CCR: C&C Group PLC: Final Results

  CCR: C&C Group PLC: Final Results

UK Regulatory Announcement


                                C&C GROUP PLC


Dublin, London, 15 May 2013: C&C Group plc (‘C&C’ or the 'Group’), a leading
manufacturer, marketer and distributor of branded cider and beer today
announces results for year ended 28 February 2013.

Financial Highlights

  *Operating profit before exceptional items increased 2.4% to €113.9m
  *Group operating margin^(i) of 23.9%, up 0.8ppts on prior year
  *Net revenue ^ declined 0.8% to €476.9m
  *Net debt^(ii) of €123.4m at the year end giving a leverage ratio to
    EBITDA^(iii) of 0.9x
  *Adjusted diluted Earnings Per Share^(iv) (EPS) for continuing operations
    increased 0.4% to 27.7 cent
  *Proposed final dividend increase of 5.6% to 4.75 cent per share,
    delivering 7.1% growth in full year dividend to 8.75 cent per share

Operating Highlights

  *Resilient performance of Group despite difficult trading environment in
    United Kingdom (UK) and Republic of Ireland (ROI)
  *Strong Tennent’s performance helping to offset challenging core cider
  *Caledonia Best is now the fastest growing beer brand in the Scottish
    on-trade; over the last year it has reached No.2 position in the smooth
    draught ale category according to CGA
  *Stable trading in the second half of the year in ROI
  *International volume growth of 55.2%, including acquisitions, representing
    9.6% of total branded volumes
  *Tennent’s demonstrating meaningful international potential in first full
    year of trading
  *Robust cost control and operational efficiency improvements helping to
    protect margins

Strategic Highlights

  *Announced and completed the acquisition of Vermont Hard Cider Company, LLC
    (VHCC), the leading US craft cider company, for a gross consideration of
    US$305.0m (€230.9m). The new business contributed €1.8m of operating
    profit since completion on 21December 2012
  *Completion of an accelerated integration of the Magners USA commercial
    infrastructure into the VHCC business
  *Announced the acquisition of the Gleeson Group, a leading supplier and
    distributor of beverages in Ireland, for an enterprise value of €58.0m.
    The deal successfully completed on 7 March 2013
  *Creation of the Shepton Mallet Cider Mill trading division after the year
    end to support the development of regional, craft and specialist cider
    brands such as Addlestones, Blackthorn and Olde English
  *Significant on-trade loan activity (€16.7m incremental investment) in core
    markets in response to growing customer demand

(i)Before exceptional items
(ii)Net debt comprises cash and borrowings, net of issue costs (€2.2m). See
note 10 to condensed financial statements.
(iii)EBITDA is earnings before exceptional items, interest, tax,
depreciation and amortisation charges. A reconciliation of EBITDA to operating
profit is provided on page 12.
(iv)See Note 8 to condensed financial statements.


Stephen Glancey, C&C Group CEO, commented

“Our results are in line with stated guidance and while it has not been an
easy year for our core cider brands, with poor weather and increased
competition, particularly in the UK, the second half did bring some trading
stability in Ireland. We have had an excellent contribution from the Tennent’s
brand both in domestic and international markets providing some balance to the
increased competition within UK cider.

Our International business delivered strong growth with volumes increasing by
over 55% in the year.

The period was defined by two significant investments. In the USA we acquired
the Vermont Hard Cider Company, increasing the Group’s exposure to an emerging
category in a major potential market. Then in Ireland, just after the year
end, we acquired the leading wholesaler Gleesons. This demonstrates our long
term belief in Ireland as a place to invest and gives C&C a platform for
domestic growth for the first time in many years.

Our operating model remains decentralised with local management sharply
focused on local consumers and customers. In the US we are pleased to have
retained the services of Bret Williams and Dan Rowell and have re-established
a local board structure comprising management and non-executives with deep
industry experience to provide oversight and governance.

In our domestic markets we continue to develop multi-beverage capability
investing in customers and providing support through a trade lending model,
advancing €16.7m in the year. The creation of the Shepton Mallet Cider Mill
trading division is a positive step towards capitalising on the latent
potential of the Gaymers portfolio and will be an important feature in the
next phase of cider growth.

A fundamental tenet of C&C is to completely align the interests of our
employees with shareholders, and senior management are incentivised mainly
through equity based reward. While no bonus was paid to Directors this year,
43% of our employees at local level were rewarded for performance with an
average payment of €2,700. We are also proud of the fact that over 50% of our
employees are participating in our partnership share scheme. To support
further equity, Executive Directors are waiving their FY2014 share incentive
awards for re-distribution to operating management within the business. We
believe this to be in the long term interests of all shareholders.

C&C has a resilient business model focused on value creation through strong
brand market combinations. We have made significant investment this year aimed
at strengthening our business in both new and existing markets.

FY2014 will inevitably be a transition period as we integrate our recently
acquired businesses. C&C will continue to deliver earnings growth to sustain
long term growth objectives.”

About C&C Group plc

C&C Group plc is a leading manufacturer, marketer and distributor of branded
long alcoholic drinks. The Group manufactures Bulmers, the leading Irish cider
brand, Magners, the premium international cider brand, the Gaymers cider range
of branded and private label ciders and the Tennent's beer brand. C&C Group
also owns Woodchuck and Hornsby’s, two of the leading craft cider brands in
the United States. The Group also distributes a number of beer brands in the
Scottish, Irish and Northern Irish markets, primarily for Anheuser-Busch

Note regarding forward-looking statements

This announcement includes forward-looking statements, including statements
concerning current expectations about future financial performance and
economic and market conditions which C&C believe are reasonable. However,
these statements are neither promises nor guarantees, but are subject to risks
and uncertainties, including those factors discussed on pages 15 to 16 that
could cause actual results to differ materially from those anticipated.

Conference Call Details - Analysts & Institutional Investors

C&C Group Plc will host a presentation for analysts and institutional
investors, today, 15 May, at 08.30amBST (03.30am ET)at Davy, Level 13,
Dashwood House, 69 Old Broad Street, London EC2M 1NA

Live presentation and Q&A session also available via conference call on:

   Ireland        +353 1 436 4265
      UK & Europe       +44 208 817 9301
      USA               +1 718 354 1226

Management will host a second conference call today, for analysts and
institutional investors, at 14.30pmBST(09.30am ET) which you can also access
using the dial-in details below.

   Ireland        +353 1 436 4265
      UK & Europe       +44 208 817 9301
      USA               +1 718 354 1226

Conference Call Details - Media

Management will host a newswire conference call today at 07.15 BST which can
be accessed using the dial-in details below.

   Ireland        +353 1 436 4265
      UK & Europe       +44 208 817 9301

Management will also host a conference call for media today at 10.45 BST which
can also be accessed using the dial-in details below.

   Ireland        +353 1 436 4265
      UK & Europe       +44 208 817 9301

For all conference call replay numbers, please contactFTI Consulting.


  *C&C Group plc: Alan Daly | Head of IR | Tel: +353 1 654 6239, Email:
  *Investors & Analysts: Mark Kenny/Jonathan Neilan | FTI Consulting | Tel:
    +353 1 663 3686, Email:
  *Media Dublin: Paddy Hughes | Drury | Tel: +353 1 260 5000 | Email:
  *Media London: Robert Ballantyne/Shanshan Willenbrock | Cardew Group | Tel:
    +44 20 7930 0777, Email:

(before             FY2013    FY2012                        
                    Volume       Volume
Volumes             kHL          kHL            %
- ROI               615          622            (1.1%)
- Cider – UK        1,216        1,430          (15.0%)
- Tennent’s         1,294        1,375          (5.9%)
-                   326          210            55.2%
- Third Party       871          896            (2.8%)
Brands UK
TOTAL Volumes       4,322        4,533          (4.7%)
TOTAL Volumes       4,279        4,533          (5.6%)
(ex VHCC)
TOTAL Volumes       3,406        3,591          (5.2%)
                    FY2013       FY 2012                      Constant currency
                                 Reported                     ^(i)
Including           €m        €m          %          €m       %
VHCC                                            change                    change
Net Revenue         476.9        480.8          (0.8%)        504.6       (5.5%)
EBITDA ^(iii)       135.6        131.5          3.1%
Operating           113.9        111.2          2.4%          113.4       0.4%
Operating           23.9%        23.1%          0.8ppts       22.5%       1.4ppts
Net Revenue         470.5        480.8          (2.1%)        504.6       (6.8%)
Operating           112.1        111.2          0.8%          113.4       (1.1%)
profit ^(ii)
Operating           23.8%        23.1%          0.7ppts       22.5%       1.3ppts
                    Cent         Cent
Earnings per        27.0         29.4
Basic               28.3         28.3
Earnings per
Diluted             27.7         27.6
Earnings per
Dividend per        8.75      8.17        7.1%               

C&C is reporting net revenue of €476.9m, operating profit^(ii) of €113.9m and
adjusted diluted EPS^(iv) of 27.7 cent. On a reported basis this represented a
year-on-year net revenue decline of 0.8% but an operating profit^(ii) increase
of 2.4%. Operating margins improved 0.8ppts to 23.9%. The reported numbers
benefited from a strengthening of sterling that improved the effective
exchange from €1:£0.87 to €1:£0.81. On a constant currency^(i) basis, net
revenue declined by 5.5% and operating profit improved by 0.4%. The reported
numbers incorporated two months’ trading contribution from VHCC, acquired in
December 2012. VHCC contributed €6.4m of net revenue and €1.8m of operating
profit in the period since completion to 28 February 2013.

