Our Great Britain division’s net revenue increased 102.8%(i) to €1,213.8m in the year, driven by the reopening of the on-trade from May 2021, with strong growth in our branded volumes. As a result, the division generated an operating profit(iii) of €31.2m against a loss of €56.9m(i) in FY2021. The period has been characterised by an evolving backdrop of challenges including: supply chain constraints; inflationary pressures and periods of further COVID-19 disruption. We have embarked on a period of significant change with the announcement of One C&C GB, streamlining our GB, MCB and International business under one management team with the goal of optimising our support office function, improving customer service and executing the Group’s strategy.

Operational Highlights

Our customer service levels were impacted during FY2022 by widely publicised capacity constraints, driven by the ongoing issue of driver and warehouse operative shortages. As a result, a number of initiatives were implemented including: delivery day changes; increasing minimum order value to improve efficiency; and the simplification of our offering, for example we actively reduced the volume of less profitable water products we delivered. This, coupled with our inhouse logistics operation, with its significant size and scale, has ensured that we have broadly been able to meet customer demand throughout the period. We are pleased to report that Matthew Clark’s On Time In Full (“OTIF”), one of our key delivery metrics, has recovered from a low of c.73% in FY2022 to c.88% at February 2022, our target under normalised conditions is 96%.

As service stabilised in H2 FY2022, we are pleased to report that CSI (Customer Service Index) and NPS (Net Promotor Score) scores across our TCB, Matthew Clark and Bibendum business have been improving month by month through H2 FY2022.

Our manufacturing site at Wellpark in Glasgow, has continued to build its sustainability credentials, being voted as Sustainable Brewery of the Year at the Scottish Beer Awards. During COP26 in Glasgow, the site hosted dignitaries and events, showcasing the investments made in removing CO₂ (4,000 tonnes in FY2022) and eliminating 150 tonnes of single use plastic in the year. With the inflationary pressures, especially around aluminium and energy, we have introduced a lighter weight pint can for FY2023 and continue to focus on efficiencies at the site to drive down energy usage of which 100% is now generated from renewable sources. This will ensure that we have a competitive manufacturing cost base, whilst delivering on our sustainability commitments.

Following the reopening of the on-trade in January 2022, we are pleased to be trading with 79% of outlets in February 2022, compared with February 2020.

Brands

Tennent’s performance was aided by Scotland qualifying, for the first time in 23 years, for a major football championship. Our multi-channel advertising campaign and associated on and off-trade promotional activity helped in part to drive brand health improvement, with Tennent’s Lager’s brand index score increasing 230 bps from 14.6% to 16.9%(viii). Tennent’s off-trade volume share of 24.0% has fallen compared with FY2021 (24.6%), a reflection of Tennent’s benefitting in the previous year from supply chain disruption that competitor brands experienced as well as growth of the premium category(xi). Encouragingly though, FY2022 volume share is higher than FY2020 (22.9%)(xi). In the year, our Tennent’s lager IFT on-trade volumes have recovered back to 74% of FY2020 levels with direct delivered outlets recovering to 88% of FY2020.

For Magners, both volume and value share of GB off-trade apple cider declined, with a similar trend in the on-trade compared to last year(xi),(xii). Despite this, Magners Original remains the number 1 packaged apple cider by volume and value sales(xv) and the number 1 recommended apple cider brand amongst GB cider drinkers(xiv). Matthew Clark and Bibendum have continued to grow the outlet penetration of our cider brands in outlets purchasing cider to nearly 50%, a growth of c.3% compared to FY2020.

