CCR: C&C Group PLC: Interim Management Statement

  CCR: C&C Group PLC: Interim Management Statement

UK Regulatory Announcement


                         Interim Management Statement

Dublin, London | 3 July, 2013: C&C Group plc (“C&C” or the “Group”), a
manufacturer, marketer and distributor of branded cider and beer, today issues
an Interim Management Statement covering the period from 1March 2013 to the
date of this statement.

Performance Review and Outlook

Despite difficult trading conditions in the period to date, C&C currently
expects operating profit, for the 2014 financial year (“FY2014”), to be in the
range of €125m to €132m. The expected outcome represents year-on-year earnings
growth of between 10% and 16%. C&C has indicated that FY2014 will be a
transition period given the scale, scope and pace of acquisition activity in

The Group retains balance sheet strength and strong free cash flow
characteristics despite increased levels of capital investment planned for
FY2014. C&C expects to increase year-on-year cash conversion and to maintain
its progressive dividend policy.

International Cider Opportunity

The international cider category continues to grow and has attractive,
long-term prospects. In the first quarter, C&C delivered 77.7% volume growth
in international markets including the benefits of the Vermont Hard Cider
Company (‘’VHCC’’) acquisition. Despite a lower than expected Woodchuck volume
growth of 3% in the quarter, integration is progressing well. During the
transition phase, C&C expects a solid earnings contribution from the Group’s
North American business in a US$18m to US$22m range for FY2014 (which is
within the scope of the Group’s stated full year guidance). Given the Group’s
focus has been on business optimisation and commercial approach, C&C believes
that, for FY2014, earnings represents a more effective measure of VHCC’s
performance and prospects.

Integration of Gleeson Group

C&C completed the acquisition of the Gleeson Group, the leading wholesaler in
the Republic of Ireland (“ROI”), in March 2013. The acquisition demonstrates
the Group’s commitment to invest in ROI and belief in a multi-beverage
business model. The Gleeson business is now being combined with the Group’s
existing cider and beer business and will provide C&C with a platform to drive
growth across the market.

Stephen Glancey, C&C Group CEO, commented

“We are pleased to guide towards continued earnings growth for the current
financial year. We remain focused on developing our multi-beverage capability
in core markets and investing in customers through our trade lending model.
Our Tennent’s business has again performed well and provides a degree of
balance to a competitive UK cider market. We believe that the Shepton Mallet
Cider Mill division is a positive step towards capitalising on the inherent
potential of the Gaymers portfolio and will be a distinguishing factor for C&C
during the next phase of cider growth in the UK and Ireland.

We remain confident in the attractive prospects of international cider. While
we have not meaningfully participated in the category growth in the US this
quarter, our fundamental assumptions about the attractiveness of the cider
category in the US and the broader opportunity for our portfolio in
international markets remain unchanged. We expect to continue to reduce
operating costs, deliver earnings growth and to enjoy the benefits of balance
sheet strength.”

First Quarter (“Q1”) Review

Trading conditions in the Group’s core Irish and UK markets were difficult in
Q1 and are expected to remain so for the remainder of the year. Volumes were
generally weaker in March and April driven by unseasonably cold weather with a
relative improvement in May. Despite the challenging trading in the cider
category, C&C continues to invest in its core Bulmers and Magners cider brands
with the launch of the new ‘Now is a Good Time’ marketing campaign.

  *In Q1, ROI cider and beer volume declines (which exclude Gleesons) were
    primarily driven by lower off-trade activity, with the on-trade channel
    proving more robust in the period.
  *In Cider UK, Q1 volumes declined in both Magners and Gaymers brands with
    over 85% of the volume loss driven by the off-trade channel which remains
    intensely competitive.
  *Tennent’s continued to perform well in the Scottish on-trade channel
    despite a weak beer market with total branded volumes increasing by 7% in
    the independent free trade in Q1.
  *International showed steady volume growth from Gaymers, modest growth from
    Woodchuck and a decline in Tennent’s, Magners and Hornsby’s volumes in the
  *Third Party Brands performed well in Q1 with increased own-label activity
    across both cider and beer contributing to contract manufacturing volume

Republic Of Ireland*                     3 months ended 31 May
Volume                                   (11.5%)
Net Revenue (constant currency)          (13.0%)
Cider Volume                             (13.4%)
Beer Volume                              (1.7%)
*Note: Q1 RoI Volume and Net Revenue does not include Gleeson Group
Cider UK                                 3 months ended 31 May
Volume                                   (22.2%)
Net Revenue (constant currency)          (24.0%)
Magners Volume                           (19.9%)
Gaymers Volume                           (25.5%)
Tennent’s UK                             3 months ended 31 May
Volume                                   (12.4%)
Net Revenue (constant currency)          (6.1%)
International*                           3 months ended 31 May
Volume                                   +77.7%
Net Revenue (constant currency)          +76.6%
*Note: Q1 Volume and Net Revenue includes VHCC

Third Party Brands                       3 months ended 31 May
Volume                                   +18.9%
Net Revenue (constant currency)          +7.5%


About C&C Group plc

C&C Group plc is a manufacturer, marketer and distributor of branded cider and
beer. The Group manufactures Bulmers, the leading Irish cider brand, Magners,
the premium international cider brand, the Gaymer Cider Company 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’s Irish wholesaling subsidiary, Gleeson Group,
manufactures Tipperary Water and Finches soft drinks. The Group also
distributes Bavaria beer in Ireland and 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 the specific factors discussed on page 39 and 40
of the 2013 Annual Report, that could cause actual results to differ
materially from those anticipated.

C&C Group plc | Contacts

C&C Group:
Alan Daly
Head of IR
Tel: +353 1 654 6239

Investors & Analysts:
Mark Kenny/Jonathan Neilan
FTI Consulting
Tel: +353 1 663 3686

Media Dublin:
Paddy Hughes
Tel: +353 1 260 5000

Media London:
Robert Ballantyne/Shanshan Willenbrock
Cardew Group
Tel: +44 20 7930 0777


C&C Group PLC
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