Total branded volume for beer and cider was down 5.2% year-on-year (6.3%
excluding VHCC). Following a poor first half in Ireland, the second half of
the year was relatively stable for the Bulmers business with cider volume
growth of 1.1% over the last six months. In the UK, the increased intensity of
competition within the category has shown little sign of easing and Magners’
volume for the year was disappointing. The Tennent’s brand continued to
impress with domestic market share growth in high margin channels and an
encouraging contribution from international. International ciders, including
the recently acquired Woodchuck brand, were up 42.0% year-on-year. On a
constant currency basis^(i), the net revenue decline of 6.8% (excluding VHCC)
was broadly in line with the decline in volume. Price/mix effect on revenue
was relatively neutral. Ongoing domestic pricing pressure on the core cider
brands of Bulmers and Magners was offset by a 12.7% improvement in achieved
pricing for Tennent’s in the UK.

The improvement in operating margin was largely attributable to overhead cost
control and the decision to hold back on brand investment behind Magners in
the UK. The weak consumer market for cider combined with increased competition
in the category suggested that heavy above-the-line-consumer marketing
investment in Magners would not have been effective. Despite the reduced
marketing investment, all core brands in our portfolio remain in good health.
The €16.7m investment in trade lending highlights our belief that a
distribution push model can be a valid alternative to the traditional consumer
pull advertising model in the right climate, albeit growth in the loan book
does require a short term reduction in cash conversion. The balance sheet
remains in robust health with a net debt to EBITDA ratio of less than 1x at
the year end. The Group ended the year with net debt^(v) of €123.4m.

(i)On a constant currency basis, constant currency calculation is set out on
page 14
(ii)Before exceptional items
(iii)EBITDA is earnings before exceptional items, interest, tax,
depreciation and amortisation charges. A reconciliation of EBITDA to operating
profit is provided on page 12
(iv)See Note 8 to condensed financial statements.
(v)Net debt comprises cash and borrowings, net of issue costs (€2.2m). See
note 10 to condensed financial statements.


Republic of Ireland (ROI)

Constant Currency^(i)                FY2013    FY2012    Change
                                     €m        €m        %
Revenue                              133.8        142.5        (6.1%)
Net revenue                          92.2         101.4        (9.1%)
- Price /mix impact                                            (8.0%)
- Volume impact                                                (1.1%)
Operating profit                     38.5         43.7         (11.9%)
Operating margin (Net revenue)       41.8%        43.1%        (1.3ppts)
Volume – (kHL)                       615       622       (1.1%)

LAD category^(ii): Retail sales volume of Long Alcohol Drinks (LAD) in ROI
declined by 2% in the 12 month period to the end of February 2013. The trend
in overall consumption remains reasonably predictable, within the range of
level to minus 2% over the last few years. However, there has been a notable
slowing of volume shift from the on-trade to the off-trade. In the 12 months
to the end of February 2013, LAD volume in the on-trade declined by 3% whilst
the off-trade declined by 1%. The 2ppt differential represents a significant
narrowing of the gap in channel performance. In the three months to April, the
on-trade outperformed the off-trade when measured by sales trend, despite
on-trade wholesale price increases on the market leading brands for the first
time in several years.

Over the 12 months to January 2013, the growth in cider total volume sales
outperformed the growth in beer total volume sales, with growth of 1%
achieved. The channel of trade differential is more marked for cider with a
strong performance in off-trade (volume +6%) in part attributable to expansion
of the value category.

Total ROI: Following on from first half financials dominated by poor summer
weather and its impact on cider consumption, trading stabilised in the second
half of the financial year. LAD volume in ROI for the Group was up 1.5% in the
second half compared with a decline of 3.2% in the first half. At the same
time, rate of price/mix deflation improved from 9.1% in the first half to 6.2%
in the second. In a market down 2% in the 12 months to January 2013, the Group
picked up some modest volume share growth.

Net revenue for the full year declined 9.1%. The relative growth of beer
within the portfolio has had a small impact on average revenues. However the
price mix deflation of 8.0% is split fairly evenly between the effects of
channel weighting of cider volume sales and price promotional activity to
support the portfolio in the off-trade.

Operating profit^(i) declined 11.9% to €38.5 m with margin down 1.3ppts to
41.8%. In the second half, operating profit was stable year-on-year.

Cider ROI: Net revenue was down 10.8% in the year with volume accounting for
3.2% of the decline and price/mix a further 7.6%. Over half of the price mix
deflation was attributable to channel weighting with Bulmers enjoying good
market share growth in the off-trade. Pricing in the on-trade was level for
Bulmers. In the off-trade, promotional activity and the growth of our value
cider brands reduced average pricing, albeit by a lower amount than in
previous years.

The brand health of Bulmers remains strong. Effective advertising campaigns
and sponsorship events during the year helped keep the brand vibrant and front
of mind for consumers. In FY2014, a fresh TV campaign has just been launched
for Bulmers.

Beer ROI: The Group’s beer portfolio continued to perform well in ROI with
volume growing 11.1% in a beer market^(ii) that declined by 2% in the same
period. Volume of C&C ‘owned’ brands, Tennent’s Lager and Caledonia Smooth,
grew 25.6%. Beer now represents 16.3% of the portfolio volume in ROI.

(i)On a constant currency basis, constant currency calculation is set out on
page 14
(ii)Per Nielsen data

Cider – United Kingdom (UK)

Operations Review

                                     Cider UK
Constant Currency^(i)                FY2013    FY2012    Change
                                     €m        €m        %
Revenue                              195.8        232.8        (15.9%)
Net revenue                          137.8        172.6        (20.2%)
- Price /mix impact                                            (5.2%)
- Volume impact                                                (15.0%)
Operating profit                     30.9         36.6         (15.6%)
Operating margin (Net revenue)       22.4%        21.2%        1.2ppts
Volume – (kHL)                       1,216     1,430     (15.0%)

Cider category^(ii): The GB cider category experienced its first volume
decline in almost a decade, falling by 2% as poor weather depressed home
consumption in the key summer months. Despite the heavy promotion of the
category by retailers and brand owners, off-trade volume declined 4% in the
year to March, in line with beer. There were positives, however, in the value
growth of cider in the off-trade and in the on-trade category trend. Value
grew by 2% in the off-trade, outstripping LAD by over 2ppts and illustrating
the continued premiumisation of the category from a retailer/consumer
perspective. In the on-trade, cider volume growth remained in positive
territory, up 1% year-on-year and 5ppts ahead of LAD. Packaged variants in the
fridge enjoyed a good year with flavoured ciders delivering much of the growth
at the expense of standard draught.

The health of the category was further validated by a number of new entrants
during the course of the year. There was a significant level of investment
behind brand launches and range extensions and there is no doubt that
competition in the space intensified as a consequence.

Cider UK:  There was little improvement  in the second half, following a
challenging first six months. The rate of volume decline improved from 18.6%
at the end of August to 15.0% for the full year but the price/mix effect still
left net revenues down 20.2%. Operating profit^(i) declined by 15.6% to
€30.9m. Operating margin^(i) improved by 1.2ppts, reflecting the decision
taken earlier in the year to hold back on marketing investment given the
dynamics of the trading environment for the category.

Magners UK: The Magners brand underperformed the market with volume declining
13.9%. Key summer events, such as the European Football Championships and
Olympic Games, failed to deliver any volume uplift. In contrast to last year,
Magners saw a significant reduction of share across Grocery promotional deals,
impacting volume negatively through the year. While trading began to stabilise
toward the end of the financial year as the new retailer trading plan cycle
kicked in and comparatives eased, we expect that increased competition will
bring another challenging year of trading.

The Magners brand remains in good health, supported by a brand investment
level in FY2013 equating to a very competitive double-digit % of net sales
revenue. As with Bulmers in Ireland, it is the intention to invest behind a
fresh advertising campaign for the brand in FY2014.

Gaymers Branded Portfolio:  The Gaymers branded portfolio, including Gaymers
Original, Blackthorn and Olde English declined by 16.4% in the period, as
standard cider lost ground to premium cider and fruit flavoured variants. The
launch of Gaymers fruits enjoyed some success and slowed the overall decline
but the brand is a relatively small component part of the ‘non Magners’
portfolio. Post the end of the the financial year, the Shepton Mallet Cider
Mill trading division was created, as a separate business division within the
Group, with its own dedicated sales and marketing infrastructure, the new
division will focus on the development of regional, craft and specialist cider
brands within the UK cider portfolio. It is anticipated that authenticity and
craft heritage will become key features of the cider category development over
the next few years.

