Annual Report 2022
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C&C Group plc is a leading,
vertically integrated
premium drinks company
which manufactures,
markets and distributes
branded beer, cider, wine,
spirits, and soft drinks
across the UK and Ireland.
C&C Group’s portfolio of owned/exclusive brands
include: Bulmers, the leading Irish cider brand;
Tennent’s, the leading Scottish beer brand; Magners,
the premium international cider brand; exclusive
distribution of the Budweiser Brewing Group portfolio
in Ireland including Budweiser, the fifth largest long
alcoholic drink (‘LAD’) brand; as well as a range of fast-
growing, premium and craft ciders and beers, such as
Heverlee, Menabrea, Five Lamps and Orchard Pig.
C&C exports its Magners and Tennent’s brands to over
40 countries worldwide.
C&C has owned brand and contract manufacturing/
packing operations in Co. Tipperary, Ireland; and
Glasgow, Scotland.
C&C is the No.1 drinks distributor to the UK and Ireland
hospitality sectors. Operating through the Matthew
Clark, Bibendum, Tennent’s and Bulmers Ireland
brands, the Group has a market leading range, scale
and reach including an intimate understanding of the
markets it serves. Together this provides a key route-to-
market for major international beverage companies.
C&C Group plc is headquartered in Dublin and is listed
on the London Stock Exchange.
“Our FY2022 performance highlights the strength
of our business model, with the Group returning
to profit and cash generation. Encouraged by the
reaction and resilience of the hospitality sector,
we are pleased with how trading has recovered
and the subsequent speed of customer and
consumer demand, which we believe reflects the
enduring importance of the on-trade and the role
that it plays in our society.
The Group has responded well to servicing
this demand, despite the widely publicised
UK supply chain constraints impacting our
industry. In addition, we have broadly managed
the challenging and evolving inflationary cost
pressures through FY2022. However, we remain
vigilant of this challenging environment and
are mindful of the pressures being faced by
consumers.
In FY2022 we continued to execute our strategy:
increasing investment into our branded portfolio;
launching a significant change programme as
we streamlined the GB businesses (Tennent’s,
Matthew Clark, Bibendum and C&C Brands)
under one management team; and executing our
sustainability agenda. With our markets leading
platform and financial strength, we believe C&C
is well placed to consolidate its position as the
leading drinks distributor serving the UK and
Ireland drinks market.”
David Forde
Group Chief Executive Officer
Contents
Business & Strategy
2 Chair’s Statement
6 Vision, Purpose and Values
7 Divisional Structure
8 Our Engagement with Stakeholders
10 Group Chief Executive Officer’s Review
24 Strategic Report - Group Strategy
26 Strategic Report - Business Model
30 Strategic Report - How we create sustainable value
32 Strategic Report - Key Performance Indicators
34 Strategic Report - Management of Risks and Uncertainties
46 TCFD Disclosure
54 Group Chief Financial Officer’s Review
62 Responsibility Report
Governance
82 Directors’ Report
88 Directors and Officers
90 Corporate Governance Report
100 Audit Committee Report
106 Environmental, Social and Governance Committee Report
108 Nomination Committee Report
116 Directors’ Remuneration Committee Report
136 Statement of Directors’ Responsibilities
Financial Statements
137 Independent Auditor’s Report
147 Consolidated Income Statement
148 Consolidated Statement of Comprehensive Income
149 Consolidated Balance Sheet
150 Consolidated Cash Flow Statement
151 Consolidated Statement of Changes in Equity
152 Company Balance Sheet
153 Company Statement of Changes In Equity
154 Statement of Accounting Policies
171 Notes Forming Part of the Financial Statements
240 Financial Definitions
242 Shareholder and Other Information
Financial Highlights
Results
Net Revenue
€1,438.1m
Increase of 87.8% on a constant currency basis
Operating Profit before Exceptional Items
€47.9m
Operating Profit after Exceptional Items
€58.5m
Balance Sheet
Liquidity
€438.7m
Net Debt/EBITDA Including Leases
3.4x
Net Debt/EBITDA Excluding Leases
3.4x
Cash
Free cashflow conversion
35.6%
Corporate
Governance
Business
& Strategy
Financial
Statements
1
“ We are pleased with
the robust trading
performance of our
business during
FY2022”
Stewart Gilliland
Chair
Chair’s Statement
Aside from COVID-19 related trading
restrictions, the business has broadly
navigated the wider supply chain constraints
in the UK and taken action to afford itself a
degree of protection against the increasingly
challenging inflationary environment. Despite
these challenges, through FY2022 we
executed our strategy and implemented
a significant change programme, focused
on providing a technologically enhanced
platform to sell our brands and partner
brands, underpinned by our market leading
cost to serve. Notably, as part of this we
announced One C&C GB, an initiative
to integrate our Tennent’s, Matthew
Clark and Bibendum businesses under
one management team which will drive
efficiencies and improve our service offering
to customers. Our core brands in Scotland
and Ireland have continued to perform
strongly, with both Tennent’s and Bulmers
gaining off-trade volume share compared
with the pre COVID-19 levels
(iii)(iv)
. With the
Group’s strategy focused on three distinct
pillars: brand strength; system strength;
and sustainability, during FY2022 we made
significant investment behind these pillars
to consolidate our position as the leading
brand-led drinks distributor serving the UK
and Irish hospitality sectors.
Operating Results
FY2022 was a year of gradual recovery
for C&C and we are pleased to report
net revenues of €1,438.1m and growth of
+87.8% compared to FY2021 on a constant
currency basis
(i)
. This performance was
driven by the reopening of the higher margin
on-trade which helped the Group return to
operating profit generation in June 2021,
coinciding with the easing of government
restrictions in our core markets. FY2022
provided 267 days of trading where the on-
trade was open across Ireland and the UK
compared with 117 days in FY2021.
In my final annual report as Chair of C&C Group, I am pleased to
welcome the reopening of the hospitality sector during FY2022 and
delighted to be back serving customers and ensuring our strong
portfolio of owned and agency brands are available for consumers
to enjoy as trading resumes. The last two years has impacted the
lives of all our stakeholders and proved an exceptionally difficult
time for the hospitality sector and wider supply chains. Despite
this challenging backdrop, we are pleased with the robust trading
performance of our business during FY2022, the speed in which
consumer demand has returned, the acceleration of some pre
COVID-19 trends such as premiumisation, and the growing
importance of sustainability to all our stakeholders; a key pillar of the
Group’s long-term strategy.
2 C&C Group plc Annual Report 2022
With the increase in on-trade revenues and
our successful cost reduction programme,
the Group delivered a pre-exceptional
operating profit of €47.9 m in FY2022,
compared with a loss of €63.6 m in FY2021
on a constant currency basis
(i)
. This, in turn,
has delivered an adjusted diluted earnings
per share of 7.5c in FY2022 ((21.1)c in
FY2021)
(ii)
.
The provenance and unique position of
our core brands in the markets they serve
ensures a strong platform from which
to develop our wider portfolio and we
are pleased with the performance and
progression of our premium portfolio. We
also continued to broaden our portfolio
of agency brands, notably securing an
exclusive sale and distribution agreement
with Moët Hennessy in Scotland. Key to
the success in securing this distribution
agreement was our system strength which
we have continued to enhance during
FY2022, through the optimisation of our
depot network, continued advances in our
ecommerce platform and optimisation of
our back-office. In addition, we are pleased
to report both our Wellpark and Clonmel
manufacturing sites have now removed
single use plastic from their consumer
packaging, which will remove 300 tonnes of
the plastic annually.
The inherent strength of our business
model and cash generating characteristics
were evident in FY2022, with the Group
returning to cash generation. Through
prudent balance sheet management and
our successful Rights Issue in June 2021,
the Group looks to the future from a position
of financial strength and is equipped with
sufficient liquidity to execute our long-term
strategy and navigate any future unexpected
trading disruption.
People and Culture
We are a business with a manufacturing
footprint and depot network close to the
customers and consumers we serve. We
have world class facilities and a network
that is unrivalled in terms of reach and scale
across the UK and Ireland. Integral to our
success in optimising this advantage is
identifying opportunities and responding
quickly to serve the needs of our customers.
Our people, and the culture we foster
collectively, are at the core of our success.
I would like to thank all of my colleagues
throughout the business for their dedication
and resourcefulness in navigating the
challenging market backdrop through
FY2022.
The health and safety of our colleagues is
our key priority, one which we will continue
to invest in to ensure we provide the safest
and most enjoyable working environment
we can for all those working in C&C. We
recognise that as society has reopened and
returned to pre COVID-19 characteristics,
changes in how we work have had an
impact on our colleagues, their wellbeing,
and the environment, and consequently,
the support we provide. To address this,
the Group has a implemented a permanent
flexible working policy for those employees
who do not need to be site-based. To
enhance our working environment, for
example we created a Wellness Garden
at our Clonmel site which opened in April
2022. The area allows colleagues to take
some time out or have a meeting outdoors,
providing an environment to relax, refresh
and connect. The Group has a number of
measures to ensure we are supporting our
colleagues which include the provision of
impartial advice and information on physical
and mental wellbeing, financial concerns
and access to specific counselling services.
Mindful of the physical and mental health
of our colleagues, in FY2022 we trialled
an employee health screening and lifestyle
Our people, and the
culture we foster
collectively, are at the
core of our success.
Corporate
Governance
Business
& Strategy
Financial
Statements
3
assessment, with over 170 colleagues taking
part in Ireland. As result of the positive
feedback received, we plan to roll out the
equivalent Health and Wellbeing education
and support programmes across the Group.
Over the last two years, open and honest
discussions on mental health and wellbeing
have become ever more important to
ensuring that colleagues feel fully supported
in the workplace. As part of our external
Employee Assistance Programmes that are
in place across C&C Group, we have 56
fully certified volunteer Mental Health First
Aiders, available to support any colleague
at any time until appropriate professional
support is received or until the crisis is
resolved.
As part of our commitment to the
responsible promotion and consumption
of alcohol and ongoing efforts to support
colleague health and wellbeing and ensure
a safe working environment, we have
partnered with leading alcohol charity,
Drinkaware, to roll out e-learning resources
to all colleagues across C&C Group to
improve alcohol awareness.
The Board recognises the need to
regularly assess employee engagement
to develop our people, culture and internal
communications. The Group undertakes
six monthly employee engagement surveys
which are reviewed by managers and by the
Board to address any concerns and target
investment into our people and culture.
In addition, our Board met directly with
employees during FY2022 through ‘Our
Forum’ sessions which provide a platform
for open and honest dialogue between the
Board and our colleagues. This continuous
review ensures C&C provides the best
environment and support for our colleagues
to thrive, which will ensure the long-term
success of the Group.
Social Responsibility and
Environmental Commitments
We recognise the important role that
our industry plays in wider society but
acknowledge and understand the key
role we play in social responsibility within
the local communities we serve. We take
our responsibility seriously. In terms of
strategic oversight, the Board has an ESG
(Environment, Social and Governance)
Committee that works alongside our
ESG team to develop and execute our
ESG strategy. Our ESG team includes
representation from colleagues at all levels
across the business to ensure varied and
diverse inputs and a balanced strategy. This
year’s Responsibility Report is set out on
pages 62 to 81.
At C&C, we are a long-term supporter
of minimum unit pricing (‘MUP’), and our
experience since its 2018 introduction
in Scotland highlights our belief to act
responsibly in society’s long-term interests.
We welcomed the introduction of MUP in
Ireland on January 2022 and support any
measures that will reduce problem drinking
and associated pressures on public health
systems. As part of our commitment to the
responsible consumption of alcohol we
produce a range of no and low variants of
our leading brands which we continue to
develop and are active members of both the
Portman Group and Drinkaware.
In progressing our environmental
commitments, key achievements in the year
include the installation of the largest rooftop
solar panel farm in Ireland, which will provide
10% of electricity used onsite and removal
of single use plastics in our consumer
packaging at Clonmel. In addition, with
COP26 hosted in Glasgow, the home of our
iconic Tennent’s brand, C&C was actively
involved in the event showcasing the
significant sustainability investment in our
Wellpark manufacturing site.
We recognise the
important role that
our industry plays
in wider society
but acknowledge
and understand the
key role we play in
social responsibility
within the local
communities we
serve.
Chair’s Statement
(continued)
4 C&C Group plc Annual Report 2022
Capital Allocation
Capital investment during FY2022 has
been focused on our brands, system
and sustainability, with investment in our
branded portfolio through a multi-channel
advertising campaign; integration of One
C&C GB; and the removal of single use
plastic from our canned products at our
Clonmel manufacturing site.
We finished FY2022 in a strong position,
returning to cash generation and our
leverage back within traditional covenants in
February 2022, the first time in FY2022. Our
ambition is for a medium-term target of less
than two times net debt to adjusted EBITDA.
With the resumption of the on-trade and our
subsequent trading performance, we will
continue to deleverage our balance sheet
over FY2023, so long as current trading
conditions continue. Future capital allocation
will be focused on organic or acquisitive
growth opportunities to enhance our brands
and system, while ensuring we meet our
sustainability commitments.
The Group is operating within a period
of covenant waivers and as such our
ability to return capital to Shareholders is
restricted until the end of those waivers in
H2 FY2023. We recognise the importance
of dividends to our Shareholders and will
resume returning capital to Shareholders as,
and when, the financial performance and
operating environment permit us to do so.
Governance
FY2022 saw further evolution of the Board,
with Vineet Bhalla joining as Independent
Non-Executive Director on 26 April 2021,
strengthening our range of skills and
experience. Jim Clerkin, Independent Non-
Executive Director and Andrea Pozzi Chief
Operating Officer (‘COO’) decided to step
down from their positions on 27 October
2021 and 1 September 2021 respectively,
with their associated Board responsibilities
being fulfilled by the remaining Executive
and Non-Executive Directors. I am pleased
to report that Andrea has taken up the
role of leading the management team of
our enlarged GB business following the
integration of our Tennent’s, Matthew
Clark and Bibendum businesses. Lastly,
Ralph Findlay joined as Chair designate
in March 2022 and will take up the role
of Chair following our AGM in July 2022.
Ralph brings extensive industry experience,
having until recently been Chief Executive
of Marstons plc, one of the UK’s most well-
known pub groups.
With the easing of restrictions, we are
pleased to be meeting face to face again
as a Board. As part of our on-going
engagement, the Board conducted a
number of operating site visits over the
course of FY2022. We also completed an
internal Board review during the year which
reviewed areas such as: Board composition;
risk management; performance of our
committees; and engagement.
We believe we have a Board with the
requisite skills, experience and diversity to
support the management of the business
as it executes its strategy and remain
committed to maintaining the highest
standards of governance principles and
practice, an overview of which is included
on pages 90 to 99.
Looking Forward
I am encouraged by the speed and
strength in which the on-trade has returned
in FY2022. I believe this underlines the
important role our industry plays in society
and the unique position C&C has as
the leading brand-led drinks distributor
across the UK and Ireland. We have a
proven business model, with our return to
profitability aligned with the opening of the
on-trade and a return to cash generation.
We look forward with optimism, however
remain vigilant on the challenging and
evolving inflationary environment and will
continue to manage this backdrop by
taking steps where possible to minimise
the impact on our customers, consumers
and shareholders. With the actions taken in
FY2022 to strengthen our brands, system,
and sustainability credentials, C&C is
well positioned to execute our long-term
strategy.
As I conclude my term as Chair of C&C, I
would like to thank all my current and former
colleagues who have made my experience
as motivating and rewarding as it has been.
During my 10 years in the business, the
last two years have been some of the most
challenging our industry has ever faced, the
response of our people and the resilience
of our business has been inspiring and I
believe the Group is well positioned for the
future.
Stewart Gilliland
Chair
Notes
(i) FY2021 comparative adjusted for constant currency
(FY2021 translated at FY2022 F/X rates).
(ii) Adjusted basic/diluted (loss)/earnings per share
(‘EPS’) excludes exceptional items. During the current
financial year, the Group completed a Rights Issue
at a discounted price of £1.86. As the rights price
was issued at a discount, this was equivalent to a
bonus issue of shares combined with a full market
price. As such, IAS 33 Earnings Per Share requires
an adjustment to the number of shares outstanding
before the Rights Issue to reflect the bonus element
inherent in it and also for this to be included in the
EPS calculation for the prior period presented so
as to provide a comparable result. Adjusted basic/
diluted earnings/(loss) per share (‘EPS’) excludes
exceptional items.
(iii) Nielson, Volume Share of Long Alcoholic Drinks,
Off-trade including Dunnes and Discounters, MAT
February 2022.
(iv) GB IRI off-trade data 52 week ending 20.03.22.
Corporate
Governance
Business
& Strategy
Financial
Statements
5
Vision, Purpose and Values
We are committed to building a company
that delivers long-term value, an organisation
that has an affinity to the markets in which
it operates, with sustainability and social
responsibility at its forefront.
With our Bulmers, Tennent’s and Magners
brands, C&C has a long and rich history at
the core of the company, augmented by
continually evolving our offer to meet the
demand of our consumers and customers.
Vision
To be the pre-eminent brand-
led drinks distribution platform,
serving the UK and Irish drinks
market, generating stable
margins, delivering strong free
cash flow and returns for our
shareholders.
Purpose
Play a role in every drinking
occasion, delivering joy to our
customers and consumers with
remarkable brands and service.
Our Behaviours
We put
safety first
We keep it simple
and remain agile
We are customer
centric
We are fact based, data and
insight driven
We collaborate
through trust
We learn to
improve
CompetitiveRespectful
HumbleOpen
Our Culture
Our Values
Respect people
and the planet
We bring joy to life
Quality is at our core
6 C&C Group plc Annual Report 2022
Divisional Structure
Great Britain (GB)
This segment includes the financial results from sale of the Group’s own branded
products in Scotland, with Tennent’s, Caledonia Best, Heverlee and Magners the
main brands. This division includes the sale of the Group’s portfolio of owned
cider brands across the rest of GB, including Magners, Orchard Pig, K Cider and
Blackthorn which are distributed in partnership with Budweiser Brewing Group.
In addition, the division includes the Tennent’s drinks distribution business in
Scotland. The Group also distributes selected Budweiser Brewing Group brands
in Scotland and the Tsingtao and Menabrea international beer brands across the
UK. Our primary manufacturing plant and administration centre is located at the
Wellpark Brewery in Glasgow.
In addition, this segment includes the financial results from the Matthew Clark
and Bibendum distribution businesses. Matthew Clark is the largest independent
distributor to the UK on-trade drinks sector. Matthew Clark and Bibendum also
have a number of exclusive distribution agreements for third party products
(mainly wines but also including spirits) into the UK market and a limited range
of own brand wines. Bibendum is one of the largest wine, spirits and craft beer
distributors and wholesalers to the UK on-trade and off-trade, with a particular
focus on wine. Together, Matthew Clark and Bibendum offer a market leading
range of products, including beers, wines, spirits, cider and soft drinks.
Our Tennent’s, Matthew Clark and Bibendum distribution businesses operate a
nationwide distribution network serving the independent free trade and national
accounts.
This segment also includes the financial results from the sale and distribution of
the Group’s own branded products, principally Magners and Tennent’s outside
of the UK and Ireland. The Group exports to over 40 countries globally, notably
in continental Europe, North America, Asia and Australia. The Group operates
mainly through local distributors in these markets and regions. This segment
also includes the sale of the Group’s cider and beer products in the US and
Canada. In April 2021, the business divested our wholly-owned US subsidiary,
Vermont Hard Cider Company and its Woodchuck suite of brands.
