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ANNUALREPORT2016
C&C Group is a manufacturer, marketer and distributor of branded cider, beer, wine, soft drinks and bottled water.
C&C Group manufactures Bulmers the leading Irish cider brand, Magners the premium international cider brand, the C&C Brands range of English ciders and the Tennents beer brand.
C&C Group owns and manufactures Woodchuck and Hornsbys, two of the leading craft cider brands in the United States.
C&C Group distributes a number of beer brands in Scotland, Ireland and Northern Ireland, primarily for Anheuser-Busch InBev, and owns Wallaces Express, a Scottish drinks wholesaler.
The Groups Irish wholesaling subsidiary, Gleeson group, owns and manufactures Tipperary Water and Finches soft drinks.
C&C Group is headquartered in Dublin and its manufacturing operations are based in Co. Tipperary, Ireland; Glasgow, Scotland; and Vermont, US. C&C Group plc is listed on the Irish and London Stock Exchanges.
This report includes forward-looking statements, including statements concerning current expectations about future financial performance and economic and market conditions which C&C Group believes are reasonable. However, these statements are neither promises nor guarantees, but are subject to risks and uncertainties, including those factors discussed on pages 24 to 26 that could cause actual results to differ materially from those anticipated.
ABOUT C&C GROUP
CONTENTS
Global Opportunity
Market Operation
Chairmans Statement
Group Chief Executive Officers Review
Strategic Report Strategy and Business Model
Strategic Report Strategy Achievements and Priorities
Strategic Report Key Performance Indicators
Strategic Report Principal Risks and Uncertainties
Operations Review
Group Chief Financial Officers Review
Corporate Responsibility
Business & Strategy
Governance
Financial Statements
04
06
08
10
18
20
22
24
28
38
44
Board of Directors
Directors Report
Directors Statement of Corporate Governance
Report of the Remuneration Committee on Directors Remuneration
Statement of Directors Responsibilities
54
56
60
72
91
94
98
99
100
101
102
103
104
105
118
185
187
Independent Auditors Report
Group Income Statement
Group Statement of Comprehensive Income
Group Balance Sheet
Group Cash Flow Statement
Group Statement of Changes in Equity
Company Balance Sheet
Company Statement of Changes In Equity
Statement of Accounting Policies
Notes Forming Part of the Financial Statements
Financial Definitions
Shareholder and Other Information
VIEW THIS REPORT ONLINEcandcgroupplc.com orcandc.annualreport16.com
NET REVENUE
662.6mdecreased by 3.1%
ADJUSTED DILUTED EARNINGS PER SHARE
24.2 cent per share down 11%
OPERATING AND STRATEGIC HIGHLIGHTS
OPERATING PROFIT
103.2mbefore exceptional items down 10.3%
PROPOSED FINAL DIVIDEND
8.92 centper share an increase of 27.4% delivering 18.7% growth in full year dividend to 13.65 cent per share
OPERATING MARGIN
15.6%before exceptional itemsdown 1.2 ppts on prior year
FREE CASH FLOW CONVERSION
103.1%before exceptional items an increase of 41.8 ppts on prior year
NET DEBT
163.0mat the year-end giving a leverage ratio of net debt: EBITDA of 1.3x
SHARE BUYBACK
76.6m100m expected to be complete by July 2016
PROFITABILITY
CASH
SHAREHOLDER RETURN
02
Business & Strategy
For the next year, we look forward to the continuing strong performance of our export business; renewed growth in the US; a sustained recovery for Magners in our C&C Brands business; and a stronger performance in both Scotland and Ireland.
Read more in the Chairmans Statement on page 8
...the Groups long term strategy of strong domestic brand geographic combinations providing the foundation to participate in international cider growth remains unchanged.