(i)On a constant currency basis, constant currency calculation is set out on
page 14
(ii)Per CGA/Nielsen data

Tennent’s UK

Operations Review

                                     Tennent’s UK
Constant Currency^(i)                FY2013    FY2012    Change
                                     €m        €m        %
Revenue                              229.3        223.5        2.6%
Net revenue                          108.9        102.0        6.8%
- Price /mix impact                                            12.7%
- Volume impact                                                (5.9%)
Operating profit                     30.3         22.5         34.7%
Operating margin (Net revenue)       27.8%        22.1%        5.7ppts
Volume – (kHL)                       1,294     1,375     (5.9%)

UK beer^(ii): Market data to end of February suggested a decline of 4% in beer
volumes in Scotland. Volume held up better in the on-trade with a decline of
2% comparing favourably to an off-trade that was down 6% year-on-year. Value
was up 1% for the market in the period. Robust market data are not available
for the market in Northern Ireland.

Tennent’s UK: Tennent’s, including Caledonia Best, delivered a very robust set
of financials in a challenging environment. Volume decline of 5.9% was broadly
in line with the market but the substitution of low margin volumes with more
profitable channels deals contributed to net revenue^(i) growth of 6.8% for
the year. There were a number of features behind the 12.7% positive price mix
impact including reduced promotional activity in the off-trade, some moderate
premiumisation of the portfolio and the re-negotiation of low margin legacy
contracts. Operating margin^(i) continued to expand with improved pricing and
robust cost control growing margin by 5.7ppts. Marketing investment behind the
brands remained highly competitive and double digit as a percentage of net
sales revenue. The Tennent’s brand is in good health in all of its

Tennent’s Scotland:  Tennent’s Lager volume sold to the Independent Free Trade
(IFT) and Local Multiple segments of the on-trade grew by 3.3% in the year,
delivering market share growth. Distribution improved for the brand in these
segments, supported by a net £11.5m incremental investment in trade lending,
good brand support and a sensible approach to pricing in a tough environment
for retailers and consumers.

The Group invested to sustain growth in Caledonia Best during the year.
Distribution now stands at around 1,400 outlets with a solid presence in the
IFT. Above the line support for the brand was introduced via a TV campaign in
the second half of the financial year and further support is planned for
FY2014. The brand is enjoying some momentum. Share of Ale in the IFT reached
4.5% for the year and data for the last 13 weeks of the year suggest share has
grown to 7.6%.

Caledonia Best is now the fastest growing beer brand in the Scottish on-trade;
over the last year it has reached No.2 position in the smooth draught ale
category according to CGA. The success of Caledonia Best, and the relative
outperformance of Magners in Scotland compared with England & Wales, serves to
highlight the attractivness of further diversification into multi-beverage in

Tennent’s NI: In Northern Ireland Tennent’s remains competitive within a weak
on-trade market. The C&C portfolio, including third-party brands, was down
8.0% for the period in a market believed to have declined by over 10%. Net
investment in trade lending increased by €0.3m in the year. The low level of
churn in pub ownership serves to highlight the difficulties facing the

(i)On a constant currency basis, constant currency calculation is set out on
page 14
(ii)Per CGA/Nielsen data


Operations Review

Constant Currency^(i)                FY2013    FY2012    Change
Including VHCC                       €m        €m        %
Revenue                              48.5         31.9         52.0%
Net revenue                          47.8         31.8         50.3%
- Price /mix impact                                            (4.9%)
- Volume impact                                                55.2%
Operating profit                     9.1          6.8          33.8%
Operating margin (Net revenue)       19.0%        21.4%        (2.4ppts)
Volume – (kHL)                       326          210          55.2%
Excluding VHCC                       €m           €m           %
Net Revenue                          41.4         31.8         30.2%
Operating profit                     7.3          6.8          7.4%
Operating margin (Net revenue)       17.6%        21.4%        (3.8ppts)
Volume – (kHL)                       283       210       34.8%

International:  Strategically,  FY2013 should prove to be a significant year
for the development of an international business within C&C. The acquisition
of the Vermont Hard Cider Company (VHCC) in December was an exciting move.
VHCC owns a leading US cider brand in Woodchuck, a well-invested cidery in
Vermont and has a national distribution network. The US cider category is
currently enjoying strong growth and VHCC provides a great platform to tap
into the longer term potential of this emerging market. In doing so, it
reduces the exposure of C&C to the more challenging cider category in the UK.
FY2014 should also prove to be a significant year for the export of Tennent’s.
A number of new markets for the brand were opened during the year, including
Italy, and the potential opportunity is reasonable in scale.

Operationally, the international business unit enjoyed good volume growth of
55.2% in the period as Hornsby’s, Tennent’s and Woodchuck contributed
alongside Magners. Excluding the two months worth of contribution from
Woodchuck, volume was up 34.8% and revenue^(i) increased 30.2%. International
volume accounted for 9.6% of total C&C branded volume and 14.5% of cider. A
full year contribution from Woodchuck in FY2014 will, for the first time, give
the International LAD business unit meaningful scale within C&C.

Excluding VHCC, operating margin reduced 3.8 ppts in the year. We expect this
margin to expand as we progress through FY2014 for a number of reasons. First,
the sourcing of Hornsby’s for the US market is expensive but the arrangements
are temporary in nature. Secondly, the FY2013 investment in US sales
infrastructure to support the Magners brand was made in anticipation of future
growth, temporarily increasing fixed cost ratios in FY2013. Planned capacity
expansion in Vermont will provide a permanent lower cost solution, once
completed. Operating margin on Tennent’s export volume is in line with cider
exports and the addition of Woodchuck to the portfolio should further improve
margin in FY2014.

Cider: Magners volume in FY2013 was up 3.9% on the prior year. This was some
way below the trend line of the previous few years, albeit there were specific
issues affecting the performance of the brand in the US and Australia. In the
US, the extraction of the Hornsby’s brand from the E&J Gallo business and
integration into the Magners infrastructure and distribution network proved to
be a resource hungry project. For much of the year, this served as a
considerable distraction to the focus of the front line sales team. Following
the acquisition of VHCC in December, an accelerated integration of commercial
resource is now complete and the enlarged business will be better placed to
capitalise on the opportunity presented by a stronger sales team with a
broader cider portfolio in FY2014.

In Australia, the brand suffered owing to issues with its route to market in
FY2013. The cider category remains in good growth and the Magners brand
continues to enjoy good consumer appeal but volume dropped 24% in the year.
Work continues on resolving the route to market issue and the performance of
the brand has improved in recent weeks with a return to more stable volume
year-on-year. Excluding Australia, the volume of Magners sold outside of
Ireland and the UK grew 10% in FY2013. In North America, growth of Magners was

Other international markets enjoyed solid growth with some European markets,
including France and Spain, benefitting from new distribution arrangements.
Volumes were up 13% and 11% in each market respectively.

Tennent’s: The launch of premium variants of the Tennent’s brand into a number
of different markets is proving to be an attractive ‘support act’ sitting
alongside the development of cider. In year one, 20 kHL of Tennent’s Lager was
shipped into Italy and the growth of the brand in Canada impressed. There are
also encouraging signs from some states in the US. International volume of
Tennent’s is around 32 kHL, some 10% of total international volume. The
Scottish heritage and authenticity of the brand is a marketable attribute that
resonates in a range of international markets, suggesting that there could be
reasonable growth potential for the next few years.

(i)On a constant currency basis, constant currency calculation is set out on
page 14

Third Party Brands UK

Operations Review

                                     Third Party Brands UK
Constant Currency^(i)                FY2013    FY2012    Change
                                     €m        €m        %
Revenue                              116.7        122.4        (4.7%)
Net revenue                          90.2         96.8         (6.8%)
- Price /mix impact                                            (4.0%)
- Volume impact                                                (2.8%)
Operating profit                     5.1          3.8          34.2%
Operating margin (Net revenue)       5.7%         3.9%         1.8ppts
Volume – (kHL)                       871       896       (2.8%)

Third Party Brands UK: This segment relates to the distribution of third party
products and the production and distribution of private label brands in the
UK. Private label accounted for 68% of the total third party volume in FY2013,
up from 63% in FY2012.

Net revenue was down 6.8% in the year. Overall volume was down 2.8%, with a
decrease in third party brands partly offset by an increase in volume in
private label. This was mitigated in part by improvement in average pricing
achieved for both private label and third party products.

Agency: Volume declined 15.2% in the period. Route to market changes in
commercial arrangements to service one significant national account in the
Scottish market resulted in lower margin factored brands no longer being
distributed by C&C. Likewise, route to market amendments in Northern Ireland
reduced duty in suspense volume by a reasonably significant amount during the
year. In both Scotland and Northern Ireland, the agency brands continue to
perform well in the core Independent Free Trade segment of the on-trade.

The reduction in lower value activity improved average pricing by 3.8%,
contributing to the overall 1.8ppt improvement in third party brand operating

Private Label: A number of new contracts for cider and beer helped push volume
up 4.2% in FY2013. The nature of the new contracts was higher in quality, a
point well illustrated by a 2.3% improvement in average pricing achieved and a
healthier operating margin.