Ireland
C&C’s Ireland division includes the sale of the Group’s own branded products
across the Island of Ireland, principally Bulmers, Magners, Tennent’s, Five
Lamps, Clonmel 1650, Heverlee, Dowd’s Lane, Roundstone Irish Ale, Finches
and Tipperary Water. The Group also operates the Bulmers Ireland drinks
distribution business, a leading distributor of third party drinks to the licensed
on and off-trade in Ireland. The Group distributes San Miguel, Tsingtao and
Budweiser Brewing Group’s portfolio of beer brands across the Island of Ireland
on an exclusive basis. Our primary manufacturing plant is located in Clonmel,
Co. Tipperary, with major distribution and administration centres in Dublin and
Culcavy, Northern Ireland.
Corporate
Governance
Business
& Strategy
Financial
Statements
7
Our Engagement with Stakeholders
We aim to maintain open and positive dialogue with all of our
stakeholders. Our stakeholders are a critical part of our operations
and are referenced throughout this report. We have set out below
details of who our key stakeholders are, and how we engage with
them. For our Section 172 Statement, please see page 93.
Area of Focus Why we engage How we engage
Employees
Our colleagues and contractors who work in our business
• Health, safety and wellbeing
• Investment in learning and
development
• Promotion of equality, diversity and
inclusion
• Recognition and careers
• C&C Strategy and values
Our people sit at the heart of our
business. Without them we wouldn’t
succeed. We want our people to
thrive in a fair and inclusive work
environment, to ensure that C&C
has the most engaged, inspired and
committed colleagues.
There are many ways we engage, including
employee engagement surveys, Employee
Resource Groups to promote Health and
Wellbeing, employee forums with Non-Executive
Directors, whistleblowing reports, online learning
and training resources, weekly and monthly Teams
and face to face briefings, regular site visits and
roadshows.
Communities
The people who live in the local communities around our sites and operations
• Fair employment and equal
opportunities
• Local causes and issues
To build trust by operating
responsibly and sustainably and
investing in people and addressing
issues that are material to our
communities.
We support local and national charities and
community groups to raise awareness and funds
to help deserving causes. In FY2023, we will
introduce a Group wide volunteering policy to
allow colleagues to deliver a meaningful impact to
the world around us.
Consumers
The people who drink our products
• Create joyful moments as consumers
enjoy one of our drinks with family,
friends and loved ones
• Staying ahead of changing consumer
lifestyles and habits which impact
how people want to drink
• Making sure that our beverage offer
is sustainable and good for the
planet
• Safe products and environments
We strive to build lasting bonds
with consumers built on quality,
relevance, authenticity and trust.
On occasions when consumers
choose alcohol, we want them to
“drink better, not more”.
Using award-winning consumer insights, we
develop powerful and unique brand positions
that engage consumers.
We invest in and nurture our brands, to develop
campaigns, experiences and associations that
consumers care about.
We utilise the appropriate channels to reach
our consumers.
Our brands are available and visible in the
correct venues and in the correct formats.
Responsible advertising and marketing,
active engagement and education to promote
moderation and reduce the harmful use of
alcohol.
8 C&C Group plc Annual Report 2022
Area of Focus Why we engage How we engage
Suppliers
Our partners who supply products and services
• Product quality and authenticity
• Workplace health and safety
• Ethical and sustainable supply chain
reducing our environmental impact
and making positive contributions to
society.
• Innovation in creation of new brands
Working collaboratively to ensure
resilience and availability in
our supply chain to deliver the
best possible service and value
for money for customers and
consumers.
Identify opportunities for profitable,
sustainable growth.
Collaborate to improve ethical and
sustainable approach.
Suppliers must sign up to our Code of Conduct
and Anti Modern Slavery policies as well as
provide detailed information on their Ethical and
Sustainable approach.
We have also committed that suppliers and
customers making up 67% of our Scope 3
emissions, will have science-based targets in
place by 2026. The Company will continuously
engage with suppliers and customers to support
them to set science-based targets for their own
emissions by 2026.
Conduct formal supplier surveys, reviews and
audits.
Investments in third party innovative and new
brands.
Shareholders and Lenders
Individuals or institutions that own shares in C&C Group plc or provide financing
• Financial performance
• Strategic priorities
• Corporate governance
• Leadership and succession planning
• Executive remuneration policy
• Shareholder returns
• Environmental and social
commitments and progress
Our philosophy is to engage in
regular, open and transparent
dialogue with our existing and
prospective shareholders and
lenders. Wevalue their thoughts
and opinions which are shared with
the Board. The Board reviews the
feedback and takes appropriate
actions where necessary.
We engage with our existing investors through
one-to-one and group meetings, webcasts,
presentations, conference calls and at our
AGM. The Group Finance and Investor Relations
Director holds responsibility for the investor
relations programme, and the Group CEO
and Group CFO dedicate significant time to
engaging with our major shareholders. The Chair,
other Board members and the Group General
Counsel and Company Secretary also engage
with our shareholders on other matters, such as
Environmental, Social and Governance topics.
We engage with lenders primarily through Group
Finance and the Group CFO.
Customers
Our customers, who are experts in the products they buy and sell, as well as in the
experience they create and deliver
• Identification of opportunities that
offer profitable sustainable growth
insights into consumer behaviour
and trends, innovation, promotional
support and merchandising and
technical expertise
Our passion is to ensure we nurture
mutually beneficial relationships
that deliver joint value and the best
outcome for all our consumers.
Collaborate to improve ethical and
sustainable performance.
We engage through the use of best practice sales
analytics and technology to support our retailers,
ongoing dialogue and account management
support and physical and virtual sales calls.
Our award-winning market insight capability,
identifies product range based on consumer
demand and market trends.
Governments and Regulators
Regional and national government bodies and agencies which implement and enforce
applicable laws across our industry
• Positive drinking programmes and
impacts
• Wider sustainability agenda including
human rights, environmental impacts
• Legal and regulatory compliance
To communicate our views to
those who have responsibility
for implementing policy, laws
and regulations relevant to our
businesses.
Ongoing dialogue, collaboration on responsible
drinking initiatives and promotion of moderation,
strengthening industry standards and participation
in governments’ business and industry advisory
groups.
9
Corporate
Governance
Business
& Strategy
Financial
Statements
Group Chief Executive Officer’s Review
The Group has navigated a challenging
trading environment throughout FY2022,
principally the widely publicised UK supply
chain constraints, and more recently,
inflationary cost pressures. We have
effectively managed these challenges over
the last twelve months whilst ensuring
consistent supply and market leading
service.
Despite these challenges, we have
continued to execute our strategy by:
strengthening our brands and system,
enhancing our portfolio; extending our
customer offering; investing in technology;
driving efficiencies in our network and
support office functions; and, ensuring
we continue to meet our sustainability
commitments.
Strategic development
C&C’s strategy is based on three distinct
pillars: brand strength; system strength; and
sustainability, the successful execution of
which will ensure our company is positioned
as the leading brand-led drinks distribution
platform in the UK and Ireland.
Our brands are key to the success of our
business and as such we have increased
investment in our branded portfolio, with
direct brand marketing increasing to 7.1%
of branded net revenue from pre COVID-19
levels of 5.8% in FY2020. Our brands were
back on TV for the first time in a number of
years, supported by promotional activity
and social media campaigns. This helped
improve our brand health scores
(viii),(ix)
in the
year. In January 2022, minimum unit pricing
(“MUP”) was introduced in the Republic
of Ireland. With our recent experience of
MUP in Scotland, we were able to prepare
in advance, optimising our Irish branded
portfolio through ABV and pack format
changes. Early indications show that
Bulmers has gained market share, since the
introduction of MUP
(x)
.
“Building back stronger
and positioning C&C
as the leading, brand-
led, drinks distribution
platform in the UK and
Ireland.”
David Forde
Chief Executive Officer
Following a period of unprecedented challenges for the hospitality
sector, we are delighted to be back serving our customers and
delivering our iconic and much-loved brands to our on-trade and
off-trade partners. Encouraged by the response and resilience of
the industry, we are pleased with how trading has recovered and the
subsequent strength of customer and consumer demand, which we
believe reflects the enduring importance of the on-trade and the role
it plays in our society.
The strength of our business model is evident, with C&C returning to
profit in June 2021 following the easing of government restrictions in
our core markets. Furthermore, we have finished FY2022 in a strong
position, with a reduced level of net debt and more than sufficient
liquidity to manage any near-term uncertainty and deliver our growth
objectives.
10 C&C Group plc Annual Report 2022
In July 2021, we announced our intention
to create one C&C in Great Britain, aligning
our TCB, Matthew Clark and Bibendum
businesses under one management team.
The initiative will unite and streamline our
GB businesses under one go-to-market
strategy; simplify and improve the customer
experience; create a more efficient GB
network with market leading scale, reach
and cost to serve; and an optimised support
office function. In addition, we have made
great progress in aligning our core ERP
system across the Group which will further
simplify our operations. Continuing our
investment in technology, we launched
Bibendum’s ecommerce platform in January
2022, ensuring that we now have an online
customer offering across the Group.
Financial Performance
C&C’s reported net revenue for FY2022 of
€1,438.1m which represents an increase
of 87.8% versus last year on a constant
currency basis
(i)
. With government
restrictions in the hospitality sector easing
from April 2021, recovery in the on-trade
drove the majority of the uplift, with on-
trade net revenues in FY2022 of €1,017.1m,
+207.8% versus last year on a constant
currency basis
(i)
.
Our operating profit before exceptional
items in the year was €47.9m and our overall
earnings before exceptionals, interest, tax,
depreciation and amortisation was €79.7m
(ii)
.
This excluded an exceptional operating profit
in the year of €10.6m of which was primarily
as a result of the releasing COVID-19
provisions no longer deemed necessary.
The FY2022 performance represents a
return to profitability for the Group, with the
business delivering a basic EPS of 9.9c
(iv)
and adjusted diluted EPS of 7.5c
(iv)
.
The Group successfully completed a
Rights Issue in June 2021, raising gross
proceeds of €176.3m. This coupled with
disciplined balance sheet management
and a return to cash generation has led
to net debt
(vii)
and liquidity
(vi)
of €271.3m
and €438.7m respectively as at year end,
compared with €441.9m and €314.6m
respectively at FY2021. The Group reduced
leverage to 3.4x net debt / adjusted EBITDA
as at February 2022, and is back within
traditional pre COVID-19 covenants. The
Group is on track to meet the next covenant
requirements, the waiver of which was
negotiated in response to COVID-19, and
which ends on 31 August 2022.
Finance costs, including exceptional items in
the year, amounted to €22.6m, a decrease
of 17.5% versus FY2021, with the proceeds
from the Rights Issue being used to reduce
gross debt and interest costs.
Our receivables purchase programme has
contributed €84.1m to closing cash, an
inflow of €37.8m on a constant currency
basis
(i)
, driven by the return of the on-trade
back to normalised trading conditions. Total
working capital during FY2022 was limited
to an outflow of €19.2m; with investment into
stock, this was supported by €28.8m of tax
deferrals, following repayment of €64.3m
during FY2022.
Post year end, the Group announced the
sale of its joint venture investment in Admiral
Taverns to Proprium Capital Partners for a
total consideration of £55m. As part of the
divestment, C&C has negotiated a long-
term branded supply agreement into the
Admiral estate. The divestment of Admiral
is an indication of C&C’s future focus on its
brand-led distribution model.
Capital Allocation
The Group’s capital allocation strategy
remains anchored in the sustainable
stewardship and growth of our business.
The core components in executing our
strategy include investment in our existing
business; acquisitive growth opportunities
that develop our brand or system strength; a
target leverage of at or below 2.0x net debt
/ adjusted EBITDA; and a commitment to
return surplus cash to shareholders.
Capital investment in the existing business
stood at €17.1m for the year and was
focused on sustainability initiatives and
technology. Notably, at our Clonmel facility
we invested €4.8m to remove single use
plastic from our canned products, which will
eliminate 150 tonnes of plastic per annum
from our products.
We continued our support of the
Independent Free Trade (‘IFT’) in both
Scotland and Northern Ireland by lending
to outlets seeking growth capital for their
business plans. These loans stood at
€43.0m in FY2022, up from €42.1m in
FY2021. Loans are primarily secured by
freehold assets and are conditional upon
the outlet purchasing our products over the
tenure of the agreement.
C&C is committed to a clear and disciplined
approach to capital allocation. We
understand the importance of dividends
to our shareholders, therefore once Group
cash flow permits, and we have exited our
covenant waiver period, we will return to
paying a dividend in due course.
Brand Strength
With the easing of government restrictions in
the on-trade, this channel in FY2022, began
to recover back to pre-COVID levels, with
71% of FY2022 net revenue generated in
the on-trade compared with approximately
80% pre COVID-19. Distribution of our core
brands into direct-delivered on-trade outlets
has returned to approximately 90.0% of
FY2020.
We have seen a strong performance by
Tennent’s and Bulmers in FY2022, with
both brands driving improved brand health
scores
(xiv),(xv)
. Off-trade share has continued
to perform strongly, with market share
growth compared with pre COVID-19
(x),(xi)
levels. Similarly, in the on-trade, Tennent’s
and Bulmers volume share has increased
compared to two years ago
(ix),(x)
with these
brands delivering to 88% and 92% of the
outlets compared to FY2020. The Magners
performance has been more challenging,
Corporate
Governance
Business
& Strategy
Financial
Statements
11
with losses in value and volume share in
both the on and off trade
(x),(xi)
. Cider’s share
of overall alcohol declined in FY2022, which
impacted on performance
(xx)
. Magners
Original however, remains the number
one packaged apple cider by volume and
value sales in GB
(xv)
. We are excited by our
investment plans for the brand and our wider
cider portfolio. Encouragingly, Matthew Clark
and Bibendum have grown outlet penetration
of our branded cider portfolio in outlets
purchasing cider to nearly 50%, a growth of
c.3% on FY2020.
Our premium beer portfolio, 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. Despite the
periods of on-trade closures, coupled with
hospitality restrictions, GB 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.
System Strength
During FY2022 we successfully implemented
our efficiency and cost saving programme,
delivering €18m of annualised savings
compared to our pre COVID-19 cost base.
The majority of savings were driven by the
consolidation of the distribution network
across GB, improving customer service
whilst providing a broader offer. While
completing our network consolidation, the
business has navigated the UK supply chain
constraints and broadly met the needs of
customers through peak trading periods. Our
nationwide network is owned and managed
in-house which afforded the Group some
protection from supply constraints being
experienced by other businesses, further
reflecting the strength of our underlying
business model. In addition, we have
rationalised our third-party brand stocking
range and implemented minimum order
values across the Group to further drive
efficiencies.
The Group has continued to grow
ecommerce revenues in FY2022 and now
provides an online ordering platform for
customers across the Group. I am pleased
to report that we continue to see enhanced
order sizes through our ecommerce
platform compared with traditional contact
centre orders. In addition to an enhanced
customer offering, our ecommerce platform
delivers support office efficiencies. To
further promote the use of online ordering,
we moved all promotional activity to online
and partly as a result, 60.2% of Matthew
Clark IFT customers now order online.
The Group navigated the CO
2
shortages
which affected the industry during FY2022.
Following previous investment at our
Wellpark and Clonmel manufacturing
facilities with CO
2
recovery systems, the
Group was able to ensure continuity of
service and meet customer and consumer
demand for our brands.
Our Team
Central to the success of our business is a
team of dedicated colleagues, passionate
about our brands and delivering outstanding
service to our customers. The closure
of the hospitality sector meant many of
our colleagues faced periods of furlough
throughout the pandemic. Despite this,
our colleagues demonstrated tremendous
flexibility and commitment as the industry
re-opened post lockdown. Our team was
further challenged by the well documented
labour shortages in the supply chain
and again responded with remarkable
adaptability and resourcefulness to deliver
great service to our customers.
In positioning and strengthening C&C for
the future, we simplified and centralised a
number of business functions throughout
the Group, which regrettably meant that
some colleagues left our business as their
Group Chief Executive Officer’s Review
(continued)
During FY2022
we successfully
implemented our
efficiency and cost
saving programme,
delivering €18m of
annualised savings
compared to our pre
COVID-19 cost base.
12 C&C Group plc Annual Report 2022
roles became redundant. I would like to
sincerely thank all our colleagues, past
and present, for their commitment to our
business, and their resilience throughout
what has been two of the toughest years
our industry, and our business, has
experienced.
Sustainability
C&C has continued to invest significantly
in sustainability, with over half of capital
investment in FY2022 linked to sustainability
projects. Notable FY2022 achievements
on our sustainability initiatives include:
the removal of single-use plastics in our
canned products manufactured in Clonmel;
the installation of Ireland’s largest rooftop
solar farm at Clonmel powering 10% of our
site electricity needs; and Wellpark being
voted the Sustainable Brewery of the Year
at the Scottish Beer Awards. As C&C is
a distributor as well as manufacturer, we
purchase significant volumes of product
for resale. We therefore expect the highest
sustainability standards from our suppliers
and ensure this through ethical procurement
practices and a rigorous supplier selection
process.
We acknowledge the positive role our
industry plays in society and our position
within it as a producer and distributor of
alcoholic beverages. We are passionate
about ensuring the safe and responsible
consumption of alcohol. In that context,
we use our marketing assets to promote
responsible consumption and are active
members of both the Portman Group and
Drinkaware.
The Group recognises the essential role
of sustainability in the decision making for
all our stakeholders. The commitment and
delivery of our sustainability objectives are
central to our long-term strategy and role
we play in wider society. Sustainability is
therefore at the core of our decision making
throughout the Group, with sustainability
metrics also now forming part of our
executive renumeration, to ensure alignment
between executive incentives, responsible
business and stakeholder expectations.
Our sustainability commitments and
achievements are disclosed in more detail
on pages 62-81.
Summary and Outlook
I am encouraged by our performance in
FY2022 as the Group returned to profitability
and cash generation, demonstrating the
inherent strength of our business model, the
resilience of our brands and the ability of our
team. As the on-trade has returned, I am
proud of how the Group has responded to
increasing levels of demand from customers
and consumers. We have successfully
navigated a challenging backdrop
throughout FY2022, while continuing to
deliver market-leading service. This has
only been made possible by the dedication,
commitment and agility of my colleagues at
every level throughout the business.
Looking forward, we are operating in a
challenging inflationary cost environment
and will continue to monitor this closely over
FY2023 and beyond. We have already taken
actions to afford the business a degree
of protection, through our successfully
executed cost reduction plan, our recent
price increases and input cost hedging.
Despite the current positive sentiment in
the hospitality sector post reopening, we
are mindful of the pressures being faced by
consumers and its potential impact on future
demand.
FY2022 finished with a robust return of
the on-trade, and we are excited for the
opportunities ahead. We have and will
continue to enhance our branded portfolio
through increased investment and product
development, utilising our system to win
in cider and strengthen our position in
premium beer. Through technology, we will
create a more streamlined business which
will in turn deliver an improved customer
experience and service. I am confident
that the Group will continue to play a key
role in the UK and Irish drinks market and
is well positioned to drive sustainable
growth and create long-term returns for our
shareholders.
