA (FY17: 53%).

During the year we made a EUR42 million investment in the UK on-trade through Admiral Taverns and invested a further EUR12 million on our craft brand portfolio. In addition, we returned EUR73 million to shareholders through a combination of share buy-back and dividends.

Outlook

The performance of our Scottish businesses and our growing super-premium portfolio has been encouraging in FY18 and both are well positioned to deliver further value growth in FY19. The introduction of minimum unit pricing of alcohol in Scotland this year may result in some short-term market disruption, but longer term will bring value to the category. While competitive pressures remain in Ireland, we expect performance to improve next year. In the UK, our strengthened route-to-market platforms of Admiral Taverns and AB InBev are now well-embedded. The outlook for the UK high street and consumer spending remains challenging but our brands and the predominantly wet-led, community pubs we serve are proving resilient.

1. GB on and off-trade beer volumes (CGA and Nielsen) - 12 mth MAT to 31 December(CGA)/January(Nielsen) 2017/182. GB on and off-trade cider volumes (CGA and Nielsen) - 12 mth MAT to 31 December(CGA)/January(Nielsen) 2017/183. ROI on and off-trade cider volumes (Nielsen Ireland databases) - 12mth MAT to 31 December 2017

-ENDS-

Contacts

C&C Group plcStephen Glancey, Chief ExecutiveJonathan Solesbury, Chief Financial OfficerJoe Thompson, Investor RelationsTel: + 44 7980 844 580

Investors, Analysts & Irish MediaMark Kenny/Jonathan NeilanFTI ConsultingTel: [phone]Email: [e-mail]

UK & International MediaTim RobertsonNovella CommunicationsTel: [phone]Email: [e-mail]

View source version on businesswire.com: http://www.businesswire.com/news/home/20180313005386/en/

 
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(END) Dow Jones Newswires

March 13, 2018 03:00 ET (07:00 GMT)