(i)On a constant currency basis, constant currency calculation is set out on
page 14


                   Year           Year           CC^(i)
                   ended          ended          Year
                                                 ended          Change       CC -
               28          29          28          %         Change
                   February       February       February                    %
                   2013           2012           2012
                   €m             €m             €m
Net revenue     476.9       480.8       504.6       (0.8%)    (5.5%)
Operating          113.9          111.2          113.4          2.4%         0.4%
Net finance        (4.9)          (5.1)                         (3.9%)
before             109.0          106.1                         2.7%
Income tax         (16.0)         (13.8)                        15.9%
Effective          14.7%          13.0%
tax rate
Profit from
operations         93.0           92.3
before                                                          0.8%
Adjusted           27.7           27.6
diluted            cent           cent
diluted            27.7           27.6
EPS^(iii)          cent           cent
Dividend per       8.75           8.17                          7.1%
Share              cent           cent
payout          31.6%       29.6%                           

C&C is reporting net revenue ^ of €476.9m, operating profit^(ii) of €113.9m
and adjusted diluted EPS^(iii) of 27.7 cent.

This represents a moderate decline of 0.8% in net revenue (decline of 5.5% on
a constant currency^(i) basis) but an operating profit^(ii) increase of 2.4%
(up 0.4% on a constant currency basis^(i)) equating to an operating margin of
23.9%, an increase of 0.8 percentage points on the prior year (up 1.4
percentage points on a constant currency basis^(i)). In challenging domestic
markets, the results achieved highlight both the resilience and adaptability
of the C&C business model and the importance of growth from international


Net finance costs reduced to €4.9m (FY2012: €5.1m) reflecting a reduction in
average drawn debt during the period and the benefit of no fixed interest
contracts in the current year.

The income tax charge in the year excluding exceptional items amounted to
€16.0m giving an effective tax rate of 14.7%, an increase of 1.7 percentage
points on the prior year. The increase is primarily due to the increased
proportion of profits arising in the UK. The effective tax rate of 14.7%
reflects the fact that, currently, the majority of the Group’s profits are
earned in either Ireland or the UK, both of whom have competitive tax rates
relative to European averages.

Subject to shareholder approval, the proposed final dividend of 4.75 cent per
share will be paid on 12 July 2013 to ordinary shareholders registered at the
close of business on 24 May 2013. The Group’s full year dividend will
therefore amount to 8.75 cent per share, a 7.1% increase on the previous year.
The proposed full year dividend per share will represent a payout of 31.6%
(FY2012: 29.6%) of the full year reported adjusted diluted earnings per share.
A scrip dividend alternative will be available. Total dividends paid to
ordinary shareholders in the current financial year amounted to €28.4m of
which €21.2m was paid in cash, €0.1m was accrued with respect to LTIP (Part I)
dividend entitlements while €7.1m or 25% (FY2012:19%) was settled by the issue
of new shares.

(i) On a constant currency basis, constant currency calculation is set out on
page 14.
(ii) Before exceptional items
(iii) See Note 8 to condensed set of financial statements
(iv) Dividend per share as a percentage of adjusted diluted EPS


The Group generated free cash flow^(i) in the period of €54.8m, reflecting an
EBITDA^(ii) to Free Cash Flow conversion ratio of 40.4%, the Group ended the
year with net debt^(iii) of €123.4m. A summary cash flow statement is set out

Cash flow summary
                                   2013      2012
                                      €m           €m
Operating profit ^(iv)                113.9        111.1
Amortisation/depreciation          21.7      20.3
EBITDA ^ (ii)                         135.6        131.4
Working capital                       (21.8)       13.5
Advances to customers                 (16.7)       (5.5)
Net capital expenditure               (24.1)       (17.7)
Net finance costs                     (1.9)        (3.9)
Tax paid                              (8.5)        (4.4)
Exceptional items paid^(v)            (4.9)        (8.7)
Other *                            (2.9)     (2.1)
Free cash flow^(i)                    54.8         102.6
Free cash flow conversion ratio       40.40%       78.10%

*other relates to the share options add back, pensions charged to operating
profit before exceptional items less contributions paid and in the prior year
profit on disposal of plant & equipment.

The current year cash flow performance reflects a number of factors. Working
capital was negative, primarily as a consequence of adding VHCC to the Group
and exiting transitional service arrangements for the Hornsby’s brand during
the year. FY2012 working capital movement had enjoyed the benefit of some slow
recovery of credit due to customers. The sustained challenges of the trading
environment appear to have sharpened cash recovery across the board,
negatively impacting our working capital movement in FY2013 as a consequence.
The Group increased advances to customers in the period, primarily in
Scotland. Capital expenditure also increased in the current year. FY2013
capital expenditure includes the purchase of land in Vermont that was
purchased by the Group post the acquisition of VHCC. Net finance costs of the
Group reduced due to the reduction in average drawn debt for the period and
the benefit of no fixed interest contracts in the current year. Taxation
payments increased in line with an increased proportion of UK taxable profits.

                                                          2013          2012
                                                          €m            €m
Free cash flow^(i)                                        54.8          102.6
Proceeds on disposal of businesses                        -             4.7
Proceeds from exercise of share options                   3.5           1.5
Proceeds with respect to Joint Share Ownership Plan       -             0.1
Proceeds from sale of shares held by Employee Trust       6.6           -
Proceeds from issue of new shares following               5.3           -
acquisition of subsidiary
Acquisition of brand & business/deferred                  (233.5)       (16.6)
consideration paid
Acquisition of equity accounted investees                 (2.9)         -
Dividends paid in cash                                    (21.2)     (18.5)
(Outflow)/Inflow                                          (187.4)       73.8
Net cash/(debt)^(iii) at beginning of year                68.3          (6.3)
Translation adjustment                                    (3.7)         1.1
Non cash movement                                         (0.6)      (0.3)
Net (debt)/cash^(iii) at end of year                      (123.4)       68.3

The Group funded the acquisition of the VHCC from its 2012 multi-currency debt
facility. The Group returned €21.2m to shareholders in the form of a cash
dividend during the year and finished the year in a net debt^(i) position of

It is Group policy to ensure that a structure of medium/long term debt funding
is in place to provide it with the financial capacity to promote the future
development of the business and to achieve its strategic objectives. The Group
manages its borrowing ability by entering into committed loan facility
agreements. Currently the Group has a multi-currency five year syndicated
revolving loan facility, entered into in February 2012 with seven banks. The
principal agreement provided the Group with debt capacity of up to €250.0m and
in addition provided for a further €100.0m in the form of an uncommitted
facility, which the Group successfully negotiated as committed in December
2012. The total drawn funds under this facility at 28 February 2013 was
€246.6m (29 February 2012: €nil, 2007 facility €60.0m drawn).

The strength of the balance sheet coupled with the capability to generate
strong cash flow provides the Group with the financial flexibility to invest
for future growth and/or return cash to shareholders.

(i) Free Cash Flow is a non-GAAP measure that comprises cash flow from
operating activities net of capital investment cash outflows which form part
of investing activities. Free Cash Flow highlights the underlying cash
generating performance of the ongoing business.
(ii) EBITDA is earnings before exceptional items, interest, tax, depreciation
and amortisation charges.
(iii) Net debt comprises cash and borrowings, net of issue costs (€2.2m).
(iv) Before exceptional items.
(v) Exceptional payments include severance and other pay related costs arising
as a result of the restructuring programme of ¤2.6 m (2012 : ¤4.7m),
acquisition related costs of ¤1.2m (2012: nil) and costs associated with
integrating acquired businesses/brands and IT systems implementation of ¤1.1
million (2012: ¤4.0m).


In FY 2012 the Group worked with the Pension Scheme Trustees to implement
pension reform in order to manage the Group’s funding risk. The process
concluded with the Pensions Board issuing a Section 50 directive to remove the
mandatory pension increase rule guaranteeing 3% per annum increase to certain
pensions in payment and replaced it with guaranteed pension increases of 2%
per annum for each of the 3 years 2012, 2013 and 2014, with future pension
increases to be awarded on a discretionary basis.

A Funding Proposal was also approved by the Pensions Board committing the
Group to: contributions of 14% of Pensionable Salaries to fund future pension
accrual of benefits; a deficit contribution of €3.4m; and an additional
supplementary deficit contribution of €1.9m which the Company reserves the
right to reduce or terminate on consultation with the Trustees and on advice
from the Scheme Actuary that it is no longer required due to a correction in
market conditions. The level of future funding commitment is in line with
current funding levels. The Directors believe that the agreed plan will enable
the schemes to meet the Minimum Funding Standard by 31 December 2016.


                        FY2013       FY2012
                           Euro:Stg£       Euro:Stg£
Translation Exposure       0.81            0.87
Transaction Exposure       0.86            0.85

As shown above, the effective rate for the translation of results from
sterling currency operations was €1:£0.81 (FY2012: €1:£0.87) and the effective
rate for the translation of sterling currency revenue/net revenue transactions
by euro functional currency operations resulted in an effective rate of
€1:£0.86 (FY2012: €1:£0.85) at operating profit level.

The Group policy is to hedge an appropriate portion of its foreign currency
transaction exposure for a period of up to two years ahead. The principal
foreign currency forward contracts in place at 28 February 2013 are:

                                            Stg£    US$
Local currency amount       (m)             20.0       1.0
Average forward rate        (Euro:FX)       0.81       1.24

(i) Net debt comprises cash and borrowings, net of issue costs (€2.2m).

