C&C Group Plc
15 November 2007
Reorganisation & Cost Reduction Programme
Programme expected to deliver €10 million in net savings
New Managing Director of Magners - Great Britain to be appointed
CCR.I CCR.L
Dublin, London, 15 November, 2007: C&C Group plc ('C&C' or the 'Group'), a
leading manufacturer, marketer and distributor of branded beverages in Ireland
and the UK, today announced a re-organisation and cost reduction programme. The
programme is expected to deliver €10 million of net annual savings when fully
complete.
Reorganisation and Cost Reduction and Programme
The primary objectives of the cost reduction and re-organisation programme
include:
- Strengthening C&C's commercial presence and management team in Great
Britain, its principal cider market;
- Reducing operating costs by realigning the cost structure to the current
sales volume base;
- Streamlining C&C's organisation structure by merging its Head Office and
Cider division management structures.
Organisation Structure
Maurice Pratt, C&C Group CEO will, on the retirement of Brendan McGuinness,
Managing Director of the Group Cider division, incorporate Brendan McGuinness'
role into his existing role as Group CEO. Brendan McGuinness has recently
announced his intention to retire with effect from 1st May, 2008.
The Group is creating the new role of Managing Director Magners - Great Britain.
This role will spearhead the growth and further development of Magners within
Great Britain, C&C's largest cider market. The appointment will be accompanied
by an increase in sales and marketing resources in Great Britain to meet the
current challenges of that market. The recruitment process for this position is
underway and C&C will announce an appointment in due course.
The Group is also combining the Manufacturing, Logistics, Purchasing and
Technical functions under a new position of Managing Director - Supply Chain.
Aidan Murphy, the current Director of Logistics, is being appointed to this
position.
Cost Reduction Programme
C&C will deliver cost savings through a reduction in headcount across all
functions at C&C's manufacturing facility in Clonmel and at its Head Office. C&C
also plans to deliver cost savings in warehousing, stock management and a range
of other areas within the supply chain function. The combined payroll and other
savings are estimated at €20m and involve a headcount reduction in the region of
150 across the Group.
In assessing the impact of the cost reduction programme on Group's financial
performance it is necessary to factor in the general upward pressure on costs
and specifically the c. 15% increase expected in ingredient costs in 2008/09.
In this context the pro-forma impact, on the basis of estimated 2007/08 volume
and revenue, would be an operating margin improvement for C&C's Cider division
in a full year of approximately two percentage points - representing a net cost
saving of €10m. C&C would expect 80% of the improvement to be reflected in the
2008/09 financial year.
The reorganisation and cost reduction programme, comprising severance and other
costs, will result in an exceptional charge in the current financial year of
approximately €15 million.
Maurice Pratt, C&C Group CEO, commented "Our reorganisation and cost reduction
programme reflects our sharper product focus on cider and spirits & liqueurs
following the sale of our Soft Drinks and Snacks businesses. When this programme
is implemented, we will have a more efficient organisation structure and our
cost base will be better aligned with the Group's business needs."
He added "We are also investing in increased resources for Magners in Great
Britain to support our growth aspirations in that market."
He concluded "This re-organisation and cost reduction programme will affect a
number of C&C's employees which is regrettable. We would like to record our
appreciation for the commitment and loyalty of the affected workforce."
About C&C Group plc
C&C Group plc is a leading manufacturer, marketer and distributor of branded
beverages in Ireland and the UK. C&C manufactures the leading Irish cider brand,
Bulmers, and the premium international cider brand, Magners, for export to the
United Kingdom, the United States and Continental Europe. C&C also exports
spirits and liqueurs, including the premium Irish whiskey brand, Tullamore Dew,
to over 80 international markets.
Investors and analysts Irish Media International Media
Mark Kenny/Jonathan Neilan Paddy Hughes/ Ann-Marie Curran Edward Orlebar or Charlotte Kirkham
K Capital Source Drury Communications M Communications
Tel: +353 1 631 5500 Tel: +353 1 260 5000 Tel: +44 207 153 1523/1531
Email: Email: Email: orlebar@mcomgroup.com
c&cgroup@kcapitalsource.com phughes@drurycom.com kirkham@mcomgroup.com
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