David Forde
Chief Executive Officer
Corporate
Governance
Business
& Strategy
Financial
Statements
13
Group Chief Executive Officer’s Review
Our brand-led distribution model and its inherent
strengths of scale and reach is supported
by investment in our sales and distribution
infrastructure, underpinned by our local and core
brands. The Group operates with two distinct
divisions which are focused on the local markets
they serve, with their proposition tailored to meet
the needs of our customers and consumers. This
structure harnesses the economies of scale in our
support office, namely: procurement, finance and IT
while remaining agile to adapt and react to market
conditions and customer requirements.
Operating Review
14 C&C Group plc Annual Report 2022
Great Britain
€m Great Britain
Constant currency
(i)
FY2022 FY2021 Change %
Net revenue 1,213.8 598.4 102.8%
of which Branded 170.1 139.0 22.4%
- Price / mix impact 10.0%
- Volume impact 12.4%
of which Distribution 1,005.5 414.2 142.8%
- Price / mix impact 83.7%
- Volume impact 59.1%
of which Co-pack / Other 38.2 45.2 (15.5%)
Operating profit/(loss)
(iii)
31.2 (56.9) NM
Operating margin 2.6% NM
of which Branded 21.7 (10.4) NM
of which Distribution 9.5 (46.5) NM
Volume – (kHL) 4,305 3,167 35.9%
- of which Tennent’s 897 712 26.0%
- of which Magners 606 557 8.8%
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 CO
2
(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.
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.
Corporate
Governance
Business
& Strategy
Financial
Statements
15
Operating Review (continued)
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.
Group Chief Executive Officer’s Review
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.
16 C&C Group plc Annual Report 2022
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
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.
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.
Corporate
Governance
Business
& Strategy
Financial
Statements
17
Operating Review (continued)
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
Group Chief Executive Officer’s Review
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,
Together, during this
period, TCB, Matthew
Clark and Bibendum
consistently delivered
one in five equivalent
drinks consumed in
the GB on-trade.
18 C&C Group plc Annual Report 2022
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.
We launched an
ecommerce platform
for Bibendum,
resulting in all of our
operating businesses
in GB providing
customers this
offering.
Corporate
Governance
Business
& Strategy
Financial
Statements
19
Operating Review (continued)
Ireland
€m Ireland
Constant currency
(i)
FY2022 FY2021 Change %
Net revenue 224.3 167.4 34.0%
of which Branded 78.3 48.9 6 0.1%
- Price / mix impact 48.3%
- Volume impact 11.8%
of which Distribution 139.8 115 .0 21.6%
- Price / mix impact 13.3%
- Volume impact 8.3%
of which Co-pack / other 6.2 3.5 77.1%
Operating profit/(loss)
(iii)
16.7 (6.7) NM
Operating margin 7.4% NM
of which Branded 13.6 (4.1) NM
of which Distribution 3.1 (2.6) NM
Volume – (kHL) 1,384 1,257 10.1%
- of which Bulmers 330 300 10.0%
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.
Group Chief Executive Officer’s Review
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.
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.
20 C&C Group plc Annual Report 2022
The latest brand
health scores have
seen Bulmers
Original Brand Index
improve +2.8%
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.
Corporate
Governance
Business
& Strategy
Financial
Statements
21
Operating Review (continued)
Group Chief Executive Officer’s Review
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.
Notes
(i) FY2021 comparative adjusted for constant currency
(FY2021 translated at FY2022 F/X rates).
(ii) Adjusted EBITDA is earnings/(loss) before
exceptional items, finance income, finance
expense, tax, depreciation, amortisation and share
of equity accounted investments’ profit/(loss) after
tax. A reconciliation of the Group’s operating profit/
(loss) to adjusted EBITDA is set out on page 58.
(iii) Before exceptional items.
(iv) During the current financial year, the Group
completed a Rights Issue at a discounted price of
£1.86. As the rights price was issued at a discount,
this was equivalent to a bonus issue of shares
combined with a full market price. As such, IAS 33
Earnings Per Share requires an adjustment to the
number of shares outstanding before the Rights
Issue to reflect the bonus element inherent in it and
also for this to be included in the EPS calculation
for the prior period presented so as to provide a
comparable result. Adjusted basic/diluted earnings/
(loss) per share (‘EPS’) excludes exceptional items.
(v) Free Cash Flow (‘FCF’) that comprises cash
flow from operating activities net of tangible
and intangible cash outflows which form part of
investing activities. FCF highlights the underlying
cash generating performance of the ongoing
business. FCF benefits from the Group’s purchase
receivables programme which contributed €84.1m
(FY2021: €45.0m reported/€46.3m on a constant
currency basis) inflow in the year.
(vi) Liquidity is defined as cash plus undrawn amounts
under the Group’s revolving credit facility.
(vii) Net debt comprises borrowings (net of issue costs)
less cash. Net debt, including the impact of IFRS
16, comprises borrowings (net of issue costs), lease
liabilities capitalised less cash.
(viii) Tennent’s: Source: YouGov Brand Index, 1 October
2019 - 28 Feb 2022, Scottish Likely Beer Drinkers.
(ix) Bulmers You Gov 52 week period to 28.02.22.
(x) Nielson, Volume Share of Long Alcoholic Drinks,
Off-trade including Dunnes and Discounters, MAT
February 2022.
(xi) GB IRI off-trade data 52 week ending 20.03.22.
(xii) CGA OPMS Data to P02 2022 (26/02/2022).
(xiii) Bulmers: CGA Ireland 52 weeks ending 28.02.22.
(xiv) YouGov Profiles+ Great Britain 02.01.2022,
C&C Group, 01/03/19 - 29/02/20 vs 01/04/21 -
31/12/2021.
(xv) YouGov Profiles+ Great Britain 02.01.2022.
(xvi) Heverlee: Scotland YouGov Report, Data as of
01.03.22.
(xvii) Combined; NielsenIQ Cider MAT Vol HL share of
LAD, February 2020 & CGA Cider MAT Vol HL
share of LAD, February 2020.
(xviii) Combined; NielsenIQ Cider MAT Vol HL share of
LAD, January 2022 & CGA Cider MAT Vol HL share
of LAD, January 2022.
(xix) Corona YouGov 52 week period to 28.02.22.
(xx) IRI data 52 week ending 20.03.22.
22 C&C Group plc Annual Report 2022
23
Corporate
Governance
Business
& Strategy
Financial
Statements
Our ambition is to be the pre-eminent integrated brands and drinks
distribution business serving the UK and Ireland drinks markets
• Provide a range of local and core brands, premium, craft and third-party brands that is unrivalled.
• Our distribution infrastructure provides market leading national scale, reach and efficiencies.
• These brands and asset base are underpinned by our offer: dedicated and passionate people;
enhanced customer service; market insight and value.
• The Group has sustainability at its core – with the target of delivering to a better world.
Strategic Report - Group Strategy
Strategic
Pillars
Invest and grow
our portfolio of
leading local,
premium and
craft beer and
cider brands.
Strengthen
our position as
the No.1 drinks
distribution
platform in the
UK and Ireland.
Capital
allocation to
enhance growth
and shareholder
returns.
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 premium and
craft brands
• Successful brand
development and launches to
meet changes in consumer
demand
• Build on “partnership for
equity" brand relationships
to provide route to market
access
• Continue the optimisation of
network and wider system
• Deliver unrivalled portfolio
strength, value and service
to the UK and Irish hospitality
sectors
• Commercialising the
unrivalled data and insight on
the hospitality sector
• Target leverage of less than
2.0x net debt / EBITDA
• Inorganic opportunities that
strengthen our brands and
system
• Invest in sustainability &
technology
• Return capital to
Shareholders
Measurement
• Cash generation and
conversion
• Revenue growth
• Enhanced margins
• Share growth and brand
health scores
• Margin expansion in our
distribution business
• Net Debt/EBITDA
• EPS growth
• ROCE
24 C&C Group plc Annual Report 2022
Achievements during FY2022
Link to Strategic Pillars
• Investment across our core branded portfolio with
multi-channel advertising campaigns and promotional
activity. We have seen our brand health scores for
Tennent’s and Bulmers improve year on year.
• Tennent’s and Bulmers volume share of the off-
trade lager and cider market, 24.0% and 50.5%
respectively continues to represent share growth
compared with the pre-pandemic levels.
• Premium beer portfolio has continued to progress
with IFT penetration in Scotland growing to 40% of
IFT outlet base from 35% pre-pandemic. In addition,
growing brand health scores for Heverlee alongside
volume and net revenue growth in the off-trade.
Invest and
grow our
portfolio of
leading local,
premium and
craft beer and
cider brands.
• Return to profitability from June 2021 aligned with
easing of government restrictions in our core markets
with on-trade net revenue building back to 75% of
FY2020.
• Successfully servicing demand following the speed
and strength of customer and consumer demand
as government restrictions eased. Leveraging our
size and scale, in addition to our inhouse secondary
logistics operation to deliver market leading service
despite the widely publicised supply chain constraints
in the UK.
• Launch of an ecommerce platform in our Bibendum
Wine distribution business in January 2022, ensuring
that all of the Group’s on-trade customers can now
order online.
• Effective management of inflationary cost pressures
with cost reduction programme, price increases and
hedging of input costs.
Strengthen
our position as
the No.1 drinks
distribution
business in
the UK and
Ireland.
• Strong liquidity position of (€438.7m) and Net
debt/EBITDA of 3.4x. Our strong underlying cash
generating characteristics have been reflected in an
encouraging performance with FCF conversion in
FY2022 of 35.6%.
• Delivery of €18m annualised cost savings against
pre-COVID cost base, protected against wage
inflation and other costs in FY2022.
• Focus on our core business with the divestment of
our minority interest in Admiral Taverns for gross
cash consideration of €65.8m (£55.0m). As part of
the divestment, C&C have negotiated a long-term
branded supply agreement into the Admiral estate
which includes our owned and agency brands.
Capital
allocation
to enhance
growth and
shareholder
returns.
• C&C’s sustainability efforts were acknowledged with
Tennent’s winning two prestigious awards during
2021. Sustainable Brewery of the Year at the Scottish
Beer Awards and a Good Practice Award at the
VIBES Scottish Environment Business Awards.
• Continued sustainability commitment with investment
at our Clonmel manufacturing site into the removal of
single use plastic in its canned products. In addition,
creation of Ireland’s biggest rooftop solar panel
farm which will generate 10% of the site’s electricity
requirements going forward.
Strategic priorities
Our core strategic
objective is to deliver
earnings growth.
Existing Businesses
• Create an environment that ensures
the health and safety of our colleagues.
Further, establish a business culture
that nurtures engaged, inspired and
committed colleagues, investing in key
capabilities for the future
• Grow and strengthen our portfolio:
growing cider share and building
momentum in our premium beer portfolio
as consumer preferences evolve
• Leverage our scale and reach to drive
operational efficiencies in our distribution
infrastructure, optimising our capacity and
ensure a market leading cost to serve
• Drive better customer service through
our C&C GB change programme with a
simplified and integrated approach which
will enhance customer experience and
ultimately drive efficiencies into our back
office
• Enhance our offer: commercialising
the data and insight that is available;
continuing to develop our ecommerce
offering; and building stronger
partnerships with ‘equity for growth’
investments or complimentary agencies
Capital Allocation
• Maintain the strong cash conversion
characteristics of the business
• Deleverage the balance sheet, targeting a
medium-term target of less than 2.0x Net
Debt/EBITDA
• Invest in our brands; review inorganic
opportunities and return excess capital to
shareholders
Environmental, Social and
Governance
• Execute a credible sustainability strategy
focussed on people and planet
25
Corporate
Governance
Business
& Strategy
Financial
Statements
Strategic Report - Business Model
Brand Strength
An attractive portfolio of Owned
and Agency brands leveraging
C&C’s existing strengths and
market opportunities.
System Strength
Strategy to position the Group as
the most efficient, technology &
sustainability driven drinks distribution
system in the UK & Ireland.
Sustainability
A structured and ambitious
programme of continuous
improvement ensuring C&C
delivers to a better world!
The execution of our Group strategy is underpinned by three core
pillars, together these create a market leading platform which
ensures C&C’s position as the preeminent brand-led distributor for
the UK and Ireland drinks market.
26 C&C Group plc Annual Report 2022
Brand Strength
Scotland’s
favourite beer
Tennent’s is Scotland’s
favourite beer. Tennent’s has
been brewed since 1885 at
our Wellpark manufacturing
site in Glasgow, where a
brewery has stood since the
16
th
century.
Belgian beer
Heverlee is a premium
Belgian Beer, which is
endorsed by the Abbey
of the order of Prémontré,
in the town of Heverlee in
Leuven.
Craft beer
A range of craft beer brands
which includes Innis & Gunn,
Scotland’s leading craft beer
brand in which C&C recently
made an ‘equity for growth’
investment in.
Ireland’s
No.1 cider
Bulmers is Ireland’s
No.1 cider, made at our
manufacturing site Clonmel,
Co.Tipperar y.
Dublin lager
The Five Lamps Dublin
Brewery was originally set
up in early 2012 beside
Dublin’s iconic Five Lamps.
Its first beer, Five Lamps
Dublin Lager, was launched
in September 2012.
Craft cider
Orchard Pig craft ciders are
full of Somerset character
and scrumptious tanins
found in West Country cider
apples.
No.3 cider
in the UK
Magners is the No.3 apple
cider in the UK and is
recognised and distributed
internationally.
Italian lager
Menabrea is from Northern
Italy and is matured gently
in the perfect temperature
of cave cellars for a taste of
superior clarity. This pale lager
is well balanced between
citrus, bitter tones and floral,
fruity undertones giving a
consistent and refined flavour.
Other Owned
& Agency
Local, niche and speciality
brands as well as world
premium brands such
as Stella Artois, Becks,
Budweiser and Corona.
Complemented by premium and craft brands
The premium market segment continues to grow
structurally as consumer demands evolve although this
space is fragmented with the number of brands. C&C
deploys a portfolio of premium and craft beers which meet
this demand and coupled with our local and core brands
Core Brands
Our three core brands: Bulmers, Magners and Tennent’s are
intrinsically linked to the communities and manufacturing
locations where they are produced and where their heritage
was born. In addition to their local appeal, they are also
desired internationally with critical acclaim.
provide a comprehensive range to meet customer
and consumer preferences. Further innovation will
strengthen these brands and will be complemented by
exclusive distribution agreements and ‘equity for growth’
investments in leading craft brands.
These brands form part of the fabric of the respective drinks
markets they occupy, with there lasting appeal underpinned
by continued brand and marketing investment, alongside
new product development. Together they deliver strong
margins and are highly cash generative.
27
Corporate
Governance
Business
& Strategy
Financial
Statements
Strategic Report - Business Model
Route-to-market
C&C’s route-to-market platform occupies a fundamental role in the infrastructure of the UK
and Ireland hospitality sectors. The Group provides a route to market for international and
local brands alike.
System Strength
Customer
benefit
C&C provide access to
an unrivalled range of
products, offering expert
knowledge and insight.
Nationwide network with
market leading reach and
scale.
Resilience of C&C’s
inhouse operated
network.
C&C’s financial strength
provides security of
supply and access to
credit.
C&C
A drinks portfolio which is
market leading.
Ensures the Group
participates in evolving
consumer trends across
multiple drinks categories.
C&C’s distribution
platform enhances
market access and
visibility for its brands.
Supplier brands which
compliment our own
branded portfolio.
Supplier
benefit
C&C provide access to
an unrivalled range of
customers across all
areas of on and off-trade.
C&C has an intimate
understanding of the
markets they serve.
C&C’s access to
data ensures it has
unparalleled insight into
the hospitality sector.
C&C’s financial strength
and creditworthiness.
Southampton
Crayford
Bedford
Grantham
Wetherby
Cambuslang
Edinburgh
Glasgow and Wellpark
Dumfries
Inverness
Kintore
Runcorn
Birmingham
Owned, stocked
Owned, not stocked
Third party
Owned, third party
operated
Park
Royal
Bristol
Fosse
Launceston
Boldon
Cork
Clonmel
Borrisoleigh
Kilkenny
Galway
Dublin
Kells
Donegal
Culcavy
Scale and Reach
C&C has unrivalled size, scale and distribution reach
across attractive on-trade drinks markets in Ireland and
UK. We operate two well invested and state of the art
manufacturing sites. Our operational footprint can reach
over 99% of the UK population on a next day delivery
basis.
No.1
Drinks distributor
on Island of Ireland
No.1
Drinks distributor
in Scotland and GB
28 C&C Group plc Annual Report 2022
Sustainability
Delivering to a better world…
We recognise the important role that sustainability plays in the decision making of all our
stakeholders. C&C has proven track record of investing and delivering against sustainability
targets and a clear strategy anchored in three pillars.
ESG
Environmental
Reduce our
carbon footprint
Sustainably source
our products &
services
Social
Ensure alcohol
is consumed
responsibly
Enhance health,
wellbeing &
capability of
colleagues
Governance
Build a more
inclusive, diverse &
engaged C&C
Collaborate with
Government &
NGO’s
29
Corporate
Governance
Business
& Strategy
Financial
Statements
Strategic Report - How we create sustainable value
C&C Group plc is a leading drinks
manufacturer, marketer and distributor of
premium branded cider, beer, wine, spirits
and soft drinks across the UK and Ireland.
The Group also plays a fundamental role in
the infrastructure of the UK and Irish drinks
market as a key route-to-market partner
for local and international beverage brand
owners.
Manufacture
Embrace sustainable sourcing
We are committed to sourcing our
raw materials from local sustainable
sources. All apples crushed at the
Clonmel site for the production of
Bulmers and Magners cider are sourced
from the island of Ireland. As well as
having 165 acres of our own orchards in
Co. Tipperary, there are over 50 partner
growers on the island with whom we
work closely.
The Group recognises that sustainability
needs to be embraced by partners
at every stage of the supply chain to
achieve our sustainability objectives.
C&C has enhanced its approach to
ethical and sustainable procurement.
This sets out our policies and objectives
in relation to wider social and ethical
issues as well as environmental issues
including climate change. As part of our
sustainable procurement approach, we
are working with CDP and the Science
Based Targets Initiative to build an
understanding of the way our supply
chain manages their climate change
risks and their overall ethical approach.
Our purpose is to deliver joy
to customers with remarkable
brands and service.
Our vision is to be the first-
choice brands led distribution
partner for customers in
hospitality and retail in the UK
and Ireland.
Our values are:
Respect people and the planet
We bring joy to life
Quality is at our core
Optimising Production and Manufacturing
The Group has employed various practices to conserve the use of energy, reduce
carbon emissions, improve waste reduction and recycling and minimise the impact on
natural resources. From 1 April 2021, 100% of the electricity across our main sites in
the UK and Ireland comes from renewable sources, covering c98% of our electricity
use. In February 2022, Leo Varadkar, Tánaiste and Minister for Enterprise, Trade and
Employment in Ireland, visited Clonmel to mark the installation of the largest rooftop
solar panel farm in Ireland. This solar panel provides up to 10% of Clonmel’s electricity
requirements, while reducing the site’s carbon emissions by 4%, and saving c.290
tonnes of CO
2
per annum.
Improve sustainable packaging
During FY2022, the Group met its ambitious commitment to be out of single-use
plastics (shrink and hi and mid cone rings) in the packaging of our canned products,
reducing the environmental impact and ecological footprint of our products. All of our
canned product is now in fully recyclable cardboard, removing more than 200 million
plastic rings/per annum from the environment, as part of an overall plastic reduction of
several hundred tonnes. We are the only brewer who is a member of the UK Plastics
Pact, which has additional targets on plastic packaging, waste and recyclates. Across
C&C group, 29% of our own beer and cider is sold in returnable formats (returnable keg
and bottle).
