Strategic Report - Group Strategy

The core of the Group's strategy is driving an integrated, brand-led approach with leading route-to-market capability and having the critical strength and scale to deliver for both our on and off-trade customers.

The primary pillars of the Group's strategy are:

Invest and grow our portfolio of leading local, super-premium and craft beer and cider brands.

Medium term strategic goals

  • Brand and product investment to build value of key brands over the long-term.
  • Leverage key brand strength and market position to grow our portfolio of super-premium and craft brands.
  • Successful brand development and launches to meet changes in consumer demand.
  • Build on “partnership for equity" brand relationship to provide route to market access.

Measurement

  • Cash generation and conversion
  • Revenue growth
  • Enhanced margins
  • Share growth and brand health scores

Strengthen the Group's position as the preeminent brand-led, "final-mile" drinks distribution business in the UK and Ireland.

Medium term strategic goals

  • Continue the optimisation of the Matthew Clark and Bibendum businesses.
  • Deliver unrivalled portfolio strength, value and service to the UK and Irish hospitality sectors.
  • Commercialising the unrivalled data and insight on the hospitality sector.

Measurement

  • Margin expansion at Matthew Clark and Bibendum

Ensure the efficient allocation of capital to enhance growth and Shareholder returns.

Medium term strategic goals

  • Strengthen its key capabilities across digital and technology to improve the customer journey and drive efficiencies.
  • Committed to delivering on its ESG objectives which form part of the integrated strategy.
  • Target balance sheet leverage of below 2.0 X net debt / EBITDA.
  • Selective acquisitions to fuel sustainable, profitable growth and/or cash returns to shareholders.

Measurement

  • Net Debt/EBITDA
  • Balance Sheet strength
  • EPS growth
  • ROCE

With the challenges presented by COVID-19 in FY2021, the focus for the Group has been around securing the near term of the business, ensuring the health and wellbeing of our stakeholders, supporting our customers and maximising available liquidity. The Group's performance from an operational and financial perspective during the COVID-19 pandemic has demonstrated the important role the Group has to play in the success of the UK and Ireland on-trade channel and demonstrated C&C’s structural importance to the sector. Despite the challenges, we have continued to develop and execute our strategy through FY2021 to put ourselves in a position of strength as the hospitality sector returns during FY2022.

Strategic Goals

Achievements during FY2021
  • Our core brands demonstrated their continuing strength in FY2021 by growing off-trade volume share. 
  • Tennent’s off-trade volume and value share of lager of 26.5% and 21.6% respectively as at 21 February 2021 represents growth of 1.1% and 0.7%. 
  • Bulmers off-trade volume and value share of cider of 50.5% and 50.8% respectively as at 28 February 2021 represents growth of 3.7% and 4.3%. 
  • Magners’ volume share of apple cider in the off-trade has grown to 9.7% as at 21 February 2021 representing growth of +0.4%.

Achievements during FY2021

Demonstrated the strength of the Group’s brand led distribution model, and the fundamental role it occupies in the infrastructure of the UK and Irish drinks market, with a return to profitability and underlying cash generation when trade restrictions were eased in July, August and September 2020. This was underpinned by a market leading NPS score.

Achievements during FY2021

Exclusive distribution deals completed during FY2021, including: extending our partnership with Budweiser Brewing Group in Ireland to include exclusive distribution of Budweiser; Tito’s Handmade Vodka in the UK, the #1 selling spirit brand in the USA; and most recently Innis & Gunn, Scotland’s #1 craft beer, where C&C received an 8% equity stake at only the cost of nominal share capital, in return for supplying Innis & Gunn with access to the independent free trade in its core markets.

Achievements during FY2021

Meeting growing consumer demand for ‘no and low’ alcohol alternatives, C&C launched the Tennent’s Zero and Tennent’s Light brand extensions which have outperformed expectation in the off-trade. In addition, our own hard seltzer brands have been launched in Ireland through Seven Summits and Shard in Scotland which is the UK’s only draught seltzer.

Achievements during FY2021

Optimisation of the English and Scottish distribution delivery networks, consolidating the volumes from three separate networks into two, bringing all English final mile distribution in house. In turn, rationalising our depot footprint, improving our service offering and driving ongoing efficiencies and enhanced future margins. Further, the optimisation work supports the Group's sustainability agenda by eliminating transport inefficiencies and reducing product miles travelled and CO2 emissions.

Achievements during FY2021

As a response to COVID-19, taking action to address our fixed cost base with a cost streamlining programme to deliver annualised savings of €18 million against the pre COVID-19 cost base.

Achievements during FY2021

Diversified and strengthened the Group’s capital structure and sources of debt finance by issuing approximately €140 million of US private placement notes in March 2020.

Achievements during FY2021

Improving the customer experience with our Tennent’s Direct and Matthew Clark Live ecommerce platform as customers accelerate their use of technology, developing: real time stock information; guest checkout and automated online account setup. With the Matthew Clark Live platform awarded, ‘Best Business to Business’ and ‘Best Food & Drinks’ ecommerce sites at the UK eCommerce Awards 2020. In addition, we continued to develop our proprietary data assets during FY2021, signing an agreement with SalesOut, a leading data company, to augment our in-house assets.

Achievements during FY2021

Invested €7.8 (£7.0) million into our Wellpark Brewery which will eliminate the use of the single use plastic at the site during 2021, removing 150 tonnes of plastic annually. A further €3.0 (£2.7) million has been invested into an innovative carbon capture facility, the largest in Scotland, which will allow the brewery to store and utilise over 4,200 tonnes of CO2 per year.

Achievements during FY2021

Divestment of non-core assets including the Tipperary Water Coolers business in Ireland. Post year-end we completed the disposal of Vermont Hard Cider Company in the USA for a total consideration of USD 20 million which has been applied to reduce net debt.