Premium beer, driven primarily by Heverlee, Menabrea, Drygate, Innis & Gunn and Jubel, grew its penetration of our Scotland IFT outlet base in FY2022 to 40% compared with 35% in FY2020. The rate of sale has also improved in FY2022 compared with FY2020, reflecting the move to premiumisation by consumers and improved targeting into the right outlet demographic. Despite the periods of on-trade closures, coupled with hospitality restrictions, Scotland IFT premium beer volumes reached 95% of FY2020 levels with both Menabrea and Innis & Gunn outperforming FY2020 volumes. In Matthew Clark and Bibendum, we have grown the outlet penetration of our premium beer brands, compared to total beer distribution outlets, by c.+30% versus FY2020. Our premium Belgian beer brand, Heverlee has reported strong brand health scores in the latest You Gov survey(xvi) and grown in GB off-trade, with volumes +19% and value sales +20%, driven by incremental distribution and new pack formats. Innis and Gunn, exclusive partner for the IFT in GB, has made considerable distribution gains in both Scotland, England, and Wales during FY2022.

Distribution

FY2022 volumes were materially impacted by restrictions in the year, further compounded by supplier product shortages impacting availability. In addition, our MCB business experienced an isolated cyber security incident on 19 April 2021 which we pro-actively managed, restoring all systems by the end of May 2021. During this period operational efficiency was negatively impacted, however the business remained open and continued to trade. With the reopening of the on-trade we are pleased to report volume growth of 59.1% on FY2021 with net revenue growth of 142.8%(i). During FY2022, we successfully retained a number of large distribution customers, however, we made the decision to stop delivering less profitable products or to some lower margin customers. We have been encouraged by the trend in spend per customer in Matthew Clark and Bibendum, where in the final nine months of FY2022, spend per customer was approximately +5% on FY2020. Together, during this period, TCB, Matthew Clark and Bibendum consistently delivered one in five equivalent drinks consumed in the GB on-trade.

Our position as the leading drinks distributor in GB has been reinforced by an exclusive sales and distribution agreement with Moët Hennessy in Scotland. The partnership will combine C&C’s market leading distribution in Scotland, with the strength of Moët Hennessy’s exceptional portfolio of luxury wines, spirits, and champagnes. Key to securing the partnership was the level of insight we had on the market, provided by PROOF, our inhouse data and insight business. PROOF Insight now has approximately one hundred international and domestic drinks brand owners and operators whom they work with either directly or who subscribe to PROOF assets.

Ecommerce

We launched an ecommerce platform for Bibendum, resulting in all of our operating businesses in GB providing customers with this offering. We have continued to enhance our existing MC and TCB ecommerce platforms, improving our customer experience through automated access, live chat and investment in platform security. Matthew Clark and TCB ecommerce revenue represent 57.6% and 54.8% of total IFT revenue respectively in February 2022, an increase from 39.5% and 37% in FY2020.

With the continued trend to online, we are retraining staff from the contact centre to support our ecommerce operations. We are pleased to report that we continue to see enhanced order sizes through our ecommerce platform compared with traditional contact centre orders. In H1 FY2022, we moved all promotional activity online, further promoting the use of online ordering amongst customers. Partly as a consequence, we are pleased to report that 60.2% of Matthew Clark’s IFT customers now order online. We believe we have a market leading platform which provides a frictionless and superior customer experience and it is our near-term target to drive 80% IFT revenue through ecommerce.

International

The international business performed well in FY2022, driven by a strong recovery in late Summer 2021, aided by tourist regions re-opening. Our volumes were 91% of FY2021 as they have been impacted by the sale our Vermont business in Q1 FY2022. Magners represented approximately 75% of total exports volume in FY2022. A price increase was successfully implemented in order to manage inflationary cost pressures. In one of our core markets, Australia, we signed a new distribution agreement with Good Drinks Australia Ltd. Lastly, our North American business has performed well, with Magners and Tennent’s volumes 11.1% higher than FY2020.

Our Ireland division’s net revenue increased by 34.0% to €224.3m in the year driven by the re-opening of the on-trade. As a result, Ireland generated an operating profit(iii) of €16.7m from a loss of €6.7m(i) in FY2021. With the re-opening of the on-trade, off-trade net revenues dropped by 0.5%(i) compared with FY2021. Our key focus in FY2022 has been stock availability and servicing the on-trade as it returned while planning and preparing for the implementation of minimum unit pricing (‘MUP’) in January 2022.