Comparisons for revenue, net revenue and operating profit for each of the
Group’s operating segments are shown at constant exchange rates for
transactions by subsidiary undertakings in currencies other than their
functional currency and for translation in relation to the Group’s sterling
denominated subsidiaries by restating the prior year at FY2013 effective
rates. Applying the realised FY2013 foreign currency rates to the reported
FY2012 revenue, net revenue and operating profit rebases the comparatives as


                    Year                                               Year ended
                    ended                                              29 February
                    29             FX                FX                2012
                February    Transaction    Translation    Constant
                    2012           €m                €m                currency
                    €m                                                 comparative
ROI                 142.5          -                 -                 142.5
Cider UK            218.6          -                 14.2              232.8
Tennent’s UK        209.9          -                 13.6              223.5
International       30.7           0.8               0.4               31.9
Third party      115.0       -              7.4            122.4
brands UK
Total            716.7       0.8            35.6           753.1
Net revenue
ROI                 101.4          -                 -                 101.4
Cider UK            162.1          -                 10.5              172.6
Tennent’s UK        95.8           -                 6.2               102.0
International       30.6           0.8               0.4               31.8
Third party      90.9        -              5.9            96.8
brands UK
Total            480.8       0.8            23.0           504.6
Operating profit
ROI                 44.4           (0.7)             -                 43.7
Cider UK            35.2           0.6               0.8               36.6
Tennent’s UK        21.2           -                 1.3               22.5
International       6.8            (0.2)             0.2               6.8
Third party      3.6         -              0.2            3.8
brands UK
Total            111.2       (0.3)          2.5            113.4


Under Irish company law (Statutory Instrument 116/2005 European Communities
(International Financial Reporting Standards and Miscellaneous Amendments)
Regulations 2005), the Group is required to give a description of the
principal risks and uncertainties which it faces.

The principal risks and uncertainties faced by the Group’s businesses are set
out below. The Group considers that currently the most significant risks to
its results and operations over the short term are (a) strategic failures, (b)
economic conditions affecting consumer spending and confidence and (c) failure
to attract and retain high-performing employees.

Risks and uncertainties relating to strategic goals

  *The Group’s strategy is to focus upon earnings growth through organic
    growth, acquisitions, joint ventures and entry into new markets. These
    opportunities may not materialise or deliver the benefits or synergies
    expected and may present new social and compliance risks. The Group seeks
    to mitigate these risks through due diligence, careful investment and
    continuing monitoring post-acquisition.

Risks and uncertainties relating to revenue and profits

  *The majority of the Group’s revenue derives from Ireland and the UK, where
    economic growth is slow. The Group seeks to mitigate this risk through
    changes to its business model, geographical diversification into higher
    growth markets and through acquisitions and joint ventures offering costs
  *Economic conditions in the Group’s principal markets may affect consumer
    spending and confidence. The Group seeks to mitigate these risks through
    careful forecasting and regular monitoring of market conditions and by
    maximising operating efficiency.
  *Customers, particularly in the on-trade where the Group has exposure
    through cash advances to customers, may experience financial difficulties.
    The Group monitors the level of its exposure carefully.
  *Consumer preference may change, new competing brands may be launched and
    competitors may increase their marketing or change their pricing policies.
    The Group has a programme of brand investment and innovation to maintain
    and enhance the market position of its products.
  *Seasonal fluctuations in demand, especially an unseasonably bad summer in
    Ireland or the UK, could materially affect demand for the Group’s cider
    products. Geographical diversification is helping to mitigate this risk.

Risks and uncertainties relating to costs and production

  *Input costs may be subject to volatility and inflation and the continuity
    of supply of raw materials may be affected by the weather and other
    factors. The Group seeks to mitigate some of these risks through long term
    or fixed price supply agreements. The Group does not seek to hedge its
    exposure to commodity prices by entering into derivative financial
  *Circumstances such as the loss of a production or storage facility or
    disruptions to its supply chains or critical IT systems may interrupt the
    supply of the Group’s products. The Group seeks to mitigate the
    operational impact of such an event by the availability of multiple
    production facilities, fire safety standards and disaster recovery
    protocols, and the financial impact of such an event through business
    interruption and other insurances.

Financial risks and uncertainties

  *There is continued concern surrounding the euro currency. The Group’s
    operations involve the sale and purchase of goods denominated in
    currencies other than the euro, principally pounds sterling and the US
    dollar. Fluctuations in value between the euro and these currencies may
    affect the Group’s revenues and costs. The Group seeks to mitigate
    currency and interest rate risks through hedging and structured financial
    contracts to hedge a portion of its foreign currency transaction exposure
    and to fix a portion of its variable rate interest exposure, where
    appropriate. The Group has not entered into structured financial contracts
    to hedge its translation exposure on its foreign acquisitions.
  *The Group’s shares have a primary listing on the Irish Stock Exchange and
    are denominated in euro and the continued economic crisis may affect
    liquidity. The Group keeps its listings under review.
  *The solvency of the Group’s defined benefit pension schemes may be
    affected by a fall in the value of their investments, market and interest
    rate volatility and other economic and demographic factors. Each of these
    factors may require the Group to increase its contribution levels. The
    Group seeks to mitigate this risk by continuous monitoring, taking
    professional advice on the optimisation of asset returns within agreed
    acceptable risk tolerances and implementing liability management
    initiatives such as the reduction in member contractual benefits approved
    by the Pensions Board in February 2012.

Fiscal, regulatory and liability-related risks and uncertainties

  *The Group may be adversely affected by changes in excise duty or taxation
    on cider and beer in Ireland, the UK, the US and other territories.
  *The Group may be adversely affected by changes in government regulations
    affecting alcohol pricing, sponsorship or advertising. Within the context
    of supporting responsible drinking initiatives, the Group supports the
    work of its trade associations to present the industry’s case to
  *The Group’s operations are subject to extensive regulation, including
    stringent environmental, health and safety and food safety laws and
    regulations and competition law. Legislative non-compliance or adverse
    ethical practices could lead to prosecutions and damage to the reputation
    of the Group and its brands. The Group has in place a permanent legal and
    compliance monitoring and training function and an extensive programme of
    corporate responsibility.
  *The Group is vulnerable to contamination of its products or base raw
    materials, whether accidental, natural or malicious. Contamination could
    result in a recall of the Group’s products, damage to brand image and
    civil or criminal liability. The Group has established protocols and
    procedures for incident management and product recall and mitigates the
    financial impact by appropriate insurance cover.
  *Fraud, corruption and theft against the Group whether by employees,
    business partners or third parties are risks, particularly as the Group
    develops internationally. The Group maintains appropriate internal
    controls and procedures to guard against economic crime and imposes
    appropriate monitoring and controls on subsidiary management.

Employment-related risks and uncertainties

  *The Group’s continued success is dependent on the skills and experience of
    its executive Directors and other high-performing personnel, including in
    newly acquired businesses, and could be affected by their loss or the
    inability to recruit or retain them. The Group seeks to mitigate this risk
    through appropriate remuneration policies and succession planning.
  *Whilst relations with employees are generally good, work stoppages or
    other industrial action could have a material adverse effect on the Group.
    The Group seeks to ensure good employee relations through engagement and


For the year ended 28 February 2013

                             Year ended 28 February 2013                    Year ended 29 February 2012
                                   Before            Exceptional                     Before            Exceptional
                                   exceptional    items          Total         exceptional    items          Total
                                   items             (note 6)                        items             (note 6)
                       Notes       €m                €m                €m            €m                €m                €m
Revenue                4           724.1             -                 724.1         716.7             -                 716.7
Excise duties               (247.2)        -              (247.2)    (235.9)        -              (235.9)
Net revenue            4           476.9             -                 476.9         480.8             -                 480.8
Operating costs             (363.0)        (4.6)          (367.6)    (369.6)        4.8            (364.8)
Operating profit       4           113.9             (4.6)             109.3         111.2             4.8               116.0
Finance income                     0.1               -                 0.1           0.7               -                 0.7
Finance expense             (5.0)          -              (5.0)      (5.8)          -              (5.8)
Profit/(loss)                      109.0             (4.6)             104.4         106.1             4.8               110.9
before tax
Income tax                  (16.0)         0.3            (15.7)     (13.8)         0.4            (13.4)
from continuing                    93.0              (4.3)             88.7          92.3              5.2               97.5
Loss from
discontinued                -              -              -          (0.1)          (1.7)          (1.8)
Profit for the
attributable to             93.0           (4.3)          88.7       92.2           3.5            95.7
Basic earnings         8                                               27.0c                           29.4c
per share (cent)
Diluted earnings       8                                               26.4c                           28.7c
per share (cent)
Basic earnings         8                                               27.0c                           30.0c
per share (cent)
Diluted earnings       8                                               26.4c                           29.2c
per share (cent)


