C&C Releases Results For FY2020

By Dave Simpson
C&C Releases Results For FY2020

Bulmers cider manufacturer C&C Group plc has released its results for the twelve months that ended on February 29, 2020 (FY2020), revealing that its net revenue rose 7.8% during the period while its operating profit rose 10.4%.

C&C recorded adjusted diluted EPS growth of 10.5% along with a 2.8c impact to basic EPS 2.8c by exceptional items.

The group also recorded free cash flow of €136.5 million, which represents 103.5% of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), and its net debt/adjusted EBITDA reduced to 1.77x from 2.51x at the end of the same period last year.

Additonally, C&C's exceptional items (pre-tax) amounted to €92.5 million, with €47.6 million of this being directly related to COVID-19 and €34.1m being related to the write down of Vermont brands.

Current Trading Update

C&C stated that approximately €140 million worth of US Private Placement (USPP) notes were successfully issued in March to diversify, strengthen and extend the maturity of the group's capital structure and sources of debt finance.


The group noted that the shutdown of the hospitality sector due to the continuing COVID-19 crisis has materially impacted its business, and no revenue has been generated in the on-trade channel since March.

C&C has reallocated and redeployed resources to meet the significant increase in demand through the off-trade

The group announced the expansion of its multi-year partnership with AB InBev, which will include the exclusive distribution of Budweiser and Bud Light in Ireland from July 1, 2020.

It also announced investment and extension of distribution operations in Scotland.

C&C said that it is maintaining liquidity of €550 million, with debtor securitisation facility currently being 36% utilised.


The group's underlying cash burn is €7 million per month while on-trade is closed. This is net of furlough employee support, which is currently approximately €5 million.

Interim Executive Chairman Statement

C&C Group interim executive chairman Stewart Gilliland stated, "The COVID-19 pandemic presents a challenge of unprecedented scale and uncertainty for our industry and supply partners. From the outset of the virus, our priority has been protecting the health and well-being of our people, customers, suppliers, business partners and community. We are continuously monitoring the advice provided by the health authorities and in line with that guidance, the group has implemented an extensive range of measures to provide the safest environment we can for our stakeholders.

"The ongoing closure of the hospitality sector has material implications for our business and earnings potential, with
approximately 80% of our revenue derived from the on-trade channel. An emerging trend from this shutdown,
however, has been an immediate shift in consumption dynamics, resulting in increased demand in the off-trade
channel. To capitalise on this behavioural shift, we have reallocated resources behind our take-home proposition
and seek to optimise our business model in this channel.

"We entered this crisis with a robust balance sheet and have further strengthened that position with additional
liquidity enhancing actions. The group successfully issued approximately €140 million of new US Private
Placement notes in March of this year. In addition, C&C received confirmation from the Bank of England that the
group is eligible to issue commercial paper under the COVID-19 Corporate Financing Facility (CCFF) Scheme.
The board believes that its existing liquidity position is more than sufficient for the group's current and expected

"We continue to work with our customers who face significant challenges to offer our support where possible to
overcome these difficulties together. Collaborating with our suppliers, we have been able to implement a range of
initiatives to support our customers.


"The group performed well in FY2020, with revenue growth of 7.8% and operating profit ahead by 10.4%, which
is testament to the execution of our long-term strategy. This performance underpinned the delivery of our double
digit EPS growth target, with adjusted diluted growth for the year at 10.5%, our second consecutive year of double
digit EPS growth. Cash generation remained strong, with conversion at 103.5% resulting in a net debt/EBITDA
position of 1.77x and ahead of our target of two times. At Matthew Clark, margins were 2.9% and Bibendum was
break-even for the year for the first time since acquisition.

"The progress of the group in FY2020 further strengthens our belief in the long-term strategy for the business. As
the largest alcohol distributor in the UK and Ireland, we have secured a unique platform, and our results for FY2020
reflect the strength of this position. In the short-term, execution of our strategy will be impacted by COVID-19, which
has necessitated the temporary withdrawal of our future guidance. Trading since the lockdown measures were
announced has clearly been challenging, however, our business is structurally integral to the markets we serve
and, together with our local, fabric brands, puts us in a strong position to re-engage with customers and consumers
once restrictions across pubs, bars and restaurants, are lifted."

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