ESG Pillars
see pages 62 - 63
1 2 4 5
The Group recognises that sustainability needs to be
embraced by partners at every stage of the supply chain
to promote the success of its sustainability strategy.
30 C&C Group plc Annual Report 2022
Market
Data
Our unrivalled scale and reach into the
on-trade markets of the UK and Ireland
ensures that we have superior access to
data and the best insight into macro and
regional trends.
Promoting responsible
consumption of alcohol
We are committed to the promotion
of responsible drinking and moderate
consumption of our products, to ensure
they are enjoyed safely by drinkers.
Distribution
C&C is the UK & Ireland’s largest independent On Trade drinks distributor. Our final mile
distribution strength, means we are well placed to serve our On Trade customers, with 29
nationwide depots and our owned fleet delivering in excess of 700,000 orders per year.
Piloting Alternative Fuel Vehicles
Electric vehicles (EVs) are being trialled
for deliveries in urban areas. An electric-
powered van has been utilised for small-
volume deliveries of Five Lamps craft beer
in Dublin and a trial of electric vans has
taken place at the Matthew Clark Park
Royal depot, together with a Hydrogenated
Vegetable Oil (HVO) diesel replacement
trial at our Bedford depot. ln Scotland, we
are investigating alternative fuel types for
vehicles, electric vehicles for Wellpark to
Cambuslang trips and hydrogen for longer
distance inter depot shunts.
One stop shop
With an unrivalled range of beers,
ciders, wines, spirits and soft drinks,
C&C’s distribution platform provides a
comprehensive “one stop shop” for licensed
premises owners.
Final Mile distribution
In FY2022, we completed the optimisation of
the English and Scottish delivery networks.
This consolidated volumes from three
separate networks into two, bringing all of
our final mile English distribution in-house,
driving on-going efficiencies, service
improvements and in turn enhance future
margins.
Communities
The Group is committed to
the communities in which we
operate and undertakes a range
of initiatives that benefit our
local communities, in particular
supporting charitable activities.
Stakeholder engagement
We aim to maintain open and
positive dialogue with all our
stakeholders. Our stakeholders
are an important part of our
operations and are referenced
throughout this report.
ESG Pillars
see pages 62 - 63
3 6
ESG Pillar
see pages 62 - 63
1
31
Corporate
Governance
Business
& Strategy
Financial
Statements
Strategic Report - Key Performance Indicators
FY2022 has seen the reopening of the on-trade across our core markets and a rebuilding of profit and
cash generation for the Group. As a consequence, we have reinstated the Key Performance Indicators
(“KPIs”) reported in FY2020 although we would note that performance in a number of KPIs compared
with pre COVID-19 remain impacted. With recognition of the current backdrop and covenant waiver
period net debt and liquidity continue to form part of the key financial metrics during FY2022.
Strategic Priority KPI
Definition (see also financial definitions
on pages 240 and 241) FY2022 Performance FY2022 Focus
Links to other
Disclosures
To enhance
earnings growth
Operating
profit
Operating profit/(loss) (before
exceptional items)
FY2019
FY2020
FY2021
FY2022
€104.5m
€120.8m
(€59.6m)*
€47. 9 m
To seek continuing
growth, through
revenue
enhancement,
acquisition synergies
and cost control
Group CFO
Review
page 54
Operating
margin
Operating profit/(loss) (before
exceptional items), as a
percentage of net revenue
FY2019
FY2020
FY2021
FY2022
6.6%
7.0 %
(8.1%)*
3.3%
Adjusted
diluted
earnings per
share
Attributable earnings before
exceptional items divided by
the average number of shares
in issue as adjusted for the
dilutive impact of equity share
awards
FY2019
FY2020
FY2021
FY2022
26.6c
29.6c
(21.1c)* *
7.5 c
To achieve adjusted
diluted EPS growth
in real terms
Group CFO
Review
page 54
Basic
earnings per
share
Attributable earnings divided by
the average number of shares
in issue as adjusted for the
dilutive impact of equity share
awards
FY2019
FY2020
FY2021
FY2022
23.4c
2.9c
(31.1c)* *
9.9c
To achieve EPS
growth in real terms
Group CFO
Review
page 54
To generate
strong cash
flows
Free Cash
Flow
Free Cash Flow is a non GAAP
measure that comprises cash
flow from operating activities
net of capital investment cash
outflows which form part of
investing activities (before
exceptional items)
FY2019
FY2020
FY2021
FY2022
€96.9m
€155.1m
(€91.2m)*
€28.4m
To generate
improved operating
cash flows
Group CFO
Review
page 54
Free Cash
Flow
Conversion
Ratio
The conversion ratio is the
ratio of free cash flow as a
percentage of EBITDA (before
exceptional items)
FY2019
FY2020
FY2021
FY2022
80.8%
101.0%
NM*
35.6%
To ensure the
appropriate
level of financial
gearing and
profits to service
debt
Net debt:
Adjusted
EBITDA
The ratio of net debt (Net debt
comprises borrowings (net
of issue costs) less cash less
leased liabilities) to Adjusted
EBITDA
FY2019
FY2020
FY2021
FY2022
2.51x
1.77x
NM*
3.40x
Move towards
medium term
target of 2.0 times
Net Debt/adjusted
EBITDA (excluding
leased liabilities)
Group CFO
Review
page 54
32 C&C Group plc Annual Report 2022
Strategic Priority KPI
Definition (see also financial definitions
on pages 240 and 241) FY2022 Performance FY2022 Focus
Links to other
Disclosures
To ensure the
appropriate level
of liquidity
Liquidity
Liquidity (liquidity comprises
cash on hand and headroom
available in the Group’s
revolving credit facility) as part
of our renegotiated covenants
FY2019
FY2020
FY2021
FY2022
€322.9m
€335.3m
€314.6m
€438.7m
Ensure sufficient
liquidity to meet
the on-going
requirements of
the business and
execute its strategy
Group CFO
Review
page 54
To ensure the
appropriate
level of financial
gearing
Net debt
Net debt (net debt comprises
borrowings (net of issue costs)
less cash)
FY2019
FY2020
FY2021
FY2022
€301.6m
€233.6m
€362.3m
€191.3m
Group CFO
Review
page 54
To deliver
sustainable
shareholder
returns
Progressive
dividend/
return to
shareholders
Total dividend per share paid
and proposed in respect of the
financial year in question
FY2019
FY2020
FY2021
FY2022
15.31c
5.5c
-
-
The Group will
continue to seek
to enhance
shareholder returns
Dividend
Payout Ratio
Dividend cover is Dividend/
Adjusted diluted EPS
FY2019
FY2020
FY2021
FY2022
57.6%
18.6%
-
-
To achieve
the highest
standards of
environmental
management
Reduction
in CO
2
emissions
Tonnes of CO
2
emissions*** FY2019
FY2020
FY2021
FY2022
38,092t
32,729t
26,865t
24,19 6t
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 62
To achieve
the highest
standards of
environmental
management
Waste
recycling
Tonnes of waste sent to landfill FY2019
FY2020
FY2021
FY2022
0t
0t
0t
0t
To achieve best
practice across the
Group, including
acquired businesses
To ensure safe
and healthy
working
conditions
Workplace
safety
accident
rate
The number of injuries that
resulted in lost-work days, per
100,000 hours working time in
production facilities
FY2019
FY2020
FY2021
FY2022
1.02
0.52
0.54
0.28
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 62
* COVID-19 had a material impact on KPIs in FY2021.
** During the current financial year, the Group completed a Rights Issue at a discounted price of £1.86. As the rights price was issued at a discount, this was equivalent to a bonus
issue of shares combined with a full market price. As such, IAS 33 Earnings Per Share requires an adjustment to the number of shares outstanding before the Rights Issue to
reflect the bonus element inherent in it and also for this to be included in the EPS calculation for the prior period presented so as to provide a comparable result.
*** Market based scope 1 and 2 emissions as stated in annual Carbon Disclosure Project return.
33
Corporate
Governance
Business
& Strategy
Financial
Statements
The Board has overall responsibility for
the Group’s system of internal control,
for reviewing its effectiveness and for
confirming that there is a process for
identifying, evaluating and managing the
principal risks affecting the achievement
of the Group’s strategic objectives. This
system of internal control can only provide
reasonable and not absolute, assurance
against material misstatement or loss.
The Group has established a risk
management process to ensure effective
and timely identification, reporting and
management of risk events that could
materially impact upon the achievement of
the Group’s strategic objectives and financial
targets. This involves the Board considering
the following:
• the nature and extent of the principal risks
facing the Group;
• the likelihood of these risks occurring;
• the impact on the Group should these
risks occur; and
• the actions being taken to manage these
risks to the desired level.
The Audit Committee oversees the
effectiveness of the risk management
procedures in place and the steps being
taken to mitigate the Group’s risks.
A process for identifying, evaluating
and managing significant risks faced by
the Group, in accordance with the UK
Corporate Governance Code 2018 and
the FRC Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting, has been in place for
the entire period and up to the date the
financial statements were approved. These
risks are reviewed by the Audit Committee
and the Board, who will also consider any
emerging risks for inclusion in the Group
Risk Register.
The risks facing the Group are reviewed
regularly by the Audit Committee with the
executive management team. Each of
the Group’s principal risks is assigned an
executive owner, who is responsible for
ensuring mitigating actions are sufficient
to bring risks to within the agreed appetite
and the risk management governance
framework ensures that these mitigations
and internal controls are embedded
and operate effectively throughout the
organisation.
The annual Board and the Audit Committee
agendas include a series of updates from
executive risk owners in relation to the
Group’s principal risks. These updates
include a history of the risk to date, key
mitigating actions and controls, an outline
of the residual risk and any future actions
planned to address control weaknesses.
The Audit Committee also receives regular
updates on risk management and internal
control effectiveness from the Head of
Internal Audit along with agreed mitigating
actions to resolve any weaknesses
identified.
Environmental, Social and
Governance (ESG) Committee
The ESG Committee, established in FY2021,
supports the Group’s ongoing commitment
to environmental, corporate social
responsibility and corporate governance
matters. This Committee is responsible
for monitoring and reviewing current and
emerging ESG trends, relevant international
standards and legislative requirements and
identifying how these are likely to impact the
strategy, operations and reputation of the
Group. The Committee is also responsible
for assessing the effectiveness of the
Group’s policies, programmes, practices
and systems for:
• identifying, managing and mitigating or
eliminating ESG risks in connection with
the Group’s operations and corporate
activity; and
• ensuring compliance with relevant legal
and regulatory requirements and industry
standards and guidelines applicable to
ESG matters.
Internal Controls and Risk
Management
The key features of the Group’s system
of internal control and risk management
include:
• review, discussion and approval of the
Group’s strategy by the Board;
• clearly defined organisation structures
and authority limits for the operational and
financial management of the Group and
its businesses;
• corporate policies for financial reporting,
treasury and financial risk management,
information technology and security,
project appraisal and corporate
governance;
• review and approval by the Board of
annual budgets for all business units,
identifying key risks and opportunities;
• monitoring of performance against
budgets on a weekly basis and reporting
thereon to the Board on a periodic basis;
• an internal audit function which reviews
key business processes and controls; and
• review by senior management and the
Audit Committee of internal audit findings,
recommendations and follow up actions.
The preparation and issue of financial
reports, including consolidated annual
financial statements is managed by the
Group Finance function with oversight from
the Audit Committee. The key features of
the Group’s internal control procedures with
regard to the preparation of consolidated
financial statements are as follows:
• the review of each operating division’s
period end reporting package by the
Group Finance function;
• the challenge and review of the financial
results of each operating division with the
management of that division by the Group
Chief Financial Officer;
• the review of any internal control
weaknesses highlighted by the external
auditor, the Group Chief Financial
Officer, Head of Internal Audit, Company
Secretary and Group General Counsel
and the Audit Committee; and
• the follow up of any critical weaknesses to
ensure issues highlighted are addressed.
Strategic Report - Management of Risks and Uncertainties
34 C&C Group plc Annual Report 2022
The Directors confirm that, in addition to
the monitoring carried out by the Audit
Committee under its terms of reference,
they have reviewed the effectiveness of
the Group’s risk management and internal
control systems up to and including the
date of approval of the financial statements.
This review had regard to all material
controls, including financial, operational and
compliance controls that could affect the
Group’s business. The Directors considered
the outcome of this review and found the
systems satisfactory.
Principal Risks and Uncertainties
During the year, the Audit Committee and
the Board carried out a robust assessment
of the principal risks facing the Group,
including those that would threaten its
business model, future performance,
solvency or liquidity. The principal risks and
uncertainties set out on pages 36 to 45
represent the principal uncertainties that
the Board believes may impact the Group’s
ability to effectively deliver its strategy
and future performance. The list does not
include all risks that the Group faces and
it does not list the risks in any order of
priority. The actions taken to mitigate the
risks cannot provide assurance that other
risks will not materialise and adversely
affect the operating results and financial
position of the Group. These principal risks
are incorporated into the modelling activity
performed to assess the ability of the
Group to continue in operation and meet its
liabilities as they fall due for the purposes
of the Viability Statement on pages 44 to
45. The Audit Committee and Board will
continue to monitor risk in the context of
relevant factors such as the ongoing impact
of the COVID-19 pandemic, as well as other
changes in the external environment, which
may create future risks.
Sustainability and Climate Change
Risk
The Board recognise the significant risks
posed by climate change and consideration
of these risks forms part of our existing risk
Principal Risk Matrix
High
8
12
1
14
9
2
3
15
7
5
10
4
6
13
Low
Low High
Impact
Likelihood
1. COVID-19
2. Regulatory / Social Attitude Changes to Alcohol
3. Economic & Political
4. Sustainability & Climate Change
5. Change in Customer Dynamics &
Group Performance
6. People & Culture
7. Health & Safety
8. Product Quality & Safety
9. Supply Chain Operations, Costs and Inflation
10. Information Technology
11. Cyber Security & Data Protection
12. Business Growth, Integration and
Change Management
13. Compliance with Laws &Regulations
14. Brand & Reputation
15. Financial & Credit
11
management processes. The increasing
importance of climate change risk was
reflected in the Board’s decision to include
climate change and sustainability as a
standalone principal risk in FY2021.
During the year, a cross-functional team was
created to further align our assessment and
disclosure practices within the requirements
of the Taskforce on Climate-related Financial
Disclosures (“TCFD”). This included
conducting a detailed climate change risk
assessment and scenario analysis with
the support of an expert external party.
The TCFD section on pages 46 to 53
summarises the work undertaken to date to
understand the potential impact of climate
change on the Group and outlines future
areas of management focus.
Corporate
Governance
Business
& Strategy
Financial
Statements
35
Changes to the Principal Risks
While there has been no significant change
in the principal risks in the last year, the
Group operates in a dynamic environment
where risks continue to evolve and the Group
continues to develop mitigation measures to
address them.
Although the COVID-19 pandemic has
continued to create uncertainty, as
Strategic Report - Management of Risks and Uncertainties
(continued)
vaccination rollouts progress and our
understanding and agility in managing
it through preventative measures has
grown, the outlook has improved. As a
consequence, we have chosen to not
consider COVID-19 as an individual risk,
but rather consider the amplifying effect
it has on a number of other principal risks
such as Health & Safety risk, People and
Culture, Supply Chain Operations, Costs
and Inflation, and Cyber and Information
Security.
Some fluctuation in risk trends did arise in
FY2022 including:
• Supply Chain Operations, Costs and
Inflation has increased from stable to
increasing as global activity has increased
supply chain pressures and inflation has
created headwinds across the business;
and
• Economic and Political, Sustainability and
Climate Change and People and Culture
continue to trend upwards.
Risk & Uncertainties
Impact Mitigation
Risk
Trend
Regulatory and Social Attitude Changes to Alcohol
The Group may be adversely affected
by changes in government regulations
affecting alcohol pricing (including duty),
sponsorship or advertising.
The Group and business units continue to engage with trade bodies to ensure any
proposed changes to legislation and restrictions are appropriate within the industry.
The Group is actively involved in BBPA and also complies with all Portman Group
guidance.
Within the context of supporting responsible drinking initiatives, the Group supports
the work of its trade associations to present the industry’s case to government.
The Group has developed low, and zero, alcohol options for brands in order to
address legislation and possible duty increases as well as appeal to those consumers
looking for a healthier choice.
Economic and Geo-Political
Our business, financial results and
operations may be adversely affected by
economic or geo-political instability and/or
uncertainty, such as the conflict in Ukraine.
The Group’s performance is also impacted
by potential recessions, inflation, exchange
rates, taxation rates and social unrest.
The Board and management will continue to consider the impact on the Group’s
businesses, monitor developments and engage with the UK, Irish and Scottish
governments to help ensure a manageable outcome for our businesses.
Group businesses are active members in respected industry trade bodies including
being a steering committee member of the all-party UK Parliamentary Beer Group.
On an ongoing basis, the Group seeks, where appropriate, to mitigate currency risk
through hedging and structured financial contracts and take appropriate action to help
mitigate the consequences of any decline in demand within its markets.
We have implemented action plans to protect the profitability and liquidity of the Group
and mitigate a significant proportion of our cost base. We continue to review our cost
base for additional savings.
We remain vigilant to changes in local jurisdictions and retain the flexibility to take
appropriate mitigating action as necessary.
36 C&C Group plc Annual Report 2022
Impact Mitigation
Risk
Trend
Sustainability and Climate Change
The Group recognises the significant
environmental challenges the world
faces due to a changing climate and the
implications that this can have for our
business and supply chains.
Physical climate impacts and related policy
and/or market changes may disrupt our
operations or impact demand for our
products.
Failure to implement policies and meet
required sustainability and ethical
standards and social perceptions could
significantly impact C&C’s reputation as
well as potentially impact future growth.
The Group has established a strong governance model which includes an ESG
Committee responsible for the delivery of our sustainability strategy. Ambitious targets
are in place with regard to reducing the carbon footprint of our operations, our water
intensity, reducing waste and also the use of single use plastics. Clonmel continues to
be ISO 14001 accredited for an effective environmental management system.
C&C Group plc have pledged to be a carbon-neutral business by 2050 at the latest.
We have recently set our emissions reduction targets which are grounded in climate
science and will be validated by the Science Based Targets initiative (‘SBTi’). We are
committed to reduce our absolute Scope 1 and Scope 2 GHG emissions by 35%
by 2030 (Vs a FY2020 base year). To achieve our target of reducing our Scope 3
emissions by 25% (Vs a FY2020 base year) by 2030, we have also committed that
suppliers and customers making up 67% of our Scope 3 emissions (Purchased
Goods, Downstream Transport and Use of Sold Goods will have science-based
targets in place by 2026. The Group will continuously engage with suppliers and
customers to support them to set science-based targets for their own emissions.
A cross functional team has been established to lead our alignment with the TCFD
guidance. An expert external party has also been engaged to support this process.
We continue to embed climate considerations into our overall strategic planning and
investment appraisal process.
Sustainability and climate related metrics were included as part of the Long-Term
Incentive Plan (‘LTIP’) for Executive Directors in FY2022.