For the year ended 28 February 2013

                                                     2013      2012
                                               Notes       €m           €m
Other comprehensive income and expense:
Foreign currency translation differences
arising on foreign currency borrowings
as net investment hedges                                   (3.2)        1.7
Foreign currency translation differences
arising on the net investment in foreign                   (8.1)        3.6
Foreign currency reserve recycled on
disposal of Northern Ireland wholesale                     -            0.7
Net loss on revaluation of land and                        -            (1.7)
Net movement in cash flow hedging                          2.0          1.4
Deferred tax on cash flow hedges                           (0.3)        (0.1)
Actuarial loss on retirement benefit           11          (12.3)       (19.0)
Deferred tax on actuarial loss on                   1.6       2.4
retirement benefit obligations
Net loss recognised directly within                        (20.3)       (11.0)
other comprehensive income
Profit for the year attributable to                 88.7      95.7
equity shareholders
Comprehensive income for the year                   68.4      84.7
attributable to equity shareholders


As at 28 February 2013

                                                2013        2012
                                          Notes       €m             €m
Non-current assets
Property, plant & equipment                           183.6          181.8
Goodwill & intangible assets                          707.2          484.9
Equity-accounted investees                            2.4            -
Retirement benefit obligations            11          0.5            0.2
Deferred tax assets                                   6.2            6.5
Derivative financial instruments                      1.4            -
Trade & other receivables                      31.3        19.5
                                                      932.6          692.9
Current assets
Inventories                                           48.9           46.1
Trade & other receivables                             96.1           93.4
Derivative financial assets                           1.7            0.1
Cash & cash equivalents                        121.0       128.3
                                                      267.7          267.9
TOTAL ASSETS                                   1,200.30    960.8
Equity share capital                                  3.4            3.4
Share premium                                         107.9          92.0
Other reserves                                        48.6           57.8
Treasury shares                                       (12.5)         (16.8)
Retained income                                632.3       577.8
Total equity                                          779.7          714.2
Non-current liabilities
Interest bearing loans & borrowings                   244.4          -
Derivative financial liabilities                      1.2            -
Retirement benefit obligations            11          22.0           15.3
Provisions                                            9.4            11.5
Deferred tax liabilities                       7.8         7.2
                                                      284.8          34.0
Current liabilities
Interest bearing loans & borrowings                   -              60.0
Derivative financial liabilities                      -              0.9
Trade & other payables                                124.1          141.9
Provisions                                            2.8            5.8
Current tax liabilities                        8.9         4.0
                                                      135.8          212.6
Total liabilities                              420.6       246.6
TOTAL EQUITY & LIABILITIES                     1,200.30    960.8


For the year ended 28 February 2013

                                                       2013       2012
                                                          €m            €m
Profit for the year attributable to equity                88.7          95.7
Finance income                                            (0.1)         (0.7)
Finance expense                                           5.0           5.8
Income tax expense                                        15.7          13.4
Depreciation of property, plant & equipment               21.6          20.2
Amortisation of intangible assets                         0.1           0.1
Profit on disposal of property, plant & equipment         -             (0.3)
Revaluation loss on property, plant & equipment           -             2.0
Loss on disposal of businesses                            -             1.8
Exceptional retirement benefit obligations gain -         -             (0.1)
discontinued operations
Charge for share-based employee benefits                  3.0           2.6
Pension contributions paid less amount charged to      (5.9)      (19.1)
income statement
                                                          128.1         121.4
Increase in inventories                                   (0.7)         (4.5)
(Increase)/decrease in trade & other receivables          (14.8)        10.6
(Decrease)/increase in trade & other payables             (18.4)        1.2
Decrease in provisions                                 (4.9)      (0.1)
                                                          89.3          128.6
Interest received                                         0.1           0.7
Interest and similar costs paid                           (2.0)         (4.6)
Income taxes paid                                      (8.5)      (4.4)
Net cash inflow from operating activities              78.9       120.3
Purchase of property, plant & equipment                   (24.1)        (18.9)
Net proceeds on disposal of property, plant &             -             1.2
Acquisition of brand/deferred consideration paid on       (3.7)         (16.6)
acquisition of brand
Acquisition of business                                   (229.8)       -
Acquisition of equity accounted investee                  (2.9)         -
Proceeds on disposal of businesses                     -          4.7
Net cash outflow from investing activities             (260.5)    (29.6)
Proceeds from exercise of share options                   3.5           1.5
Proceeds from issue of new shares following               5.3           -
acquisition of subsidiary
Proceeds from sale of shares held by Employee             6.6           -
Benefit Trust
Proceeds from exercise of Interests under Joint           -             0.1
Share Ownership Plan
Drawdown of debt                                          251.2         -
Repayment of debt                                         (65.2)        (73.6)
Payment of issue costs                                    (2.8)         -
Dividends paid                                         (21.2)     (18.5)
Net cash inflow/(outflow) from financing activities    177.4      (90.5)
Net (decrease)/increase in cash & cash equivalents        (4.2)         0.2
Cash & cash equivalents at beginning of year              128.3         128.7
Translation adjustment                                 (3.1)      (0.6)
Cash & cash equivalents at end of year                 121.0      128.3

A reconciliation of cash & cash equivalents to net debt is presented in note


For the year ended 28 February 2013

                       Equity                      Capital                        Cash          Share-         Currency
                    share      Share      redemption    Capital    flow       based       translation    Revaluation    Treasury    Retained    Total
                       capital       premium       reserve          reserve       hedging       payments       reserve           reserve           shares         income
                                                                                  reserve       reserve
                       €m            €m            €m               €m            €m            €m             €m                €m                €m             €m             €m
At 28 February         3.4           86.3          0.5              24.9          (1.8)         7.5            15.9              5.9               (17.4)         518.5          643.7
Profit for the
year attributed        -             -             -                -             -             -              -                 -                 -              95.7           95.7
to equity
comprehensive       -          -          -             -          1.3        -           6.0            (1.7)          -           (16.6)      (11.0)
Total                  3.4           86.3          0.5              24.9          (0.5)         7.5            21.9              4.2               (17.4)         597.6          728.4
Dividend on            -             4.2           -                -             -             -              -                 -                 -              (22.7)         (18.5)
ordinary shares
Exercised share        -             1.5           -                -             -             -              -                 -                 -              -              1.5
of share-based         -             -             -                -             -             (2.5)          -                 -                 -              2.5            -
payments reserve
of revaluation         -             -             -                -             -             -              -                 (0.4)             -              0.4            -
reserve on
Joint Share            -             -             -                -             -             (0.4)          -                 -                 0.6            -              0.2
Ownership Plan
Equity settled
share-                 -             -             -                -             -             2.6            -                 -                 -              -              2.6
based payments
At 29 February         3.4           92.0          0.5              24.9          (0.5)         7.2            21.9              3.8               (16.8)         577.8          714.2
Profit for the
year attributed        -             -             -                -             -             -              -                 -                 -              88.7           88.7
to equity
comprehensive       -          -          -             -          1.7        -           (11.3)         -              -           (10.7)      (20.3)
Total                  3.4           92.0          0.5              24.9          1.2           7.2            10.6              3.8               (16.8)         655.8          782.6
Dividend on            -             7.1           -                -             -             -              -                 -                 -              (28.4)         (21.3)
ordinary shares
Exercised share        -             3.5           -                -             -             -              -                 -                 -              -              3.5
Issue of shares
following              -             5.3           -                -             -             -              -                 -                 -              -              5.3
acquisition of
of share-based         -             -             -                -             -             (2.2)          -                 -                 -              2.2            -
payments reserve
Joint Share            -             -             -                -             -             (0.4)          -                 -                 0.4            -              -
Ownership Plan
Sale of shares
held by Employee       -             -             -                -             -             -              -                 3.9               2.7            6.6
Equity settled
share-              -          -          -             -          -          3.0         -              -              -           -           3.0
based payments
At 28 February      3.4        107.9      0.5           24.9       1.2        7.6         10.6           3.8            (12.5)      632.3       779.7



The financial information presented in this report has been prepared in
accordance with the Listing Rules of the Irish Stock Exchange and the
accounting policies that the Group has adopted under International Financial
Reporting Standards (IFRS) as approved by the European Union and issued by the
International Accounting Standards Board (IASB) for the financial year ended
28 February 2013.


The financial information prepared in accordance with IFRSs as adopted by the
European Union included in this report does not comprise “full group accounts”
within the meaning of Regulation 40(1) of the European Communities (Companies:
Group Accounts) Regulations, 1992 of Ireland insofar as such group accounts
would have to comply with the disclosure and other requirements of those
Regulations. Full statutory accounts for the year ended 28 February 2013
prepared in accordance with IFRS, upon which the auditors have given an
unqualified report, have not yet been filed with the Registrar of Companies.
Full accounts for the year ended 29 February 2012, prepared in accordance with
IFRS and containing an unqualified audit report have been delivered to the
Registrar of Companies.

The information included has been extracted from the Group’s financial
statements, which have been approved by the Board of Directors on 15 May 2013.


The Group's financial statements are presented in euro millions to one decimal
place. The results of the Group's subsidiaries with non-euro functional
currencies have been translated into euro at average exchange rates for the
year with the related balance sheets consolidated using the closing rate at
the balance sheet date. Foreign currency movements arising on restatement of
the results and opening net assets of non-euro functional currency companies
at closing rates are recognised in the Currency Translation Reserve via the
Statement of Comprehensive Income, together with currency movements arising on
foreign currency borrowings designated as net investment hedges and currency
movements arising on retranslation of the Group's long term sterling and US
dollar intra group loans which are considered quasi equity in nature and part
of the Group’s net investment in its foreign operations.

