Interim Management Statement

Interim Management Statement

C&C Group PLC

Interim Management Statement

C&C Group plc (‘C&C’ or the 'Group’), a leading manufacturer, marketer and distributor of branded cider and beer principally in ROI and the UK, today issues the following Interim Management Statement covering the period from 1 March 2012 to the date of this statement.

PERFORMANCE REVIEW & OUTLOOK

Operating profit for the full financial year is expected to be in the range of €112m to €118m. While poor weather in the UK and Ireland resulted in weak cider numbers for the first quarter, Tennent’s performed well in the difficult trading conditions and continues to grow its earnings. Export also enjoyed a good quarter with the addition of the Hornsby’s brand complementing steady organic growth.

The core cider business will see an increase in commercial support and brand activity over the next nine months and we anticipate a recovery in volume and revenue.

Stephen Glancey, C&C Group CEO, commented “Despite a challenging quarter and tough consumer backdrop, we are confident that our resilient business model and strong brand market combinations will deliver continued earnings growth for the full year and maintain our business momentum.”

SEGMENTAL OVERVIEW | 3 MONTHS TO 31 MAY 2012

Republic of Ireland (‘ROI’)⁽ⁱ⁾

• Total volume down (1.1%); cider down (5.4%); beer up +29.6%. Tennent’s brands up +47.6%.
• Net revenue down (11.5%)

The long alcohol drinks (‘LAD’) market in ROI was very volatile in the first quarter. The month of April was particularly difficult with volumes down 5% across both channels and off-trade price deflation of over 6% (Nielsen). Volumes improved with a spell of good weather towards the end of May and the beginning of key summer events, highlighting the resilience of the Bulmers brand. Tennent’s continues to grow volume in the Irish market and is now pouring in over 1,200 on-trade outlets in ROI. The recent launch of Caledonia Smooth has been well received in the on-trade and initial feedback is encouraging.

(i) ‘ ROI’ includes Cider ROI, Tennent’s and Third Party Brands sold in the Republic of Ireland

Cider UK⁽ⁱ⁾

• Volume down (21.6%), net revenue⁽ⁱⁱ⁾ down (25.1%)
• Magners volume down (21.8%), net revenue⁽ⁱⁱ⁾ down (25.5%)
• Gaymers portfolio volume down (21.5%); net revenue⁽ⁱⁱ⁾ down (24.3%)

The GB LAD market was weak in the first quarter. Poor weather resulted in an off trade cider category that was down 26% (Nielsen) in April against strong comparatives last year. The dip in consumption inevitably contributed to some overstocking in the supply chain and consequential pressure on retail pricing. The percentage decline in the Magners brand also reflects a strong market share performance in the first quarter last year. Looking forward, levels of support and commercial activity around the brand will step up and we expect to see volume and revenue recover as the year progresses.

Volume and revenue declines for the Gaymers business in the quarter are in line with the negative trends of the later part of FY2012. There are early signs of encouragement from the re-launch of the Gaymers brand in May and comparatives begin to ease from the second quarter as the business laps the end of significant contract volume losses last year.

Export ⁽ⁱⁱⁱ⁾

• Total volume up +62.9%; net revenue⁽ⁱⁱ⁾ up +47.4%
• Excluding Hornsby’s, volume up +28.0%; net revenue⁽ⁱⁱ⁾ up +14.6% ^(iv)

In our key Export markets cider continues to show strong growth. Depletion data in Australia and North America are encouraging for both the category and our brands. We expect to see the growth trend continue over the next 9 months of the financial year.

Export of the Tennent’s brand to a number of new markets commenced in the period, including North America and Italy. Initial feedback is positive. The Tennent’s brand accounted for 12% of our export volume in the quarter.

The Hornsby’s brand is trading steadily. The deferred payment to E&J Gallo was settled in the period following successful attainment of the targets laid out in the transitional services agreements. Integration is progressing according to plan.

Group Export activity continues to grow in scale and relevance. Total export volume for the quarter equated to over 40% of ROI volume.

Tennent’s UK

• Tennent’s UK volume down (6.0%); net revenue⁽ⁱⁱ⁾ up 5.4%
• Improved price/mix of 11.4%

Tennent’s in the UK recorded another robust performance in the first quarter with positive price/mix compensating for volume declines in a Scottish beer market that was down over 1% in the period (Nielsen CGA). Tennent’s continues to outperform in the independent free trade (IFT) channel with volumes shipped growing +5% for the period. In the off-trade, the market’s focus on value depressed overall brand volume in the period but the impact of improved pricing on the revenue line has been very positive. The rollout of Caledonia Best is progressing well with distribution and throughputs in line with internal plans.

(i) ‘Cider UK’ includes sales in Northern Ireland and Great Britain

(ii) On a constant currency basis

(iii) ‘Export’ includes sales of the Group’s cider brands and beer brand, Tennent’s, in all territories outside of the UK and ROI

(iv) The net revenue growth reported is lower than the underlying growth as a consequence of the change in accounting for the new distribution agreement with Suntory in Australia. Like for likes will normalise in the second half of FY2013.

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 Bulmers, the leading Irish cider brand, Magners, the premium international cider brand, the Gaymer Cider Company range of branded and private label ciders and the Tennent’s beer brand. C&C also owns Hornsby’s, a leading craft cider brand in the United States. The Group also distributes a number of beer brands in the Scottish, Irish and Northern Irish markets, primarily for Anheuser-Busch Inbev.

Note regarding forward-looking statements

This announcement includes forward-looking statements, including statements concerning expectations about future financial performance, economic and market conditions, etc. These statements are neither promises nor guarantees, but are subject to risks and uncertainties that could cause actual results to differ materially from those expected.

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