We have established a Risk & Compliance Committee which is responsible for
monitoring and managing climate risk. This committee is composed of executives
and various levels of management from across the Group and will meet bi-monthly.
The Risk Committee for Sustainability and Climate Change reports to the Audit
Committee; however, we are in the process of evaluating and developing additional
reporting lines which will see the Risk Committee for Sustainability and Climate
Change reporting also to the ESG Committee in order to improve our oversight of
climate-related risks and opportunities.
The Group ensures strong overall corporate social responsibility of suppliers is
reviewed and assessed both on an ongoing basis and as part of new tenders to
ensure sustainability and ethical practices are a fundamental part of the supply chain.
Risk Movement
New
No change
Increasing
Decreased
37
Corporate
Governance
Business
& Strategy
Financial
Statements
Impact Mitigation
Risk
Trend
Customer and Consumer Dynamics and Group Performance
Consumer preference may change, new
competing brands may be launched and
competitors may increase their marketing
or change their pricing policies. Failure to
respond to competition and/or changes
in customer preferences could have an
adverse impact on sales, profits and cash
flow within the Group.
COVID-19 may have an impact on the
viability of a certain cohort of the Group’s
customers and on underlying consumer
behaviour and preferences.
Through diversification, innovation and strategic partnerships, we are developing our
product portfolio to enhance our offering of niche and premium products to satisfy
changing consumer requirements including the production of low and non-alcoholic
variants of our brands.
The Group has a programme of brand investment, innovation and product
diversification to maintain and enhance the relevance of its products in the market.
The Group also operates a brand‐led model in our core geographies with a
comprehensive range to meet consumer needs.
In order to specifically assist customers manage the impact of COVID-19, the Group
provided a ‘holiday’ on capital and interest repayments to loan customers, full credit or
‘new for old’ on un-broached kegs, together with a dedicated helpline to offer advice
and guidance around government support initiatives that were introduced and how to
access them as well as assistance and advice in relation to hygiene measures.
People and Culture
The Group’s ability to attract, develop,
engage and retain a diverse, talented
and capable workforce is critical if the
Group is to continue to compete and grow
effectively.
A number of external factors including the
COVID-19 pandemic, have increased the
competition for talent and labour across all
sectors.
Failure to continue to evolve our culture,
diversity and inclusion could impact our
reputation and delivery of our strategy.
The Group seeks to mitigate this risk through employment policies and procedures,
as well as ongoing enhancements to pay and conditions, including benchmarking
remuneration packages to ensure market competitiveness, broadening the scope of
variable elements of remuneration and the development of retention and succession
plans for critical roles.
The Group’s approach to talent management and executive succession planning is
regularly reviewed by the Group Executive and is overseen by the ESG, Nomination
Committee and the Board.
A key focus of the Group’s sustainability agenda is to build a purpose led, culturally
diverse, engaged and inclusive workforce, where our people can be at their best,
contribute to the Group’s success and realise their career ambitions. Progress is
monitored through KPIs and a six monthly Group wide employee engagement survey.
The Group has continued to prioritise the safety and wellbeing of employees as it has
navigated the challenges of the COVID-19 pandemic.
Strategic Report - Management of Risks and Uncertainties
(continued)
38 C&C Group plc Annual Report 2022
Impact Mitigation
Risk
Trend
Health and Safety
A health and safety related incident could
result in serious injury to the Group’s
employees, contractors, customers and
visitors, which could adversely affect
our operations and result in reputational
damage, criminal prosecution, civil litigation
and damage to the reputation of the Group
and its brands.
The continuing COVID-19 pandemic
presents a specific risk to the health
and welfare of the Group’s employees,
as measures required to be adopted by
societies and businesses to help prevent
the spread of the virus adversely effect our
employees.
The Group has a Health, Safety and Environmental (‘HSE’) team who work closely
with management to ensure that the Group complies with all health, safety and
environmental laws and regulations with ongoing monitoring, reporting and training.
The Group has established protocols and procedures for incident management and
product recall and mitigates the financial impact by appropriate insurance cover.
Stringent COVID-19 protocols remain in place at all sites. These include remote
working in some locations, employee and visitor screening protocols, segregation and
zoning and use of appropriate personal protective equipment.
Our support for mental health and wellbeing has increased this year, with a significant
expansion of our Mental Health First Aider population and investment in a range of
resources.
Product Quality and Safety
The quality and safety of our products is
of critical importance and any failure in this
regard could result in a recall of the Group’s
products, damage to brand image and civil
or criminal liability.
The COVID-19 virus continues to present
additional risk to the safe production of the
Group’s products.
The Group has implemented quality control and technical guidelines which are
adhered to across all sites. Group Technical continually monitor quality standards and
compliance with technical guidelines.
The Group also has quality agreements with all raw material suppliers, setting out
our minimum acceptable standards. Any supplies which do not meet the defined
standards are rejected and returned.
The Group has enacted specific business continuity plans and a range of measures
to protect the business in line with the advice of governments and local health
authorities; and ensure the safe production and distribution of the Group’s products.
Risk Movement
New
No change
Increasing
Decreased
39
Corporate
Governance
Business
& Strategy
Financial
Statements
Impact Mitigation
Risk
Trend
Supply Chain Operations, Costs and Inflation
Circumstances such as the prolonged
loss of a production or storage facility,
disruptions to its supply chains or critical
IT systems and reduced supply of raw
materials may interrupt the supply of the
Group’s products, adversely impacting
results and reputation.
FY2022 has seen unprecedented global
supply chain disruption. The COVID-19
pandemic combined with an increased
number of other disruptive events have
posed the risk of an interruption to the
supply of raw materials or to the effective
operation of the Group’s manufacturing
facilities.
Also, there is a risk of increased input costs
due to poor harvests and price of inputs.
Very recently, the conflict in Ukraine has
contributed to heightened uncertainty and
inflationary pressures.
The Group seeks to mitigate the operational impact of such an event through
business continuity plans, which are tested regularly to ensure that interruptions to
the business are prevented or minimised and that data is protected from unauthorised
access, contingency planning, including involving the utilisation of third party sites
and the adoption of fire safety standards and disaster recovery protocols. The Group
seeks to mitigate the financial impact of such an event through business interruption
and other insurance covers.
The Group has enacted specific business continuity plans including a range of
measures to protect the integrity of production and distribution facilities and increased
packaging capacity to meet increased take home demand. To date we have
maintained strong levels of service into our customer base. We have taken action
to ensure our facilities are staffed sufficiently, that our production plans optimise the
capacity available at each of our sites and that we prioritise the SKUs that current
consumer demand requires. The Group is also working closely with its suppliers to
protect the integrity and consistency of supply of raw materials.
The Group seeks to minimise input risks through long‐term or fixed price supply
agreements, where applicable. The Group continues to assess inflationary and other
supply chain pressures and impacts on product pricing and will continue to work
with our suppliers to identify opportunities to improve supply chain resilience and to
selectively pre-purchase products in order to ensure continuity of supply.
The Group does not seek to hedge its exposure to commodity prices by entering into
derivative financial instruments.
Information Technology
The Group relies on robust IT systems and
supporting infrastructure to manufacture
and trade effectively. Any significant
disruption or failure of key systems could
result in business disruption and revenue
loss, accident or misappropriation of
confidential information.
Failure to properly manage existing
systems, or the implementation of new IT
systems may result in increased costs and/
or lost revenue, and reputational damage.
The Group has continued to focus on modern cloud-based assets which are naturally
more resilient to failure.
Business and IT continuity has been maintained during the COVID-19 pandemic by
updating operating models to ensure the safety of our workforce and customers.
Nevertheless, the risk of disruption or failure of critical IT infrastructure, aswell as
process failure remains asignificant risk.
Strategic Report - Management of Risks and Uncertainties
(continued)
40 C&C Group plc Annual Report 2022
Impact Mitigation
Risk
Trend
Cyber Security and Data Protection
Failure or compromise of our IT
infrastructure or key IT systems may result
in theft, loss of information, inability to
operate effectively, financial or regulatory
penalties, loss of financial control and
negatively impact our reputation. Failure
to comply with legal or regulatory
requirements relating to data security
(including cyber security) or data privacy in
the course of our business activities, may
result in reputational damage, fines or other
adverse consequences, including criminal
penalties and consequential litigation,
adverse impact on our financial results or
unfavourable effects on our ability to do
business.
There is a constant threat of significant
and sophisticated cyber attacks including
phishing, ransom ware, malware and social
engineering.
A continuation of home working as a result
of the COVID-19 pandemic has led to
an increase in the risk of cyber/phishing
attacks across all organisations.
Using personal data in a non-compliant
manner (whether deliberately or
inadvertently) may exacerbate the impact of
security incidents.
Following the incident affecting Matthew Clark and Bibendum IT systems in April
2021, we have reviewed our information security and cyber preparedness policies and
procedures, enhanced our information technology systems and controls, including the
appointment of a Technology and Transformation Director and Group Head of IT.
In the field of information technology and security, the Group undertakes a regular
security assurance programme, testing controls, identifying weaknesses and
prioritising remediation activities where necessary. This includes periodic best
practice specialist security testing by a leading third party provider and regular system
scanning to identify security weaknesses. Issues are assessed for risk and are
comprehensively managed as part of the Group’s risk management programme. The
Board and Audit Committee is presented with regular detailed Information Security
Reports by the Technology and Transformation Director and Group Head of IT, which
includes recommendations for further reinforcements, and a roadmap for further
risk reduction. As a demonstration of our commitment to tackling cyber security we
are currently pursuing Cyber Essentials Plus accreditation from the National Cyber
Security Centre (‘NCSC’).
An appropriate governance structure is in place including an IT & DP risk committee.
Cyber security is a major focus area for the Board and Audit Committee who this
year received three formal updates from the Group Transformation and Technology
Director.
A programme of initiatives has been implemented and enhancements made to further
reduce cyber risk. Specialist external IT security team undertake a 24/7 security
monitoring service, a vulnerability management programme, a software review
process, supply chain partner audits, a data loss prevention programme and identity
governance controls amongst other initiatives.
During FY2022 we continued our ongoing programme of investment in cyber security
controls which included Endpoint Detect and Respond (‘EDR’), Cloud Access Security
Broker (‘CASB’), Domain based Message authentication, Reporting and Conformance
(‘DMARC’), email authentication and enhanced data loss prevention controls.
Business continuity, disaster recovery and crisis management plans are in place and
tested on a regular basis.
We continue to prioritise a number of initiatives to further minimise the risk profile,
including employees receiving regular online cyber security training and ongoing
awareness is promoted through monthly phishing training and other initiatives to keep
employees abreast of new and emerging threats.
Policies are in place regarding the protection of both business and personal
information, with support from the newly appointed, Group Data Protection Officer.
Risk Movement
New
No change
Increasing
Decreased
41
Corporate
Governance
Business
& Strategy
Financial
Statements
Strategic Report - Management of Risks and Uncertainties
(continued)
Impact Mitigation
Risk
Trend
Business Growth, Integration and Change Management
As the Group reacts to the effects of
the COVID-19 pandemic, it is necessary
to adjust to change and assimilate new
business models. The breadth and pace
of change can present strategic and
operational challenges.
Business integration and change that
are not managed effectively could result
in unrealised synergies, poor project
governance, poor project delivery,
increased staff turnover, erosion of value
and failure to deliver growth.
Significant projects and acquisitions have formal leadership and project management
teams to deliver integration.
Regular Group communications ensure effective information, engagement and
feedback flow to support cultural change.
The Executive Management team oversees change management and integration risks
through regular meetings.
Compliance with Laws and Regulations
The Group operates in an environment
governed by strict and extensive regulations
to ensure the safety and protection of
customers, shareholders, employees
and other stakeholders. These laws and
regulations include hygiene, health and
safety, the rules of the London Stock
Exchange and competition law. Changing
laws and regulation may impact our ability
to market or sell certain products or could
cause the Group to incur additional costs
or liabilities that could adversely affect its
business. Moreover, breach of our internal
global policies and standards could result in
severe damage to our corporate reputation
and/or significant financial penalty.
Companies face increased risk of fraud and
corruption, both internally and externally,
due to financial pressures and changes
to ways of working as a consequence of
COVID-19.
The Company Secretary and Group General Counsel is a member of the Executive
Committee and is supported by appropriately skilled in-house legal, data protection
and company secretarial resource, with further support provided by external lawyers
and advisors.
Policies and procedures are in place to ensure compliance with regulations and
legislation, providing updated documentation, training and communication across the
Group.
The Group’s Code of Conduct and supporting policies, clearly define the standards
and expectations for all employees and third parties.
A mandatory online employee compliance programme is in place to embed
employees understanding of key compliance risks.
The Group’s Vault whistleblowing service, managed and facilitated by an independent
third party, is available to all employees to raise concerns with regard to suspected
wrongdoings or unethical behaviours. All calls are followed up and investigated fully
with all findings reported to the Board.
The Group maintains appropriate internal controls and procedures to guard against
economic crime and imposes appropriate monitoring and controls on subsidiary
management.
42 C&C Group plc Annual Report 2022
Impact Mitigation
Risk
Trend
Brand and Reputation
The Group faces considerable risk if
we are unable to uphold high levels of
consumer awareness, retain and attract
key associates and sponsorships for our
brands, or if we have inadequate marketing
investment to support our brands.
Maintaining and enhancing brand image
and reputation through the creation
of strong brand identities is crucial for
sustaining and driving revenue and profit
growth.
The closure of on-trade outlets and a
reduction in the Group’s marketing and
brand advertising due to COVID-19 may
impact the Group’s brand health scores.
To mitigate this risk, C&C has defined values and goals for all our brands. These form
the foundation of our product and brand communication strategies.
Central to all our brand image initiatives is ensuring clear and consistent messaging to
our targeted consumer audience.
Executive Management, Group Legal and internal/external PR consultants work
together to ensure that all sponsorship and affiliations are appropriate and protect the
position of our brands.
The Group is monitoring the impact of the rapidly changing trading environment on
the Group’s brands and will make necessary investment decisions to protect the
Group’s brand health scores and reputation.
Financial and Credit
The Group is subject to a number of
financial and credit risks such as adverse
exchange and interest rate fluctuations,
availability of supplier credit, credit
management of customers and possible
increase to pension funds deficits and cash
contributions.
COVID-19 may have a further impact on
the Group’s liquidity, due to lower on-trade
revenues, customers’ ability to honour
their obligations, and the Group’s ability to
access supplier credit.
Non-conformities of accounting and
financial controls could impair the
accuracy of the data used for internal
reporting, decision-making and external
communication.
The Group seeks to mitigate currency risks, where appropriate, through hedging and
structured financial contracts to hedge a portion of its foreign currency transaction
exposure. It has not entered into structured financial contracts to hedge its translation
exposure on its foreign acquisitions.
In relation to pensions, continuous monitoring, taking professional advice on
the optimisation of asset returns within agreed acceptable risk tolerances and
implementing liability‐management initiatives.
A range of credit management controls are in place which are regularly monitored by
management to minimise the risk and exposure.
The Group is working with all customers and suppliers to minimise the adverse impact
of COVID-19 on the business.
Contracts may be renegotiated. We continue to focus on retention and new sales
opportunities as customers move to more resilient and “best in class” operations.
A range of key internal financial controls, such as segregation of duties, authorisations
and detailed reviews are in place with regular monitoring by management to ensure
the accuracy of the data for reporting purposes.
Risk Movement
New
No change
Increasing
Decreased
Assessment of the Group’s
Prospects
Going Concern
The Directors have adopted the going
concern basis in preparing the financial
statements after assessing the Group’s
principal risks including the risks associated
with COVID-19.
Following the Rights Issue that the Group
successfully completed in June 2021 in
which the Group raised £151 million (€176
million) and as a consequence of COVID-19,
the debt covenants for 31 August 2022
were renegotiated to increase the threshold
of the Group's Net Debt/Adjusted EBITDA
covenant to not exceed 4.5x and to reduce
the Interest cover covenant to be not
less than 2.5x. Restrictions including a
minimum liquidity requirement of €150.0
million each month and a monthly gross
debt limit of €700.0 million also apply. The
Group is on track to meet these amended
covenants, which end in August 2022 and
revert to the traditional covenant metrics
43
Corporate
Governance
Business
& Strategy
Financial
Statements
Strategic Report - Management of Risks and Uncertainties
(continued)
(Net Debt: Adjusted EBITDA not exceeding
3.5:1 and Interest Cover not less than 3.5:1)
for its FY2023 full year results. In fact, the
Group is back within its traditional covenant
metrics as at 28 February 2022. However
the restrictions will continue to apply until the
Group demonstrates compliance with the
traditional covenant metrics at its FY2023 full
year results, unless it can show Net Debt:
Adjusted EBITDA not exceeding 3:1 and
Interest Cover not less than 4:1 for its FY2023
half year results, in which case the restrictions
will end at that point.
The proceeds from the Rights Issue of £151
million (€176 million), coupled with a return
to profitability and cash generation following
the easing of government restrictions around
COVID-19 in our core markets and disciplined
balance sheet management has led to net
debt excluding leases and liquidity of €191
million and €439 million respectively at year
end compared with €362 million and €315
million respectively in FY2021. The Group
delivered a leverage of 3.4x Net Debt/EBITDA
as at 28 February 2022 and as previously
noted is back within its traditional covenant
metrics.
The Group returned to profitability in May
2021 following the easing of government
restrictions around COVID-19 in our core
markets, with trading ahead of plan.
However, renewed Government restrictions
on the hospitality industry around the key
Christmas trading period adversely impacted
performance. With the lifting once again
of restrictions towards the latter stages of
FY2022, the Group’s on-trade performance
improved, providing a platform for a clean
start to FY2023. Cost inflation pressures have
grown over recent months and in response,
the Group implemented a series of price
increases which, alongside the previously
announced €18.0 million cost reduction
programme and cost hedge positions taken,
affords the Group a degree of protection from
the inflationary environment as we enter into
FY2023.
The Directors assessed the Group’s cash
flow forecasts for the period ending 31
August 2023 (the going concern “assessment
period”). The Cashflows included various
stress testing scenarios around higher
costs, an evolving inflationary environment
and reduced volumes, in part associated
with the impact of the on-going conflict in
Ukraine, but even at FY2022 profit levels,
which were significantly curtailed as a
consequence of the COVID-19 restrictions,
the Group would have sufficient headroom to
covenants. The Group's cash flow forecasts
assume the continuation of trading over the
assessment period with no lockdowns or the
reintroduction of COVID-19 restrictions.
Overall conclusion
The headroom on the covenants within the
financing facilities have been reviewed in
detail by management and assessed by the
Directors. Given the successful Rights Issue
in June 2021; the return to profitability in the
Group’s core markets; the price increases
implemented, cost hedge positions taken
and the disposal of the Group’s share of
Admiral Taverns in FY2023, the Group's
cashflow forecasts demonstrate significant
headroom on the covenants within the
financing facilities. Given the quantum of
headroom, the Directors have concluded that
the covenants will be satisfied and therefore
consider it appropriate to adopt the going
concern basis of accounting with no material
uncertainties as to the Group’s ability to
continue to do so.
