RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2023
Solid underlying performance with branded businesses performing strongly
Intention that €150m will be distributed to shareholders over the next three fiscal years whilst maintaining leverage target of 1.5x to 2.0x

26 October 2023 | C&C Group plc (‘C&C’ or the ‘Group’), a leading, vertically integrated premium drinks company which manufactures, markets and distributes branded beer, cider, wine, spirits and soft drinks across the UK and Ireland announces results for the six months ended 31 August 2023 (‘H1 FY2024’).

FINANCIAL SUMMARY
• Net revenue broadly in line with H1 FY2023 despite one-off disruption of the ERP System implementation (‘ERP’). Strong performance in branded revenues which increased 6.9%.
• Operating profit of €30.5m(iii), down €22.8m(i) principally driven by a one-off c.€22m ERP impact. The Group’s GB distribution business was breakeven in H1 FY2024 despite these challenges.
• Operating profit in the branded business was up 4.6%(i) to €25.2m(iii). Branded margins were solid at 14.5%(iii) as pricing actions offset most of the inflationary impacts on the Group’s cost base.
• Net debt(vi) to adjusted EBITDA(ii) of 2.1x is marginally higher than our target range, due to the one-off ERP impact. Group leverage target of 1.5x to 2.0x for February 2024 reaffirmed. Net debt excluding leases(vii) to adjusted EBITDA(ii) was 1.6x in H1 FY2024.

OPERATING HIGHLIGHTS
• Robust performance in Ireland and Scotland. Bulmers and Tennent’s delivered revenue growth of 9.1%, maintaining clear market-leading positions(viii)(xii)(xiii).
• Premium beer portfolio recorded revenue growth of 23.1% with volume growth of 16.8%.
• Service levels, defined as On-Time-In-Full (‘OTIF’), now restored to pre-ERP implementation levels in GB Distribution business.
• Continued progress in delivering the Group’s ESG and sustainability agenda, including the commissioning of a 1 MW heat pump system in our Clonmel site.

DIVIDEND AND CAPITAL RETURNS
• Interim dividend of 1.89 cent per share.
• Reflecting the Board’s confidence in the business and its strong cash generation characteristics, the Board intends to distribute up to €150m to shareholders over the next three fiscal years, through dividends and other capital returns as deemed appropriate at the time, while maintaining leverage target(vi)(ii) of 1.5x to 2.0x.

OUTLOOK
• Service levels have been restored to pre-ERP implementation levels and our priority in H2 FY2024 will be ensuring we deliver outstanding service to our customers, win back customers and improve operating efficiency.
• Operating environment challenges are expected to persist with continued cost pressure over the next 12 months, before some easing in FY2025, following which we target an increase in branded margins as we continue to take pricing and cost actions and improve operating efficiency.
• We are at an advanced stage of the CFO recruitment process, and we will provide an update in due course.

Patrick McMahon, C&C Group Chief Executive Officer, commented:
“Set against a difficult market backdrop we are pleased with the strength of the performance of our branded businesses in Ireland and Scotland in the period. We have made significant progress in restoring customer service levels following the ERP system implementation issues in our GB distribution business within our planned timeframe. Delivering outstanding service, winning customers, continued business simplification and improved operating efficiency remain our top priorities and focus for the second half. We are also pleased to announce today our intention to distribute up to €150m to shareholders over the next three fiscal years through dividends and capital returns, while maintaining leverage(vi)(ii) within our target range of 1.5x to 2.0x.”

Notes to Operating Review are set out below
i. On a constant currency basis; H1 FY2023 comparative adjusted for constant currency (H1 FY2023 translated at H1 FY2024 FX rates) as outlined on pages 10-11.
ii. Adjusted EBITDA is earnings before exceptional items, finance income, finance expense, tax, depreciation and amortisation. A reconciliation of the Group’s operating profit to adjusted EBITDA is set out on page 9.
iii. Before exceptional items.
iv. Adjusted basic/diluted earnings per share (‘EPS’) excludes exceptional items. Please see note 5 of the
Condensed Consolidated Financial Statements.
v. Free Cash Flow (‘FCF’) that comprises cash flow from operating activities net of tangible and intangible cash outflows which form part of investing activities. FCF highlights the underlying cash generating performance of the ongoing business. FCF benefits from the Group’s purchase receivables programme which contributed €121.7m (FY2023 H1: €109.7m as reported or €110.0m on a constant currency basis). A reconciliation of FCF to net movement in cash per the Group’s Cash Flow Statement is set out on page 9.
vi. Net debt, including the impact of IFRS 16, comprises borrowings (net of issue costs), lease liabilities
capitalised less cash. Please see note 8 of the Condensed Consolidated Financial Statements.
vii. Net debt is net debt excluding the impact of IFRS 16 lease liabilities. Please see note 8 of the Condensed
Consolidated Financial Statements.
viii. CGA OPM 52 weeks to 12.08.2023.
ix. CGA OPM 4 weeks to 12.08.2023.
x. CGA OPM 2023 Period 2 to period 8 (29.01.2023 to 12.08.2023).
xi. CGA OPM 12 weeks to 12.08.2023.
xii. CGA OPM 52 weeks to 31.08.2023.
xiii. NielsenIQ 52 weeks to 10.09.2023.