Operations Highlights

We are pleased to report that our Republic of Ireland business traded directly with 95% of outlets during February 2022 compared with February 2020. With the easing of restrictions in January 2022, over January and February 2022, on-trade volumes were at 84% of the equivalent period in FY2020. Customer service and meeting demand as the on-trade reopened has been a key focus. We have delivered a strong performance in FY2022 with customer OTIF in February 2022 of 97.8% compared with 98.0% in February 2020. Pre COVID-19, cider held a 12.5%(xvii) share of the Long Alcoholic Drinks (‘LAD’) category, across the combined on and off-trade. Over the last 2 years, we have seen this share grow further and as of February 2022, it represented 12.6%(xviii).

MUP was introduced in the Republic of Ireland in January 2022 which put in place a minimum sales price for a unit of alcohol. MUP was introduced in Scotland in 2018, and C&C has been able to use the data and learnings from the Tennent’s brand and apply them to Bulmers and the rest of our Irish portfolio. The Group optimised the off-trade portfolio in preparation for MUP by introducing new pack sizes, vessels sizes and ABVs.

Our Clonmel manufacturing site has invested €4.8m to eliminate single use plastic for all canned products from January 2022, which will remove approximately 150 tonnes of plastics from our products. Furthermore, the site has invested in the largest rooftop solar panel farm in Ireland which now generates 10% of the site’s electricity requirements. Further enforcing our sustainability credentials, we are now the only significant drinks manufacturer to use returnable pint bottles.

Brands

Bulmers launched the ‘When Time Bears Fruit’ advertising campaign in FY2022. This campaign was rooted in sustainability, targeting the important role that bees play in our environment and importantly in the pollination of our orchards. The campaign included TV advertising which saw Bulmers on the TV for the first time in three years. The latest brand health scores have seen Bulmers Original Brand Index improve +2.8%(ix), with our TV campaign helping to increase awareness. Encouragingly, Bulmers Light increased its brand health index +4.2%(ix), compared with last year, whereas competitor brand scores have moved backwards.

Bulmers is building momentum in the near-term, taking volume share in the off-trade in the latest 26 and 13 week market data, an indication of share gains since the introduction of MUP(x). Encouragingly, the latest 52-week data reflects off-trade volume and value share growth compared with pre COVID-19, FY2020 levels(x). In addition, this is mirrored in the on-trade where in the latest 52-week data, reflects volume and value share gains compared with FY2020(xiii). Between the on and off-trades, Bulmers remains the largest and most popular cider brand in Ireland.

Distribution and Wine

Distribution volumes have increased 8.3% in the year with the reopening of the on-trade. Our Wine business volumes were 107% of FY2020, driven by a strong off-trade performance and resilient on-trade performance following the reopening of the trade in June 2021 in ROI.

The Group has a strategic partnership with Budweiser Brewing Group, notably in the Republic of Ireland where we exclusively distribute their complete beer portfolio. Budweiser, the biggest brand we distribute through this agreement has been repositioned in terms of pack sizes in preparation for MUP. The latest 13-week market data indicates that Budweiser’s share of volume and value in off-trade lager has moved into growth year on year(x). In February 2022, Bud Light was launched in the Republic of Ireland further strengthening the portfolio and tailoring to changes in consumer preferences. In addition, Corona has seen 52-week volume and value market growth in the off-trade lager(x) with its brand health scores also impressing, up +16.6% compared with last year(xix). We continued our beer portfolio development with the controlled launch of Corona Draught in December 2021.

Ecommerce

Following the launch of Bulmers Direct in H2 FY2021 and its sister platform for Tennent’s NI, we are pleased to report that 33% on-trade revenue in Ireland was captured online in FY2022. In addition, we have seen higher online order values compared with traditional contact centre orders across both platforms. We will continue to enhance the customer experience online and drive customers to the platform.