The exchange rates used in translating sterling and US dollar balance sheet
and income statement amounts were as follows:-

                                                   2013     2012
Balance Sheet (closing rate):          Euro:Stg£             0.867       0.837
Income Statement (average rate):       Euro:Stg£             0.813       0.866
Balance Sheet (closing rate):          Euro:US$              1.315       1.338
Income Statement (average rate):       Euro:US$              1.290       1.385


The Group’s business activity is the manufacturing, marketing and distribution
of alcoholic drinks and five reporting segments have been identified in the
current period; Republic of Ireland (‘ROI’), Cider United Kingdom (‘Cider
UK’), Tennent’s United Kingdom (‘Tennent's UK’), International, and Third
Party Brands United Kingdom (‘Third Party Brands UK’).

The Group continually reviews and updates the manner in which it monitors and
controls its financial operations resulting in changes in the manner in which
information is classified and reported to the Chief Operating Decision Maker
(‘CODM’). As a result, the basis of segmentation differs from that presented
in the prior year however it corresponds with the current year nature of
reporting lines to the CODM (as defined in IFRS 8 Operating Segments), and the
Group’s internal reporting for the purpose of managing the business, assessing
performance and allocating resources.

The CODM, identified as the executive directors comprising Stephen Glancey,
Kenny Neison and, from 23 October 2012, Joris Brams, assesses and monitors the
operating results of segments separately via internal management reports in
order to effectively manage the business and allocate resources.

During the current financial year, the CODM reviewed the basis on which they
received financial information to manage the business and concluded that it
was no longer wholly appropriate and consequently implemented a number of
changes as outlined in the paragraphs below. In all instances the changes were
deemed necessary to better enable the CODM to evaluate the results of the
business and the economic environment in which the business operates. The
operating segments that have been aggregated all have similar economic
characteristics and are similar in terms of product, production and
distribution processes, and customers. All comparative amounts have been
restated to reflect the new basis of segmentation. The reclassification has no
impact on the Revenue, Net Revenue or Operating profit reported by the Group.

The identified reporting segments are as follows:-

(i) ROI

This segment includes the financial results from sale of all products in the
Republic of Ireland (‘ROI’), principally Bulmers, Tennent’s, Caledonia Smooth
and third party brands as permitted under the terms of a distribution
agreement with AB InBev.

The continued challenging economic climate within which the ROI business
operates changed the focus of the CODM from the financial performance of cider
in ROI to that of the total financial performance of the portfolio derived
from the ROI market. Previously the financial results from the sale of
Tennent’s and third party brands in ROI were reported within the Tennent’s and
Third Party Brands segments.

(ii) Cider UK

This segment includes the results from sale of the Group’s cider products in
the UK, with Magners, Gaymers and Blackthorn the principal brands. Previously
the results from the sale of the Group’s cider products in the UK were shown
within two segments, Cider GB (cider sales in Great Britain (‘GB’)) and Cider
NI (cider sales in Northern Ireland (‘NI’)).

As permitted under IFRS 8 Operating Segments, the Group has aggregated the
Cider NI operating segment with the Cider GB operating segment as the nature
of the products are identical, profit margins are aligned, both operating
segments are managed by the same segment manager, the strategic objectives and
the type of customers in both jurisdictions are similar as is the method of
distribution, the market in which they operate, and the regulatory

In addition, in updating the manner in which the CODM wished to monitor and
assess financial performance of the Group, a decision was taken that the
financial performance of the element of the Group’s business concerned with
the production and sale of ‘private-label’ cider products in the UK was better
managed and controlled as part of the operating segment Third Party Brands UK.
This decision was taken on the basis that the operating margins of this
business component are similar to those earned from other third party brands;
the strategic objectives are more aligned with those of the Group’s third
party distribution business and the inclusion of this business within the
operating segment Cider UK distorts the financial information which the CODM
uses to decide on the allocation of resources.

(iii) Tennent’s UK

This segment includes the results from sale of the Group’s ‘owned’ beer brand
– Tennent’s in the UK and sales of Caledonian Best in the UK. This differs
from that previously presented where the financial results from sale of
Tennent’s across all territories was disclosed within the Tennent’s segment.

(iv) International

This segment includes the results from sale of the Group’s cider and beer
products, principally Magners, Blackthorn, Hornsby’s, Woodchuck and Tennent’s
in all territories outside of the ROI and the UK. This differs from that
previously presented where the financial results from sale of Tennent's across
all territories was previously disclosed within the Tennent's segment.
Accordingly, the Group renamed the segment 'International' from 'Cider
Export', this aligns with the internal structure where a segment manager was
appointed during the year with responsibility for the new International

(v) Third Party Brands UK

This segment relates to the distribution of third party brands and the
production and distribution of private label products in the UK. Previously,
results from the sale of third party brands in ROI were included within the
operating segment Third Party Brands but for reasons outlined above are now
included in the ROI segment.

Information regarding the results of each `reportable segment is disclosed
below for the Group’s continuing business. The analysis by segment includes
both items directly attributable to a segment and those, including central
overheads, which are allocated on a reasonable basis in presenting information
to the CODM.

Inter-segmental revenue is not material and thus not subject to separate

Segment capital expenditure is the total amount incurred during the year to
acquire segment assets, excluding those assets acquired in business
combinations that are expected to be used for more than one accounting period.

(a) Reporting segment disclosures

                                  2013                                        2012
                 Revenue    Net        Operating    Revenue    (restated)    Operating
                                  revenue       profit                        Net              profit
                    €m            €m            €m              €m            €m               €m
ROI                 133.8         92.2          38.5            142.5         101.4            44.4
Cider UK            195.8         137.8         30.9            218.6         162.1            35.2
Tennent's UK        229.3         108.9         30.3            209.9         95.8             21.2
International       48.5          47.8          9.1             30.7          30.6             6.8
Third party      116.7      90.2       5.1          115.0      90.9          3.6
brands UK
Continuing          724.1         476.9         113.9           716.7         480.8            111.2
Discontinued     -          -          -            5.2        5.2           (0.1)
Total before
unallocated         724.1         476.9         113.9           721.9         486.0            111.1
Exceptional      -          -          (4.6)*       -          -             4.9**
Total               724.1         476.9         109.3           721.9         486.0            116.0

* Of the exceptional loss in the current year, €1.3m gain relates to ROI,
€0.8m loss to Cider UK, €2.6m loss to International, €0.5m loss to Tennent’s
UK, and €2.0m loss remains unallocated.
** Of the exceptional items in the prior year, €4.8m gain relates to ROI,
€1.4m gain to Cider UK, €1.3m gain to International, a €2.7m loss to Tennent’s
and a €0.1m gain to discontinued operations.

The impact of the reclassification of the FY2012 financial results as
described above is outlined below. This reclassification has no impact on the
Revenue, Net revenue or Operating profit reported by the Group:-

                                  Revenue    Net revenue    Operating
                                     €m            €m                €m
Previously reported - Cider          126.8         91.5              42.2
Impact of change                  15.7       9.9            2.2
Current classification            142.5      101.4          44.4
Cider UK
Previously reported - Cider GB       249.8         172.8             29.5
Impact of change                  (31.2)     (10.7)         5.7
Current classification            218.6      162.1          35.2
Tennent's UK
Previously reported -                216.8         100.1             22.3
Impact of change                  (6.9)      (4.3)          (1.1)
Current classification            209.9      95.8           21.2
Previously reported - Cider          30.3          30.2              6.6
Impact of change                  0.4        0.4            0.2
Current classification            30.7       30.6           6.8
Third party brands UK
Previously reported - Third          77.9          74.0              7.1
party brands
Impact of change                  37.1       16.9           (3.5)
Current classification            115.0      90.9           3.6
Cider NI
Previously reported                  15.1          12.2              3.5
Impact of change                  (15.1)     (12.2)         (3.5)
Current classification            -          -              -

(b) Other operating segment information

                 2013                              2012
                    Capital           Depreciation       Capital        Depreciation
                    expenditure                          expenditure
                    €m                €m                 €m                €m
ROI                 2.2               3.3                1.4               3.8
Cider UK            10.3              8.6                8.8               8.3
Tennent's UK        8.7               8.3                7.4               7.2
International       3.1               1.2                0.6               0.6
Third party      -              0.2             0.4            0.3
brands UK
Total            24.3           21.6            18.6           20.2

(c) Geographical analysis of revenue and net revenue (continuing operations)
                    Revenue                              Net revenue
                    2013              2012               2013              2012
                    €m                €m                 €m                €m
Republic of         133.8             142.5              92.2              101.4
United              541.8             543.5              336.9             348.8
Rest of             14.2              10.4               14.2              10.4
North America       29.9              14.5               29.2              14.4
Rest of World    4.4            5.8             4.4            5.8
Total            724.1          716.7           476.9          480.8

The geographical analysis of revenue and net revenue is based on the location
of the third party customers.

