ANNUAL REPORT 2016 - CC ??CC GROUP PLC ANNUAL REPORT 2016 BUSINESS STRATEGY 05. Export North America CC Brands Brands Brands Brands Distribution Rights Scotland Brands Distribution

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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