Viability Statement
As set out in Provision 31 of the UK
Corporate Governance Code, the Directors
have assessed the prospects of the Group
and its ability to meet its liabilities as they fall
due over the medium-term. Specifically, the
Directors have assessed the viability of the
business over a three-year period to February
2025. In conducting the assessment the
Directors have taken account of the Group’s
current position and prospects, the Group’s
strategy, the Board’s risk appetite and the
Group’s Principal Risks and Uncertainties as
set out above and how these are identified,
managed and mitigated. Based on this
assessment, which includes a robust
assessment of the potential impact that these
risks would have on the Group’s business
model, future performance, solvency and
liquidity, the Directors have a reasonable
expectation that the Group will be able to
continue in operation and meet its liabilities
as they fall due over the three-year period to
February 2025.
Group’s strategic planning process
The Board considers annually a strategic
plan. Current year business performance
is reforecast during the year and a more
detailed budget is prepared for the following
year. The most recent financial plan was
approved by the Board in March 2022. The
plan is reviewed and approved by the Board,
with involvement from the Group CEO, Group
CFO and the management team. Part of the
Board’s role is to consider the appropriateness
of key assumptions, considering the external
environment, business strategy and model
including the impact of COVID-19.
Period of Assessment
Given the uncertainty at the time of issuing last
year’s Annual Report, the Directors determined
that a two year period was the appropriate
period to consider the Group’s viability. Given
the current outlook for future trading, the
Directors have determined that the three year
period to February 2025 is an appropriate
period over which to provide its viability
statement. This period has been considered
for the following reasons:
• The business model can be evolved for
significant changes in market structure
or government policy over the three year
period;
• For major investment projects three years is
considered by the Board to be a reasonable
time horizon for an assessment of the
outcome; and
• The Group’s strategic planning cycle covers
a three year period.
Viability Assessment
The Directors’ assessment of the Group’s
viability has been made with reference to the
2022 performance and its budget for FY2023.
The Group returned to profitability in May 2021
following the easing of government restrictions
around COVID-19 in our core markets, with
trading ahead of plan. However, renewed
Government restrictions on the hospitality
industry around the key Christmas trading
44 C&C Group plc Annual Report 2022
Risk Movement
New
No change
Increasing
Decreased
period adversely impacted performance.
With the lifting of restrictions towards the
latter stages of FY2022, the Group’s on-
trade performance improved, providing
a platform for a clean start to FY2023.
Cost inflation pressures have grown over
recent months and in response, the Group
implemented a series of price increases
which, alongside the previously announced
€18.0 million cost reduction programme
and cost hedge positions taken, affords
the Group a degree of protection from the
inflationary environment as we enter into
FY2023.
The Group also successfully completed
a Rights Issue in June 2021, raising gross
proceeds of £151 million (€176 million). This
coupled with a return to profitability and
cash generation following the easing of
government restrictions around COVID-19
in our core markets and disciplined balance
sheet management has led to net debt
excluding leases and liquidity of €191 million
and €439 million respectively at year end
compared with €362 million and €315 million
respectively in FY2021. The Group delivered
a leverage of 3.4x Net Debt/EBITDA as
at 28 February 2022 and are back within
the traditional covenant metrics as at 28
February 2022 (Net Debt: Adjusted EBITDA
not exceeding 3.5:1 and Interest Cover
not less than 3.5:1). However, the waiver
restrictions will continue to apply until the
Group demonstrates compliance with the
traditional covenant metrics at its FY2023
full year results, unless it can show Net
Debt: Adjusted EBITDA not exceeding 3:1
and Interest Cover not less than 4:1 for its
FY2023 half year results, in which case the
restrictions will end at that point.
The Board reviewed the assessment of the
Group’s prospects made by management,
including:
• The development of a rigorous
planning process, the outputs of which
are comprised of a strategic plan, a
consolidated financial forecast for the
current year and financial projections for
future years covering the period of the
plan;
• A comprehensive review of the strategic
plan as part of its annual strategy review,
with regular monitoring of the achievement
of strategic objectives taking place at each
Board meeting;
• Assumptions are built at both Group
and business unit levels and are subject
to detailed examination, challenge and
sensitivity analysis by management and
the Directors. This included assumptions
around higher cost and reduced volumes
but even at FY2022 profit levels which were
significantly curtained as a consequence
of the COVID-19 restrictions, the Group
would have sufficient headroom. The
Group’s cash flow forecasts assume the
continuation of trading over the assessment
period with no lockdowns or the
reintroduction of COVID-19 restrictions;
• A consideration of how the impact of one
or more of the Group’s Principal Risks
and Uncertainties, particularly in respect
of the extent and timing of the recovery in
the on-trade business from the impact of
the COVID-19 pandemic, could materially
impact the Group’s performance, solvency
or liquidity; and
• The impact of climate change on the
Financial Statements. The assessment
concluded that climate change is not
expected to have a material impact on the
viability of the Group in the short term.
Further detailed scenario and qualification
analysis on the CROs in the TCFD report
will be examined in FY2023.
These considerations include external factors
such as the impacts of the expected high
levels of inflation, lower economic growth,
particularly in our key areas of operation,
the potential impacts of COVID-19 on the
Group, unfavourable currency exchange
rate movements, increased regulations
and internal factors such as the strategic
plan under-delivering, the loss of a key
production site or a health and safety related
event. These considerations also took into
account additional mitigating measures
available to the Group, including the ability to
reduce capital expenditure and the potential
availability of additional debt facilities. As at 28
February 2022, the Group had total undrawn
committed credit facilities of
€374.0 million,
and €64.7 million cash net of overdrafts.
The Audit Committee reviews the output of
the viability assessment in advance of final
evaluation by the Board. Having reviewed
these elements, the COVID-19 related
challenges and impacts experienced in
FY2022 and those anticipated for the years
ahead, current performance, forecasts,
debt servicing requirements, total facilities
and risks, the Board has a reasonable
expectation that the Group has adequate
resources to continue in operation, meet its
liabilities as they fall due and retain sufficient
available cash across the assessment
period.
The Board therefore has a reasonable
expectation that the Group will remain viable
over the period of assessment. The Board
does not expect any reasonably anticipated
COVID-19 outcome to impact the Group’s
long-term viability.
Strategic Report Approval
The Strategic Report, outlined on pages
2 to 81, (including the assessment of
the Group’s prospects as set out above)
incorporates the Highlights, the Business
Profile and Key Performance Indicators,
the Chair’s Statement, the Group Chief
Financial Officer’s report, the Sustainability
Report and the Management of Risks and
Uncertainties section of this document.
This report was approved by the Board of
Directors on 17 May 2022.
Mark Chilton
Company Secretary
45
Corporate
Governance
Business
& Strategy
Financial
Statements
TCFD Disclosure
Response to Climate Change
It is evident that climate change requires
urgent action. Whilst the Group has
implicitly considered climate change
factors in strategic decisions over the last
number of years, it was recognised that
this was required in a more formal and
robust manner in FY2022. During the year,
we strengthened our analysis of climate
related matters, as well as our governance
and reporting of them. This included
strengthening our contributions and
commitments to decarbonising our value
chain as well as reviewing our strategies
around climate risk management and
adaptation.
Moreover, as part of our efforts to
understand the impacts of climate change
on our business, we have begun alignment
towards the Task Force on Climate-
related Financial Disclosures (“TCFD”)
recommendations with the help of external
consultants.
In accordance with LR 9.8.6R(8) and LR
9.8.7, we are required to include a statement
in this Annual Report and Financial
Statements setting out whether the Group
has included climate-related financial
disclosures consistent with the TCFD
Recommendations and Recommended
Disclosures (“TCFD Recommendations”).
We have included climate-related financial
disclosures in this Annual Report and
Financial Statements consistent with the
TCFD Recommendations, except for the
following:
• Formally embedding climate-related risks
and opportunities (“CROs”) within our
strategy and financial planning through
the use of quantitative scenario analysis
(Recommendations Strategy (b) and (c))
• Identifying and monitoring metrics and
targets aligned to all of the climate-related
risks and opportunities that were identified
as part of our qualitative scenario analysis
(Recommendation Metrics & Targets (a)
and (c)).
Our climate-related disclosures are set out
below. This is the first year we have used the
TCFD framework to support our reporting
and we are committed to ensuring that we
continue to improve our climate-related
disclosures over the next year.
Governance
The Board is responsible for overseeing
climate change risks and opportunities
and considers climate-related issues when
reviewing and guiding the Group’s strategy,
as well as when undertaking any major
plans of action or capital expenditure. C&C’s
climate-related issues are also integrated
into decisions regarding C&C’s annual
budgets, business plans and performance
objectives. The Group is committed
to ensuring climate-related issues are
considered when setting the Group’s risk
management policies going forward, as
discussed within the Risk Management
section of this report on page 51.
Additionally, during the year, the Board has
undertaken initial training on climate change
related matters and the TCFD framework.
A short list of CROs and the output of the
scenario analysis conducted (see strategy
section on page 47) were presented to the
Board in March 2022. During the remaining
months of 2022, we intend to carry out
more extensive training on ESG and climate
change as well as the associated risks
and opportunities, in order to increase our
leadership’s knowledge, understanding and
awareness of climate related issues.
Elements of the Board’s oversight of
climate change have been delegated to the
ESG Committee which was established
in September 2020. See page 107 of the
ESG Committee report which contains its
responsibilities and matters considered
during the year. The Chair of the ESG
Committee is responsible for providing
the Board with an update around all ESG
matters, including climate change. The ESG
Committee is supported by a number of
other Committees and Working Groups:
Board of Directors
Executive
Committee
Risk Committees
(for each Principle Risk on
Risk Register including
Sustainability & Climate Change)
ESG Working Group
led by Head of ESG
ESG Champions
Audit
Committee
Nomination
Committee
Remuneration
Committee
ESG
Committee
Chief Financial
Officer
Chief Executive
Officer
Board level
Management level
Existing reporting lines
Planned reporting lines
46 C&C Group plc Annual Report 2022
Risk & Compliance Committee: In
our FY2021 Annual Report we included
Sustainability and Climate Change as one of
our principal risks. Therefore, in October of
2021 we established a Risk & Compliance
Committee which is responsible for
monitoring and managing this principal risk.
This Committee is composed of executives
and various levels of management from
across the Group, and will meet bi-monthly.
The Risk Committee for Sustainability
and Climate Change reports to the
Audit Committee; however, we are in the
process of evaluating and developing
additional reporting lines which will see
the Risk Committee for Sustainability and
Climate Change reporting also to the ESG
Committee in order to improve C&C’s
oversight of climate-related risks and
opportunities.
ESG Working group: This is a core working
group focused on initiating and overseeing
projects related to ESG matters. Supporting
the ESG working group are a number of
ESG Champions across the business. The
responsibilities of the Champion role focus
on providing upward feedback on ESG
initiatives to the ESG Committee.
We intend to roll out training on climate-
related matters to key colleagues including
ESG Champions and Procurement / Buying
teams so that they will be able to contribute
towards the update of risk registers and the
identification of climate-related risks.
Strategy
The Group has pledged to be a carbon-
neutral business by 2050. We have
grounded our emissions reduction targets
in climate science through the Science
Based Targets initiative (‘SBTi’), which will be
validated by the end of 2023 at the latest as
discussed on page 65 of the Responsibility
Report.
Our Approach to Identifying Climate-
related Risks and Opportunities.
In FY2022 we collaborated with external
consultants to support us in identifying the
Group’s CROs and to carry out a qualitative
scenario analysis to understand the impact
of the identified risks on our business. We
completed various workshops involving
our external consultants and a range of
key stakeholders within C&C to consider
potential CROs. Throughout this process,
we utilised our existing Risk Management
framework (as described on page 34 of the
annual report) to assess the impact and
The Directors’ Remuneration Committee report on page 117 contains details on the ESG
related metrics considered by the Committee. Specifically in relation to climate change, the
following metrics are relevant:
Metric Target Relevant to
Carbon reduction for the
Group
The Group has set a target
to reduce its Scope 1
emissions and Scope 2
emissions
1
over the three
financial years ending with
FY2024 as follows:
Threshold - 6% reduction
Maximum - 12% reduction
Executive Directors
1. Scope 1: direct emissions from owned or controlled sources, which includes emissions from Group-owned or
operated facilities and vehicles.
Scope 2: indirect emissions from the generation of purchased energy e.g. electricity, steam, heat and cooling.
the likelihood associated with each CRO.
To take into consideration the longer term
effects of climate change we redefined the
Risk Time Frame.
The below time-horizons, which focus on
when the identified CRO is likely to begin
having a material impact on the business’
goals and objectives, were approved for use
by the ESG Committee:
Time Frame Description
Short term Present day to
2025
Medium Term 2025 to 2030
Long term 2030 to 2050
Corporate
Governance
Business
& Strategy
Financial
Statements
47
Our Identified CROs
Using the process outlined above, we
identified a “long list” of 38 CROs which
was provided to the ESG Committee. We
assigned each one a specific time horizon,
impact level and likelihood and from this we
prioritised 5 risks and 2 opportunities (“short
list”) based on their overall rating.
Based on these shortlisted CROs, in FY2023
we will further develop additional targets and
metrics that will allow us to manage these
risks / leverage these opportunities, as well
as measure our progress against them.
While the above represent the risks and
opportunities that we have identified as
being the most relevant to C&C at this time,
we will continue to monitor the risks that we
have identified as part of our long list and
consider emerging CROs as new climate
data and policies emerge. We expect this
list to evolve over time. We also continue
to actively monitor the changing landscape
of sustainability reporting requirements to
ensure that we are meeting the reporting
expectations of our key stakeholders
including regulators, investors and
customers.
Understanding the impact on our CROs
through Scenario Analysis
As part of our efforts to identify, assess,
and mitigate climate-related risks and
opportunities we have carried out a
qualitative scenario analysis using the
Representative Concentration Pathways
(“RCP”) Scenarios published by the
Intergovernmental Panel on Climate Change
(“IPCC”). For our qualitative analysis, we
used the IPCC RCP2.6 (to support our
analysis of transition risks) and RCP8.5
(to support our analysis of physical risks)
scenarios to assess the impact of different
temperature increases on our short list of
CROs.
Under the RCP2.6 scenario, the main risk
for C&C will be the increase in climate
change levies and taxes that would have to
be introduced in most countries to be able
to reduce GHG emissions. However, there
are also opportunities for C&C to leverage
under this scenario. We are trialling the use
of electric vehicles and investigating the use
of hydrogen vehicles within our car and truck
fleets in order to decarbonise our supply
chain and lower our exposure to carbon
taxes.
Under the RCP8.5 scenario C&C would
be primarily exposed to the risks of water
scarcity, flooding and changing crop yields,
all of which will impact our production.
Heatmap
123
4
5
6
7
Minor Moderate Significant Major Intolerable*
Remote Unlikely Possible Likely Highly Likely*
Transition risk
1. Climate Change Levy / Carbon Tax
Physical Risk
2. Effects on ingredient production
due to climate change
3. Water scarcity reduces availability
of water for production
6. Floods disrupt production and distribution
at Clonmel facility
7. Disruption to supply chain & distribution
network due to extreme weather
Opportunity
4. Invest in low carbon intensity supply
chains and distribution networks
5. Sustainable trends in consumer demand
*As defined in our Group Risk Register.
TCFD Disclosure
(continued)
48 C&C Group plc Annual Report 2022
The effects of the temperature scenarios on the shortlisted CROs and their impact, as well as C&C’s mitigation of these impacts, is
summarised in the following table:
TCFD CRO Category Scenario Time Horizon
Value Chain Impact and
divisional impact
Description of Impact prior to any mitigating
activities being considered Management of risks and opportunities
1. Climate Change Levy / Carbon Tax
Transition risk
- policy & legal
Transition risk
- technology
RCP2.6 Short term Upstream,
Production &
distribution
Branded
Wholesale
The Group’s primary production
sites are located in geographical
locations either with a Carbon
Tax (Ireland) or Carbon Levy
(UK). These costs are due to
increase substantially between
now and 2030. Moreover,
the increased pricing of GHG
emissions means that the
Group’s operational costs will
increase (e.g. heating).
The Group will reduce our
carbon emissions in line with
our SBTi target.
The Group will explore avenues
to invest in low carbon intensity
supply chains and in cleaner
technologies.
The Group will explore
implementing a shadow
carbon price in order to assess
potential future financial impacts
that could arise from proposed
increases in carbon pricing.
2. Effects on ingredient production due to climate change
Physical risk -
chronic
RCP8.5 Long term Raw materials
Branded
Wholesale
Changes in precipitation
patterns and extreme variability
in weather patterns will
adversely affect barley, maize,
wheat, malt, apple and apple
juice, and wine production
therefore affecting the Group’s
supply chain and production
capabilities.
The Group will assess the
climate related risk to each
ingredient on an individual
basis. The results will be
incorporated into our supply
chain strategy.
3. Water scarcity reduces availability of water for production
Physical risk -
chronic
Transition risk -
policy & legal
RCP8.5 Long term Raw materials &
Production
Branded
Wholesale
Potential for long-term changes
in ground water levels due
to reduced precipitation
may affect the availability
of water for production (the
Group uses water as both a
product ingredient and as a
plant cleaning medium) and
enhances regulatory controls
over seasonal water extraction
activities, disrupting the Group’s
production.
Each of the Group’s sites has
an active water management
programme. This includes an
ongoing assessment of the
water scarcity risk to each
production site.
The Group will engage with
our suppliers on their water
management policies and
establish if they have conducted
a risk assessment which covers
climate related water stress.
Corporate
Governance
Business
& Strategy
Financial
Statements
49
TCFD CRO Category Scenario Time Horizon
Value Chain Impact and
divisional impact
Description of Impact prior to any mitigating
activities being considered Management of risks and opportunities
6. Floods disrupt production and distribution at Clonmel facility
Physical risk -
acute
RCP8.5 Long term Production &
Distribution
Branded
Increased heavy precipitation
leading to floods in Clonmel
facility. The occurrence of
flooding could also cause
damage to property and halt
production in these facilities,
impacting outputs and revenue.
As a significant employer
in Tipperary in Ireland, the
Group will work with the local
authorities to foresee and
mitigate any associated risk.
A flood risk assessment will
be conducted on the Clonmel
site in Tipperary based on a
RCP 8.5 scenario followed
by the development of a
flood management plan to
minimise any potential business
disruption.
7. Disruption to supply chain & distribution network due to extreme weather
Physical risk -
acute
RCP8.5 Long term Upstream,
Distribution
Branded
Wholesale
Distribution channels are
exposed to more extreme
weather events leading to
financial losses through lost
revenue due to our suppliers
being unable to deliver goods to
us or the Group being unable to
deliver goods to our customers.
The Group will work with
our partners in our recently
launched Supply Chain
engagement programme to
review risks and mitigations on
a longer term time horizon.
The Group will mitigate the
operational impact of extreme
weather events through
business continuity plans, which
will be tested regularly against
the latest IPCC scenarios.
The Group will mitigate the
financial impact of such events
through business interruption
insurance cover.
TCFD Disclosure
(continued)
50 C&C Group plc Annual Report 2022
TCFD CRO Category Scenario Time Horizon
Value Chain Impact and
divisional impact
Description of Impact prior to any mitigating
activities being considered Management of risks and opportunities
4. Invest in low carbon intensity supply chains and distribution networks
Transition
Opportunity
(Resource
Efficiency)
RCP2.6 Long term Distribution
Branded
Wholesale
Opportunity to mitigate
the increase in production,
transportation and distribution
cost due to the increase in
energy prices by transitioning to
lower carbon options. This could
allow the Group to lower costs
with respect to our competitors.