Read more in the Group Chief Executive Officers Review on page 10
IN THIS SECTION
Global Opportunity
Market Operation
Chairmans Statement
Group Chief Executive Officers Review
Strategic Report Strategy and Business Model
Strategic Report Strategy Achievements and Priorities
Strategic Report Key Performance Indicators
Strategic Report Principal Risks and Uncertainties
Operations Review
Group Chief Financial Officers Review
Corporate Responsibility
04
06
08
10
18
20
22
24
28
38
44
Exportingto over 60 markets globallyAlbaniaAndorraAustraliaAustriaAzerbaijanBahamasBahrainBelgiumBermudaBrazilBulgariaBritish Virgin IslandsCambodiaCanadaCayman IslandsChinaCosta RicaCyprusCzech Republic DenmarkEstoniaFinland
FranceGermanyGhanaGibraltarGreeceHong KongHungaryIndiaIsraelItalyJapanLatviaLithuaniaLuxembourgMalaysiaMaltaNetherlandsNew ZealandNorwayPhilippinesPolandPortugalPuerto Rico
QatarRomaniaRussiaSingaporeSouth AfricaSouth KoreaSpainSri LankaSt. LuciaSt. MaartenSwedenSwitzerlandTaiwanThailandTrinidad & TobagoTurkeyUAEUkraineUnited KingdomUSUS Virgin IslandsVietnam
GLOBAL OPPORTUNITY
04
Exportingto over 60 markets globally
C&C GROUP PLC ANNUAL REPORT 2016 BUSINESS & STRATEGY
05
Export
NorthAmerica
C&CBrands
Brands
Brands
Brands
DistributionRights
ScotlandBrands
DistributionRights
IrelandBrands
DistributionRights
Bulmers is ROI only. Magners is NI only.
Budweiser is NI only.
MARKET OPERATION
06
Export
NorthAmerica
C&CBrands
Brands
Brands
Brands
DistributionRights
ScotlandBrands
DistributionRights
IrelandBrands
DistributionRights
Bulmers is ROI only. Magners is NI only.
Budweiser is NI only.
IRISH CIDER BRANDSBulmers Original is a premium, traditional blend of Irish cider with an authentic clean and refreshing taste.
Magners is a premium, traditional blend of Irish cider with a crisp, refreshing flavour and a natural authentic character.
Also in the range are the Bulmers and Magners Forbidden flavours range which includes Cloudy Lemon, Strawberry & Lime, Juicy Pear and Berry.
ENGLISH CIDER BRANDSGaymers is a clean, crisp, easy drinking medium cider made using the finest English apples.
Blackthorn is a West Country legend and one of the countrys best known and widely drunk ciders due to its secret blend of bittersweet English cider apples. The range includes Blackthorn Gold, Blackthorn Dry and Black n Black.
Ye Olde English is a traditional medium dry cider made using a unique blend of dessert and cider apples to deliver a deliciously refreshing taste.
Addlestones is a naturally cloudy premium cider that is twice fermented but never filtered to deliver its unique, smooth taste.
Chaplin & Corks is an award winning range of exquisite ciders made using pure juice from the finest English cider apples. The range includes Somerset Gold and Somerset Reserve.
K cider is a full strength, premium cider expertly pressed with a unique blend of English cider apples to deliver a full bodied flavour and rich golden colour.
Other English cider brands include Natch, Special VAT and Taunton Traditional.
AMERICAN CIDER BRANDS Woodchuck Hard Cider is a premium hard cider handcrafted in Vermont, US from the highest quality ingredients while offering an innovative range of ciders. Gumption is the newest style in our Woodchuck family and pairs the fresh juice of common eating apples with dry European bittersweet cider apples. The bold packaging and active lifestyle delivers a new energy to the Woodchuck brand family.
Wyders Hard Cider was formulated in 1987 by cider master Ian Wyder and is now available throughout the central and western United States.
Hornsbys is a cider which combines traditional cider-making techniques with an American heritage. It comes in two styles, Crisp Apple and Amber Draft.
BEER BRANDSTennents Lager is brewed to the highest standards to create a lager with a crisp taste and refreshingly clean finish. Tennents has been made with pride in the heart of Glasgow since 1885, but is famous far beyond its home city. Tennents Lager is Scotlands best-selling lager.
Tennents Black T is brewed in Glasgow using finest natural ingredients, including 100% Scottish barley. It is a golden lager with a well-rounded flavour and a distinct smooth maltiness.
Caledonia Best is a modern, distinctive ale that is balanced, sweet and smooth, with a malty roast flavour and a pleasant hoppy bitterness.
Heverlee is a premium Belgian Beer, which is endorsed by the Abbey of the order of Prmontr, in the town of Heverlee in Leuven.
Clonmel 1650, named after one of the most historic events in the town of Clonmel, is a fine example of a pilsner style lager with a slightly fruity estery nose and a subtle hoppy character.
Other beer brands include Tennents Beer aged with Whisky Oak, Tennents Extra, Tennents Scotch Ale, Tennents 1885 and Roundstone Irish Ale.
WINE AND SPIRIT BRANDSThe Groups portfolio of wine and spirit brands sold in the on-trade includes the Oliver & Gregs and Moondarra wine brands, Odessa Vodka and Squires Gin.
The Group also distributes a number of wine brands in the R