(d) Geographical analysis of non-current assets

                                               Rest         North         Rest
                    ROI      UK       of        America    of       Total
                                               Europe                     World
                       €m          €m          €m           €m            €m          €m
28 February 2013
Property, plant        54.1        123.9       -            5.6           -           183.6
& equipment
Goodwill &
intangible             120.3       322.8       7.1          251.4         5.6         707.2
Equity-accounted       -           2.4         -            -             -           2.4
benefit                -           0.5         -            -             -           0.5
Deferred tax           5.2         -           -            1.0           -           6.2
financial              -           1.4         -            -             -           1.4
Trade & other       0.5      30.8     -         -          -        31.3
Total               180.1    481.8    7.1       258        5.6      932.6

                                               Rest         North         Rest
                       ROI         UK          of           America       of          Total
                                               Europe                     World
                       €m          €m          €m           €m            €m          €m
29 February 2012
Property, plant        56.6        124.6       -            0.6           -           181.8
& equipment
Goodwill &
intangible             120.3       325.8       7.1          26.1          5.6         484.9
benefit                -           0.2         -            -             -           0.2
Deferred tax           6.5         -           -            -             -           6.5
Trade & other       -        19.5     -         -          -        19.5
Total               183.4    470.1    7.1       26.7       5.6      692.9

The geographical analysis of non-current assets, with the exception of
Goodwill & intangible assets, is based on the geographical location of the
assets. The geographical analysis of Goodwill & intangible assets is allocated
based on the country of destination of sales at date of application of IFRS 8
Operating Segments or date of acquisition, if later.


Operating profit performance in the drinks industry is not characterised by
significant cyclicality. Operating profit before exceptional items for the
financial year ended 28 February 2013 was split H1: 58% and H2: 42%.


                  2013                                         2012
                     Continuing    Discontinued    Total       Continuing    Discontinued    Total
                     operations       operations                     operations       operations
                     €m               €m                 €m          €m               €m                 €m
Restructuring        1.2              -                  1.2         4.6              -                  4.6
Acquisition          3.3              -                  3.3         -                -                  -
Recovery of
previously           (1.0)            -                  (1.0)       (0.7             -                  (0.7)
IT systems
and                  1.1              -                  1.1         4.0              -                  4.0
benefit              -                -                  -           (14.7)           (0.1)              (14.8)
Revaluation of
property,            -                -                  -           2.0              -                  2.0
plant &
Loss from
discontinued         -                -                  -           -                1.1                1.1
recycled to          -                -                  -           -                0.7                0.7
the income
statement on
loss/(profit)        4.6              -                  4.6         (4.8)            1.7                (3.1)
before tax
Income tax        (0.3)         -               (0.3)    (0.4)         -               (0.4)
loss/(profit)     4.3           -               4.3      (5.2)         1.7             (3.5)
after tax

(a) Restructuring costs

Restructuring costs, comprising severance and other initiatives arising from
cost cutting initiatives and the consolidation of the Group's offices in the
UK and the US, resulted in an exceptional charge before taxation of €1.2m
(2012: €4.6m).

(b) Acquisition costs

During the current financial year, the Group completed the acquisition of the
Vermont Hard Cider Company, LLC (VHCC) in the US and had entered into a
contractual arrangement to acquire M&J Gleeson Investments Limited and its
subsidiaries (the Gleeson Group), which had not completed at year end. Costs
directly attributable to these acquisitions of €3.3m were charged to the
Income Statement in the period.

(c) Recovery of previously impaired inventory

During the financial year ended 28 February 2009, the Group’s stock holding of
apple juice at circa 36 months of forecasted future sales was deemed excessive
in light of anticipated future needs, forward purchase commitments and useful
life of the stock on hand. Accordingly the Group recorded an impairment charge
in relation to excess apple juice stocks. During the current and previous
financial year, some of the previously impaired juice stocks were recovered
and used by the Group. As a result this stock was written back to operating
profit at its recoverable value resulting in a gain of €1.0m (2012: €0.7m).
The Group has recovered total juice inventory of €1.9m for which an impairment
charge was recognised in FY2009.

(d) IT systems implementation and integration costs

During the current financial year, the Group incurred external consultant fees
and other costs associated with the integration of the previously acquired
Hornsby's brand with the Group's existing business.

In the prior year the Group had commenced the process of integrating the
acquired Hornsby’s brand and also had incurred costs associated with the
completion of the second phase of the IT systems implementation project with
respect to the migration of the Gaymers cider business onto a new IT system,
allowing the business to fully integrate with the existing Magners business.
These costs primarily related to external consultant fees and other costs
associated with the implementation of the new IT systems platform and which,
in accordance with IAS 16 Property, Plant and Equipment, were not appropriate
for capitalisation within Property, plant & equipment in the balance sheet.

(e) Retirement benefit obligations

In the prior financial year the Group recognised an exceptional gain of €14.8m
relating to:

  *the recognition of a past service gain, net of expenses, of €14.7m
    following the conclusion of the Group’s pension reform programme and the
    receipt of a Pensions Board direction under Section 50 of the Pensions Act
    1990, removing guaranteed pension increases and replacing them with a
    reduced level of guaranteed increase for three years commencing 2012 and
    thereafter for all future pension increases to be on a discretionary
    basis, resulting in a positive impact on the valuation of the Group’s
    retirement benefit obligations; and,
  *a curtailment gain of €0.1m arising from the Group’s disposal of the
    Northern Ireland wholesale business and the reclassification of these
    employees from active to deferred members.

The past service gain referred to above represents the difference between
liabilities valued using a pension increase assumption of 3% per annum versus
2.25% per annum, assumed to be the average discretionary increase rate.

(f) Revaluation of property, plant & machinery

Property (comprising land and buildings) and plant & machinery are valued at
fair value on the balance sheet and reviewed for impairment on an annual
basis. During the prior financial year, the Group engaged external valuers
Ronan Diamond BSc (Hons) MSCSI MRICS and Brian Gilson, BSc (Surv) MSCSI MRICS
MCI Arb - Lisney to value its freehold properties in the Republic of Ireland;
David Fawcett, FRICS RICS Registered Valuer - Sanderson Weatherall to value
its plant & machinery in the Republic of Ireland, and, Timothy Smith BSc MRICS
RICS Registered Valuer and Joseph ML Funtek BSc MRICS RICS Registered Valuer -
Gerald Eve to value both its freehold properties and plant & machinery in the
United Kingdom. This resulted in a net revaluation loss of €2.0m accounted for
in the income statement and a further net loss of €1.7m accounted for within
other comprehensive income on the basis that it reduced a revaluation surplus
previously recognised in respect of an asset in Clonmel and created a
revaluation surplus in respect of the Group’s Scottish buildings. The current
year valuations, carried out by management, did not result in a material
variation to the valuation at 29 February 2012.

(g) Loss from discontinued operations, net of tax/Recycling of Foreign
Currency Reserve on disposal

The loss on discontinued operations in the prior financial year of €1.1m
relates to a €0.1m profit arising on the disposal of the Group’s Northern
Ireland wholesaling business (Quinns of Cookstown) to Britvic Northern Ireland
Limited on 30 June 2011 for a gross consideration of €4.8m (£4.3m) and a loss
of €1.2m in relation to a working capital settlement to reflect ‘normalised
working capital’ as set out in the Sale and Purchase Agreement following the
FY2011 disposal of the Group’s Spirits & Liqueurs business. The Group also
recognised a loss of €0.7m on the recycling of a foreign currency reserve to
the income statement following the disposal of the Group’s NI wholesaling


                                                            2013    2012
                                                               €m         €m
Dividends paid:
Final: paid 4.5c per ordinary share in July 2012 (2012:        15.0       10.7
3.3c paid in July 2011)
Interim: paid 4.0c per ordinary share in December 2012      13.4    12.0
(2012: 3.67c paid in December 2011)
Total equity dividends                                      28.4    22.7
Settled as follows:
Paid in cash                                                   21.2       18.5
Accrued with respect to LTIP (Part I) dividend                 0.1        -
Scrip dividend                                              7.1     4.2
                                                           28.4    22.7

The Directors have proposed a final dividend of 4.75 cent per share (2012: 4.5
cent), to ordinary shareholders registered at the close of business on 24 May
2013, which is subject to shareholder approval at the Annual General Meeting,
giving a proposed total dividend for the year of 8.75 cent per share (2012:
8.17 cent). Using the number of shares in issue at 28 February 2013 and
excluding those shares for which it is assumed that the right to dividend will
be waived, this would equate to a distribution of €16.2m.

Dividends of 8.5 cent per ordinary share were recognised as a deduction from
the retained income reserve in the year ended 28 February 2013 (2012: 6.97

Dividends declared after the balance sheet date are not recognised as a
liability at the balance sheet date.


*Story too large*
Denominator computations                              Number     Number
                                                         ‘000          ‘000
Number of shares at beginning of year                    339,275       337,196
Shares issued in lieu of dividend                        1,934         1,370
Issue of new shares following acquisition of             1,422         -
Shares issued in respect of options exercised         1,701      709
Number of shares at end of year                       344,332    339,275

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