The Group will actively assess
low carbon distribution options
as the leading final mile delivery
partner to the on trade in the UK
and Ireland.
The Group will work with
our partners in our recently
launched Supply Chain
engagement programme to
help them lower their carbon
emissions.
5. Sustainable trends in consumer demand
Transition
Opportunity
(Resilience and
Market)
RCP2.6 Short term Sales &
consumers
Branded
Strong corporate climate
change management enhances
credibility and strengthens
relationships with stakeholders
leading to potential new revenue
opportunities. Additionally, given
that the Group’s production,
distribution and crop sites are
relatively close to each other,
this could have a positive
impact on carbon labelling
and reputation as consumers
increasingly look for locally
sourced, low carbon products.
The Group will continue to utilise
in-house consumer insight via
PROOF and external sources to
develop / execute meaningful
brand sustainability campaigns
(Life is Bigger than Beer –
Tennent’s and Save the Bees
– Bulmers).
Risk Management
C&C adopts a standard risk management
framework which is discussed in detail on
page 34. We have in the past considered
a wide range of risks and opportunities
relating to climate change and other
environmental factors that were evaluated by
senior operational managers and technical
specialists. These include, for example:
impacts relating to continuity and cost of
supply of raw materials, water, waste, energy
use and efficiency, packaging materials,
customer and consumer requirements,
regulation as well as brand and reputational
issues. However given the increasing focus
on climate, in FY2022 we completed a deep
dive on CROs as described in the strategy
section above. We have integrated the
results of this assessment into our overall
risk management system. Therefore, the
identification, prioritisation, assessment
and management of our ‘Sustainability
and Climate Change’ risk is completed in a
manner consistent with the Group’s other
principal risks with the exception of the
timeframe used (please refer to the Strategy
section of the TCFD report on page 47).
For additional information regarding the
climate-related risks identified and our
activities to mitigate these risks, please refer
to the Strategy section of the TCFD report
on page 47. Climate change mitigation is
a current and ongoing responsibility for
the Risk Committee for Sustainability and
Climate Change as highlighted as part of the
Governance section of this report on page
46.
Corporate
Governance
Business
& Strategy
Financial
Statements
51
To be able to better manage the projected
impacts of climate change, we are
committed to the continuous improvement
of our processes for identifying and
assessing our climate-related risks. We
also want to improve the bottom-up risk
assessment process and we will roll out
education and awareness training that
will be carried out an operational level to
enhance our risk identification processes.
Any changes to climate-regulation, or the
emergence of new climate-related regulation
is considered as part of our normal
regulation assessment for the Group.
Metrics & Targets
To oversee our progress against our Group’s
climate-related goals and targets we have
set a number of climate-related KPIs in line
with our sustainability strategy. These KPIs
have been selected in order to monitor our
progress against our targets and to help us
manage the identified CROs. The metrics
adopted are monitored using a financial
control boundary, and were developed in
alignment with international environmental
frameworks, namely CDP and SBTI, as well
as with guidance provided by GHG Protocol.
The Board recognises the importance of
ensuring that we monitor our performance
with respect to the CROs identified with
tailored KPIs. Currently, through the
measurement of Scope 1, Scope 2 and
Scope 3 emissions along with its SBTi
commitment, the Group is able to manage
CRO 1, Climate Change Levy / Carbon Tax.
Additionally, through the monitoring of water
usage in C&C’s facilities, the Group is able
to manage CRO 3 - Water scarcity reduces
availability of water for production - even
though there is additional work to be done
around the metrics to monitor suppliers
in this area. The Group also measures
performance and historical progress
with respect to waste management (for
more information, see page 70 in the
Responsibility Report). We recognise that
further work on metrics and targets aligning
to the remaining CROs is required and are
committed to working on this during the
next financial year.
Areas of focus for FY2023
In FY2023 the Group will carry out a
quantitative scenario analysis to support
the formal embedding of CROs within our
strategic planning. Moreover, it will allow the
Group to further assess the financial impact
of climate-related risks and opportunities on
our business.
As we mature in our understanding of C&C’s
climate-related issues and the impact on our
business, we will also continue to reassess
the short list as risks and opportunities
evolve. We will integrate additional metrics
and targets to support us in mitigating
and managing the identified risks and
opportunities.
TCFD Index
Disclosure Requirement
TCFD
disclosure met
Page
Reference Actions Undertaken Next Steps
Governance
(a) Describe the board’s oversight of climate-
related risks and opportunities.
Yes Page
46
• A Risk & Compliance
Committee was established
in order to monitor and
manage Sustainability
and Climate Change as a
principal risk.
• The Board received initial
training on climate change
and TCFD reporting.
• Carry out further training on
ESG and climate change as
well as the associated risks
and opportunities.
• Develop additional reporting
lines which will see the Risk
Committee for Sustainability
and Climate Change reporting
also to the ESG Committee.
(b) Describe management’s role in
assessing and managing climate-related
risks and opportunities.
Yes Pages
46 - 47
TCFD Disclosure
(continued)
52 C&C Group plc Annual Report 2022
Disclosure Requirement
TCFD
disclosure met
Page
Reference Actions Undertaken Next Steps
Strategy
(a) Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
Yes Pages
49 - 51
• Identified climate risks and
opportunities that could
have a material impact on
C&C.
• Conducted a detailed
qualitative climate change
risk assessment and
scenario analysis with
the support of an expert
external party.
• Continue to monitor the risks
that we have identified and
consider emerging CROs as
new climate data and policies
emerge.
• Actively monitor the changing
landscape of sustainability
reporting requirements.
• Carry out a quantitative
scenario analysis to assess
the financial impact of
climate-related risks and
opportunities on C&C and
integrate climate change
within C&C’s strategy and
financial planning.
(b) Describe the impact of climate-related
risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
No -
(c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower scenario.
Partially Pages
47 - 48
Risk Management
(a) Describe the organisation’s processes
for identifying and assessing climate-related
risks.
Yes Page
51
• Further integrated climate-
related risks within C&C’s
overall risk management
process.
• C&C will further develop the
bottom-up risk assessment
process relevant to CROs.
• Roll out education and
awareness training that will
be carried out an operational
level to enhance the Group’s
risk identification processes.
(b) Describe the organisation’s processes for
managing climate-related risks.
Yes Pages
46 and
51
(c) Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organisation’s
overall risk management.
Yes Page
51
Metrics & Targets
(a) Disclose the metrics used by the
organisation to assess climate-related risks
and opportunities in line with its strategy
and risk management process.
Partially Page
47 and
52
• Set carbon reduction targets
in line with SBTi.
• Assessed our current
metrics in relation to the
identified CROs.
• Evaluate and develop, where
applicable, additional metrics
and targets to support us
in managing the identified
climate-related risks and
opportunities.
• Achieve our SBTi objectives.
(b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
Yes Page
66
(c) Describe the targets used by the
organisation to manage climate related risks
and opportunities and performance against
targets.
Partially Page
47 and
52
Corporate
Governance
Business
& Strategy
Financial
Statements
53
“ The Group’s performance
in FY2022 continued to
be significantly impacted
by COVID-19 and the
associated on-trade
restrictions in our core
markets.”
Patrick McMahon
Group Chief
Financial Officer
profitability and underlying cash generation.
However, renewed Government restrictions
on the hospitality industry in the second
half of the year, particularly across the
key Christmas trading period adversely
impacted performance. With the lifting
once again of restrictions towards the latter
stages of FY2022, the Group’s on-trade
performance improved yet again, providing
a platform for a clean start to FY2023.
Cost inflation pressures and concerns
associated with the potential consequences
of the ongoing conflict in Ukraine have
grown over recent months. In response to
this challenging and evolving inflationary
backdrop and uncertain macro environment,
in November 2021 the Group implemented
a series of price increases which, alongside
our previously announced cost reduction
programme and cost hedge positions afford
us a degree of cost protection as we enter
into FY2023.
The Group’s performance in FY2022
continued to be significantly impacted by
COVID-19 and the associated on-trade
restrictions in our core markets. As a direct
result, and on a constant currency basis
(iv)
,
net revenue for the Group of €1,438.1m
increased by 87.8%.
Bulmers and Tennent’s continued to build
on market share gains, our distribution
businesses returned to profitability and
we successfully executed our previously
announced cost reduction programme.
The continued, intermittent lockdowns and
restrictions in the on-trade resulted in the
Group reporting an operating profit for the
year of €47.9m
(i)
, up from a loss of €63.6m
in the prior year
(i)(iv)
and €74.8m
(i)
below the
Group FY2020 outcome (on a constant
currency basis). Adjusted diluted EPS for
FY2022 is 7.5 cent.
Liquidity and net debt reduction have been a
key focus for the Group throughout FY2022.
The Group completed a successful Rights
Issue in June 2021 issuing 81,287,315 New
Results For The Year
Once again, COVID-19 and its related restrictions have posed
significant challenges to the drinks and hospitality sector, effecting
all of the Group’s stakeholders and materially impacting our results
for the year ended 28 February 2022. Despite significant challenges
the Group returned to profitability for the year.
C&C is reporting net revenue of €1,438.1m, operating profit
(i)
of
€47.9m, liquidity
(ii)
of €438.7m and net debt
(iii)
including leases,
of €271.3m. Net debt
(iii)
excluding IFRS 16 Leases was €191.3m.
Following the easing of on-trade restrictions in the first half of
FY2022, trading was ahead of plan with the Group returning to
Group Chief Financial Officer’s Review
54 C&C Group plc Annual Report 2022
Ordinary Shares at 186 pence per New
Ordinary Share, raising gross proceeds of
£151.2m (€176.3m). As a result of this, the
Group reduced leverage with a significant
reduction in net debt, improving the Group’s
overall liquidity position and providing the
Group with the capital structure to both
support the business during further potential
disruptions from COVID-19 and to deliver on
its strategy. The Group maintains a robust
liquidity position with available liquidity of
€438.7m at 28 February 2022 and at year
end achieved Net Debt/ EBITDA of 3.4x. Our
target Net Debt/ EBITDA level is less than
2x.
The potential impact on the Group’s
profitability from the challenging inflationary
cost environment and concerns associated
with the potential consequences of the
ongoing conflict in Ukraine is a key focus
as the Group enters FY2023. This risk
has been somewhat mitigated to date
by a successfully executed €18.0m cost
reduction plan, recent price increases and
input cost hedging but we remain very
vigilant of the risk this level of cost inflation
poses to our cost base and more generally
consumer confidence and spending as we
progress into FY2023.
Accounting Policies
As required by European Union (‘EU’) law,
the Group’s financial statements have been
prepared in accordance with International
Financial Reporting Standards (IFRS) as
adopted by the EU, and as applied in
accordance with the Companies Act 2014,
applicable Irish law and the Listing Rules of
the UK Listing Authority. Details of the basis
of preparation and the accounting policies
are outlined on pages 154 to 170.
Finance Costs, Income Tax and
Shareholder Returns
Net finance costs before exceptional items
of €16.1m were incurred in the financial year
(FY2021: €19.5m), with €7.4m being incurred
post the receipt of Rights Issue gross cash
proceeds of £151m (€176m). The Group
successfully negotiated financial covenant
waivers as a consequence of the impact
of COVID-19 with its lenders. Exceptional
finance costs of €6.7m were incurred directly
associated with these waivers including
waiver fees, increased margins payable and
other professional fees associated with the
covenant waivers.
In FY2022, the UK trading group increased
its contribution to overall Group profits.
Expectedly, this impacts the Group’s
effective tax rate for FY2022 of 18.8%, as
UK generated profits are taxed a rate of 19%
as compared to that of 12.5% in Ireland.
Further pressure on the Group’s effective
tax rate is to be expected with the increase
of the UK’s corporate tax rate to 25% from 1
April 2023 and the expected implementation
of a 15% corporate tax rate in Ireland (for
large multi-national corporations) towards
the end of FY2023. The Group continues to
manage its effective tax rate in line with its
published tax strategy.
Due to COVID-19 and the impact this had
on global economies and on business
generally, the Board concluded it was not
appropriate to pay an interim dividend or
a final dividend for FY2022. In the prior
financial year, due to the emergence of
COVID-19, no interim or final dividend was
paid, a payment of €0.4m was made to
recipients of dividend accruing share-based
payment awards and a credit of €0.2m was
recognised in the Income Statement as a
consequence of dividend accruing share-
based payment awards now deemed to be
not capable of achieving their performance
conditions, and hence both the share-based
payment award and related dividend accrual
were deemed to have lapsed.
Due to COVID-19 and
the impact this had
on global economies
and on business
generally, the Board
concluded it was not
appropriate to pay
an interim dividend
or a final dividend for
FY2022.
Corporate
Governance
Business
& Strategy
Financial
Statements
55
Income Statement and a gain of €2.5m
accounted for within Other Comprehensive
Income.
Rights Issue costs
The Group completed a successful Rights
Issue in June 2021 issuing 81,287,315 New
Ordinary Shares at 186 pence per New
Ordinary Share, raising gross proceeds of
£151.2m (€176.3m). Attributable costs of
€9.2m were incurred, of which €6.6m was
debited directly to Equity and €2.6m was
recorded as an exceptional charge in the
Group’s Condensed Consolidated Income
Statement.
Profit on disposal
During the current financial year, as outlined in
further detail in note 10, the Group completed
the sale of its wholly owned US subsidiary,
Vermont Hard Cider Company to Northeast
Kingdom Drinks Group, LLC on the 2 April
2021 for a total consideration of €17.5m
(USD 20.5m) (comprised of cash proceeds of
€13.4m (€12.9m net cash impact on disposal)
and promissory notes of €4.1m at the date
of transaction), realising a profit of €4.5m on
disposal.
Finance income
The Group earned finance income of €0.2m
relating to promissory notes issued as part
of the disposal of the Group’s subsidiary
Vermont Hard Cider Company.
Finance expense
As outlined previously, during the current
financial year, the Group successfully
negotiated covenant waivers due to the
impact of COVID-19 with its lenders. Costs
of €6.7m were incurred in the year directly
associated with these waivers including
waiver fees, increased margins payable
and other professional fees associated with
covenant waivers.
Equity accounted investments’
exceptional items
On 17 May 2022, the Group announced the
sale of its joint venture investment in Admiral
Taverns, to Proprium Capital Partners for a
total consideration of €65.8m (£55.0m). The
sale of the shares will be completed and the
consideration will be paid in three tranches
during FY2023, subject only to FCA
approval. Admiral Taverns was classified
as an asset held for sale as at 24 February
2022.
The net impact of exceptional items in
relation to Admiral is a charge of €3.7m.
The Group continued to equity account for
this investment up until this date, with the
Group recognising a credit of €2.7m with
respect to its share of Admiral Taverns’
exceptional items. This included a credit
of €4.1m with respect to the Group’s share
of the revaluation gain arising from the fair
value exercise to value Admiral’s property
assets. The Group also recognised an
exceptional charge of €1.4m in relation
to its share of other exceptional items for
the year, including the Group’s share of
acquisition costs of €1.4m incurred with
respect to Admiral Taverns’ acquisition of
Hawthorn. The Group also recognised its
share of other exceptional items for the year
of €0.5m, primarily relating to restructuring
costs. This was offset by a release from the
expected loss provision with respect to the
recoverability of Admiral Taverns’ debtor
book as a consequence of COVID-19 of
€0.5m.
As a result of the same property valuation
exercise, a gain of €2.2m with respect
to the Group’s share of the revaluation
was recognised in Other Comprehensive
Income.
Also in the current financial year, the Group
assessed the carrying value of its equity
accounted investment as a result of its
classification as an asset held for sale
as at 24 February 2022 and recognised
an impairment charge of €6.4m. This
impairment charge reverses previously
accumulated gains and losses in relation to
the application of equity accounting for the
Admiral Taverns investment, to reflect the
recoverable value of the Group’s investment
in line with the agreed consideration of
€65.8m (£55.0m).
Group Chief Financial Officer’s Review
(continued)
Exceptional items
Total exceptional items, before the impact of
taxation, of a €11.3m credit were incurred in
the current financial year.
COVID-19
The Group has continued to account
for the ongoing COVID-19 pandemic as
an exceptional item and has incurred an
exceptional credit of €17.5m from operating
activities at 28 February 2022. The Group
reviewed the recoverability of its debtor
book and advances to customers and
booked a credit of €7.9m with respect to
its provision against trade debtors and a
credit of €5.5m with respect to its provision
for advances to customers. The Group also
realised an exceptional credit of €4.1m with
respect to inventory, this related to inventory
that had previously been assessed as
unsaleable before becoming obsolete, all as
a consequence of the COVID-19 restrictions.
Restructuring costs
A credit of €1.2m relating to restructuring
costs was incurred in the current financial
year. This included severance costs of
€0.6m which arose as a consequence of the
optimisation of the delivery networks project
in England and Scotland. In addition, the
Group realised a credit of €1.8m in relation
to the profit on disposal of a property as
a direct consequence of the optimisation
project.
Impairment of property, plant &
equipment
Property (comprising freehold land &
buildings) and plant & machinery are valued
at fair value on the Consolidated Balance
Sheet and reviewed for impairment on an
annual basis. During the current financial
year, as outlined in detail in note 11, the
Group engaged external valuers to value
the freehold land & buildings and plant
& machinery at the Group’s Clonmel
(Tipperary), Wellpark (Glasgow) and Portugal
sites. Using the valuation methodologies,
this resulted in a net revaluation gain of
€0.6m accounted for in the Consolidated
56 C&C Group plc Annual Report 2022
Other
During the current financial year, €0.3m
was released against a provision for legal
disputes.
Balance Sheet Strength and Debt
Management
Balance sheet strength provides the Group
with the financial flexibility to pursue its
strategic objectives. It is our policy to ensure
that a medium/long-term debt funding
structure is in place to provide us with the
financial capacity to promote the future
development of the business and to achieve
its strategic objectives.To ensure the
business was equipped with the optimum
capital structure and financing to emerge
from the COVID-19 pandemic in a position
of strength, the Group announced a Rights
Issue on the 26
May 2021. The Group
successfully completed the Rights Issue
in June 2021 raising gross cash proceeds
of £151.2m (€176.3m). As a result of this,
the Group reduced leverage, improving
the Group’s overall liquidity position and
providing the Group with the capital
structure to both support the business
during further potential disruptions from
COVID-19 and to deliver on its strategy.
The Group manages its borrowing
requirements by entering into committed
loan facility agreements. In July 2018, the
Group amended and updated its committed
€450m multi-currency five year syndicated
revolving loan facility and executed a
three-year Euro term loan. Both the multi-
currency facility and the Euro term loan
were negotiated with eight banks, namely
ABN Amro Bank, Allied Irish Bank, Bank
of Ireland, Bank of Scotland, Barclays
Bank, HSBC, Rabobank and Ulster Bank.
In FY2020 the Group availed of an option
within the Group’s multi-currency revolving
loan facility agreement to extend the tenure
for a further 364 days from termination
date. The multi-currency facility agreement
is therefore now repayable in a single
instalment on 11 July 2024. During the prior
financial year, the Group renegotiated an
extension of the repayment schedule of the
Euro term loan with its lenders and the last
instalment is now payable on 12 July 2022.
In March 2020, the Group completed the
successful issue of new USPP notes. The
unsecured notes, denominated in both Euro
and Sterling, have maturities of 10 and 12
years and diversify the Group’s sources of
debt finance. The Group’s Euro term loan
included a mandatory prepayment clause
from the issuance of any Debt Capital
Market instruments however a waiver of the
prepayment was successfully negotiated
in addition to a waiver of a July 2020
repayment, as a consequence of COVID-19,
which now becomes payable with the last
instalment in July 2022.
As outlined previously, as a direct
consequence of the impact of COVID-19,
the Group successfully negotiated waivers
on its debt covenants from its lending group
for FY2021, and these have been extended
up to, but not including, the August 2022
test date.
As part of the agreement reached to waive
the debt covenants, a minimum liquidity
requirement and a gross debt restriction
have been put in place. The minimum
liquidity requirement and gross debt
restriction will remain in place until the Group
is able to show compliance with its original
debt covenant levels at the 28 February
2023 or any subsequent test date or
earlier if compliance can be demonstrated
and with respect to the minimum liquidity
requirement, the Group must maintain
liquidity of at least €150.0m each month.A
monthly gross debt cap of €700.0m in the
current financial year applied which will
continue during FY2022.
The Group complied with these new
minimum liquidity and gross debt
requirements during the financial year.
The Group maintains a £200m committed
receivables purchase facility, renewable
annually in May. As at 28 February 2022,
€84.1m of this facility was drawn (FY2021:
€45.0m, FY2020: €131.4m).
Cash generation
Summary cash flow for the year ended 28
February 2022 is set out in the table below.
Overall liquidity remains robust. The increase
in the Group’s receivables purchase
programme, as a direct consequence of
increased trading was partly offset by the
Group’s repayment of previously deferred
tax payments to the UK and Irish Tax
Authorities in accordance with our agreed
repayment schedules of €64.3m and an
investment in stock in Q4 FY2022. The
contribution to year end Group cash from
the receivables purchase programme was
€84.1m compared to €45.0m (€46.3m on a
constant currency basis
(iv)
) at 28 February
2021 - a cash inflow of €37.8m
(iv)
. In FY2022
€64.3m of previously deferred tax payments
were repaid and €28.8m will be repaid in
FY2023.
Capital expenditure in FY2022 amounted to
€14.9m, with almost 50% relating directly to
ESG initiatives and investments, namely the
completion of our Out of Plastics projects
for owned alcohol brands in Wellpark and
Clonmel and an investment in Ireland’s
largest rooftop solar panel installation in
Clonmel which will provide 10% of the site’s
electricity requirement.
Corporate
Governance
Business
& Strategy
Financial
Statements
57
Table 1 – Reconciliation of Adjusted EBITDA
(v)
to Operating profit/(loss)
2022 2021
€m €m
Operating profit/(loss) 58.5 (84.8)
Exceptional items (10.6) 25.2
Operating profit/(loss) before exceptional items 47. 9 (59.6)
Amortisation and depreciation charge 31.8 30.8
Adjusted EBITDA
(v)
79.7 (28.8)
Table 2 – Cash flow summary
2022 2021
€m €m
Adjusted EBITDA
(v)
79.7 (28.8)
Working capital (19.2) (44.7)
Advances to customers 2.3 1.2
Net finance costs excluding exceptional finance costs (16.7) (18.0)
Tax (paid)/refunded (3.2) 7. 2
Pension contributions paid (0.4) (0.4)
Tangible/intangible expenditure (17.1) (10.0)
Net proceeds on disposal of property plant & equipment 2.3 1.0
Exceptional items paid (12.5) (12.4)
Other* 3.0 1.3
Free cash flow
(vi)
18.2 (103.6)
Free cash flow
(vi)
18.2 (103.6)
Net exceptional cash outflow 10.2 12.4
Free cash flow
(vi)
excluding net exceptional cash outflow 28.4 (91.2)
Reconciliation to Group Cash Flow Statement
Free cash flow
(vi)
18.2 (103.6)
Net proceeds from exercise of share options/equity interests 0.7 0.3
Drawdown of debt 49.5 570.9
Repayment of debt (271.7) (464.0)
Payment of lease liabilities (21.9) (19.0)
Proceeds from Rights Issue 176.3 -
Payment of issue costs - (1.4)
Payment of Rights Issue costs (9.2) -
Disposal of subsidiary/equity investment 12.9 6.7
Cash outflow re acquisition of equity accounted investments/financial assets (0.3) (6.9)
Dividends paid - (0.4)
Net decrease in cash (45.5) (17.4)
* Other relates to the add back of share options, pension contributions: adjustments from charge to payment and the add back of intangible asset impairment.
Group Chief Financial Officer’s Review
(continued)
58 C&C Group plc Annual Report 2022
Retirement Benefits
In compliance with IFRS, the net assets and
actuarial liabilities of the various defined
benefit pension schemes operated by the
Group companies, computed in accordance
with IAS 19 Employee Benefits, are included
on the face of the Consolidated Balance
Sheet as retirement benefits.
Independent actuarial valuations of the
defined benefit pension schemes are
carried out on a triennial basis using the
attained age method. An actuarial valuation
process is currently ongoing. The most
recently completed actuarial valuations of
the ROI defined benefit pension schemes
were carried out with an effective date of
1 January 2021 while the date of the most
recent actuarial valuation of the NI defined
benefit pension scheme was 31 December
2020.As a result of these updated valuations
the Group has committed to contributions
of 27.5% of pensionable salaries for the
Group’s staff defined benefit scheme. There
is no funding requirement with respect
to the Group’s executive defined benefit
pension scheme or the Group’s NI defined
benefit pension scheme, both of which are
in surplus. The Group has an unconditional
right to these surpluses when the scheme
concludes.
There are 2 active members in the NI
scheme and 51 active members (less than
10% of total membership) in the ROI staff
defined benefit pension scheme and no
active members in the executive defined
benefit pension scheme.
At 28 February 2022, the retirement
benefits computed in accordance with IAS
19 Employee Benefits amounted to a net
surplus of €37.6m gross of deferred tax
(€20.0m surplus with respect to the Group’s
staff defined benefit pension scheme,
€11.1m surplus with respect to the Group’s
executive defined benefit pension scheme
and a €6.5m surplus with respect to the
Group’s NI defined benefit pension scheme)
and a net surplus of €31.5m net of deferred
tax.
The key factors influencing the change in valuation of the Group’s defined benefit pension
scheme obligations gross of deferred tax are as outlined below:
€m
Net surplusat 1 March 2021 4.9
Translation adjustment 0.2
Employer contributions paid 0.4
Credit to Other Comprehensive Income 32.8
Charge to Income Statement (0.7)
Net surplus at 28 February 2022 37.6
Currency transaction exposures primarily
arise on the Sterling, US, Canadian and
Australian Dollar denominated sales of our
Euro subsidiaries and Euro purchases in
the Group’s Great Britain (GB) business.
We seek to minimise this exposure, when
possible, by offsetting the foreign currency
input costs against the same foreign
currency receipts, creating a natural
hedge. When the remaining net currency
exposure is material, the Group enters
into foreign currency forward contracts
to mitigate and protect against adverse
movements in currency risk and remove
uncertainty over the foreign currency
equivalent cash flows. Forward foreign
currency contracts are used to manage
this risk in a non-speculative manner when
the Group’s net exposure exceeds certain
limits as set out in the Group’s treasury
policy. In the current financial year, the
Group had €22.2m forward foreign
currency cash flow hedges outstanding.
The average rate for the translation of
results from Sterling currency operations
was €1:£0.8524 (year ended 28 February
2021: €1:£0.8959) and from US Dollar
operations was €1:$1.1701 (year ended 28
February 2021: €1:$1.1602).
The increase in the surplus from €4.9m at
28 February 2021 to a surplus of €37.6m
at 28 February 2022 is primarily due to an
actuarial gain of €32.8m over the year. The
actuarial gain was driven by the increase
in the discount rates used to value the
pension benefit obligation. The impact of
the increase in discount rates was partially
offset by the increase in the inflation-related
assumptions.
Financial Risk Management
The main financial market risks facing the
Group continue to include commodity price
fluctuations, foreign currency exchange rate
risk, interest rate risk, creditworthiness in
relation to its counterparties and liquidity
risk.
The Board of Directors set the treasury
policies and objectives of the Group, the
implementation of which are monitored by
the Audit Committee. Details of both the
policies and control procedures adopted to
manage these financial risks are set out in
detail in note 24 to the consolidated financial
statements.
Currency Risk Management
The reporting currency and the currency
used for all planning and budgetary
purposes is Euro. However, as the
Group transacts in foreign currencies
and consolidates the results of non-Euro
reporting foreign operations, it is exposed
to both transaction and translation currency
risk.
Corporate
Governance
Business
& Strategy
Financial
Statements
59
Comparisons for revenue, net revenue and
operating profit before exceptional items
for each of the Group’s reporting segments
are shown at constant exchange rates for
transactions by subsidiary undertakings
in currencies other than their functional
currency and for translation in relation to the
Group’s Sterling and US Dollar denominated
subsidiaries by restating the prior year at
current year average rates.
Segmental reporting
In September 2021, the Group announced
to the market as part of its ‘One C&C’ target
that it would be combining all of the Great
Britain (‘GB and RoW’) trading businesses
with immediate effect aligning management
structures and beginning a significant
change programme of simplification and
integration. This led to our previously
reported GB, Matthew Clark Bibendum and
International businesses being absorbed
under one management team led by one
Managing Director. The Ireland business
remains unchanged. Considering the
changes in the operational management
and organisational structure, the Group has
aligned its reporting segments with how
the business is now managed. Furthermore
and to aid more useful analysis of the
Group’s business performance, the Group
has introduced Branded, Distribution and
Co-pack/Other secondary analysis to its
reporting this year.
Applying the realised FY2022 foreign currency rates to the reported FY2021 revenue, net
revenue and operating loss
(i)
are shown in the table below:
Table 3 – Constant currency comparatives
Year ended
28 February 2021 FX transaction FX translation
Year ended
28 February 2021
€m €m €m €m
Revenue
Ireland 269.8 - 1.9 271.7
Branded 94.2 - 0.7 94.9
Distribution 167.2 - 1.2 168.4
Co-pack/Other 8.4 - - 8.4
Great Britain 753.0 - 36.8 789.8
Branded 230.8 - 10.5 241.3
Distribution 476.2 - 24.2 500.4
Co-pack/Other 46.0 - 2.1 4 8.1
Total 1,022.8 - 38.7 1,061.5
Net revenue
Ireland 16 6.1 - 1.3 16 7.4
Branded 48.6 - 0.3 48.9
Distribution 114.0 - 1.0 115.0
Co-pack/Other 3.5 - - 3.5
Great Britain 570.8 - 27. 6 598.4
Branded 133.4 - 5.6 139.0
Distribution 394.2 - 20.0 414.2
Co-pack/Other 43.2 - 2.0 45.2
Total 736.9 - 28.9 765.8
Operating loss
(i)
Ireland (4.9) (1.7) (0.1) (6.7)
Branded (3.9) (0 .1) ( 0.1) (4.1)
Distribution (1.0) (1.6) - (2.6)
Great Britain (54.7) 0.6 (2.8) (56.9)
Branded (10.0) ( 0.1) (0.3) (10.4)
Distribution (44.7) 0.7 (2.5) (46.5)
Total (59.6) (1.1) (2.9) (63.6)
Notes to the Group Chief Financial Officer’s Review
(i) Before exceptional items.
(ii) Liquidity is defined as cash plus undrawn amounts under the Group’s revolving credit facility.
(iii) Net debt comprises borrowings (net of issue costs) less cash plus lease liabilities capitalised under IFRS 16 Leases.
(iv) FY2021 comparative adjusted for constant currency (FY2021 translated at FY2022 F/X rates).
(v) Adjusted EBITDA is earnings/(loss) before exceptional items, finance income, finance expense, tax, depreciation,
amortisation charges and equity accounted investments’ profit/(loss) after tax. A reconciliation of the Group’s
operating profit/(loss) to EBITDA is set out on page 58.
(vi) Free Cash Flow (‘FCF’) that comprises cash flow from operating activities net of capital investment cash outflows
which form part of investing activities. FCF highlights the underlying cash generating performance of the ongoing
business. FCF benefits from the Group’s purchase receivables programme which contributed €84.1m (FY2021:
€45.0m reported/€46.3m on a constant currency basis) inflow in the year. A reconciliation of FCF to net movement
in cash per the Group’s Cash Flow Statement is set out above.
60 C&C Group plc Annual Report 2022
Group Chief Financial Officer’s Review
(continued)
Commodity Price and Other Risk
Management
The Group is exposed to commodity price
fluctuations, and manages this risk, where
economically viable, by entering into fixed
price supply contracts with suppliers. We
do not directly enter into commodity hedge
contracts. The cost of production is also
sensitive to variability in the price of energy,
primarily gas and electricity. Our policy is
to fix the cost of a certain level of energy
requirement through fixed price contractual
arrangements directly with our energy
suppliers. Evolving cost inflation pressures
and concerns associated with the potential
consequences of the ongoing conflict in
Ukraine have grown over recent months,
heightening the risk around cost and to
some extent continuity of supply of raw
materials and ingredients.
The Group seeks to mitigate risks in relation
to the continuity of supply of key raw
materials and ingredients by developing
trade relationships with key suppliers. We
have long-term apple supply contracts with
farmers in the west of England and have an
agreement with malt farmers in Scotland for
the supply of barley.
In addition, the Group enters into insurance
arrangements to cover certain insurable
risks where external insurance is considered
by management to be an economic means
of mitigating these risks.
Cyber Incident
On 19 April 2021, the Group announced that
it had experienced a cyber security incident
within its Matthew Clark Bibendum (MCB)
operations. In response, certain IT systems
and applications used in those business
units were pro-actively shut down and
were securely restored over the course of a
number of weeks. By the end of May 2021,
MCB was again using their IT systems and
applications. The cyber security incident
affected MCB only, with other Group
business and production sites unaffected
throughout the period.
The Group incurred €2.6m of costs in
FY2022 as a direct result of the cyber
security incident in April. These costs
primarily related to specialist advisory fees
incurred to investigate and respond to the
incident and subsequent improvements
and additional protection tools to enhance
the security of the IT systems. Following
the incident affecting Matthew Clark
and Bibendum IT systems in April 2021,
the Group has reviewed its information
security and cyber preparedness policies
and procedures, enhanced its Information
Technology systems and controls, including
the appointment of a Technology and
Transformation Director and Group Head
of IT. As a demonstration of the Group’s
commitment to tackling cyber security,
it is currently pursuing Cyber Essentials
Plus accreditation from the National Cyber
Security Centre (NCSC).
Patrick McMahon
Group Chief Financial Officer
Corporate
Governance
Business
& Strategy
Financial
Statements
61
Responsibility Report
At C&C, our Environmental, Social and
Governance (ESG) strategy is directed by
our Group purpose of “We deliver joy to
customers with remarkable brands and
service” and our 3 values of “Respect
people and the planet”, “We bring Joy to
life” and “Quality is at our core”.
Our Board level Environmental, Social and Governance
Committee and our dedicated ESG team, seek to
champion and embed ESG in everything that we do at
C&C.
While delivering joy to customers, we always shine
a light on people and the planet. A structured and
ambitious programme of continuous improvement will
ensure we meet our ESG vision of “Delivering to a better
world!”
Our six ESG pillars ensure that we focus on the most
material areas to guide our actions around sustainability
and support the UN Sustainable Development Goals.
Environmental
We strive to minimise our impact on
the environment and the communities
in which we operate.
1. Reduce our
Carbon Footprint
• Optimising our manufacturing facilities
• Streamlining our logistics operations
• Increasing the recycling rate for our brands / improve
sustainable packaging
• Waste reduction
• Piloting alternative fuel vehicles
2. Sustainably produce
and source products
& services
• Collaboration with our apple & barley growers
• Source water optimisation
• Water usage reduction
• Achieving the highest sourcing standards
62 C&C Group plc Annual Report 2022
Social
Our ethos is simple, our employees should
work in a safe and healthy workplace. As a
drinks business, we are also committed to
promoting responsible alcohol consumption.
Governance
We believe that working ethically, in line with
the Group’s corporate governance framework,
in an environment where individuality is
respected and celebrated, acting as a trusted
partner with all stakeholders, makes a tangible
difference to people and our planet.
5. Build a more Diverse,
Inclusive,
& Engaged C&C
• Diversification of Board
• Group wide D&I measurement
• Formal manager D&I training
• Employee engagement tracking
4. Enhance Health, Wellbeing &
Capability of colleagues
• Safety first
• Health & Wellbeing support systems
• Support remote/hybrid working
• Alcohol awareness training
• Embed key codes including Employee Code of Conduct,
Anti-Bribery and Corruption
• Learning and development programmes
6. Collaborate with
Government & NGOs
• Leading DRS implementation in Scotland
• MUP Ireland
• Portman and Drinkaware support
We continue to look to disclose all key non-financial indicators
and guidance in line with the Sustainability Accounting
Standards Board (‘SASB’) Framework.
3. Ensure
Alcohol is
consumed
responsibly
• Introducing 0% and low alcohol variants
• Reducing ABV & calories
• Active support for industry programmes including
Portman Group and Drinkaware
• Support relevant charities
63
Corporate
Governance
Business
& Strategy
Financial
Statements
Reduce our
Carbon Footprint
C&C Group plc have pledged to be a
carbon-neutral business by 2050 at the
latest. We have recently set our emissions
reduction targets which are grounded in
climate science and will be validated by the
Science Based Targets initiative (‘SBTi’).
We are committed to reducing our absolute
Scope 1 and Scope 2 GHG emissions by
35% and our Scope 3 GHG emissions by
25% by 2030 (versus FY2020).
We have used the data collected for CDP
reporting and selected 2020 as the base
year for a SBTi engagement target. 2020
was used as the base year due to the
impacts of COVID-19 on the business –
activity in 2021 was significantly affected by
lockdowns and other restrictions and would
not provide a credible base for normal levels
of activity.
Responsibility Report
In accordance with the FCA listing rules, our
Annual Report and Financial Statements
include climate-related financial disclosures
consistent with the recommendations of
the Task Force on Climate-related Financial
Disclosures (‘TCFD’).
This is the first year C&C has used the TCFD
framework to support our reporting and we
are committed to ensuring that we continue
to improve our climate-related disclosures
over the coming years. More details can be
found on pages 46 to 53.
Optimising our manufacturing
facilities.
Conservation of energy
With respect to energy targets, renewable
procurement is currently a priority for C&C.
In fact, from 1 April 2021, 100% of the
electricity across our main sites in the UK
and Ireland comes from renewable sources,
covering c.98% of our electricity use.
Environmental
The Group clearly identifies and manages
energy costs in each operating site and
country of operation, setting energy
reduction targets to help reduce our
exposure to future changes in energy costs.
In FY2022, we aligned to our Science Based
Target, setting a KPI to deliver a 4% year
on year reduction in our carbon related
energy use. C&C also benchmark our core
production processes against competitors
to understand our relative efficiency and
continue to invest significantly in technology
to reduce our overall energy consumption,
including the introduction of direct solar
power at our Clonmel Manufacturing facility.
In order to monitor our energy performance
and our progress with respect to this
goal, we utilise energy consumption,
energy intensity and renewable energy
consumption metrics.
Our Energy Consumption position is set out
below.
kWh FY2018-19 FY2019-20 FY2020-21 FY2021-22 Change YoY
Change V
FY2019-20
Natural Gas 80,579,000 88,630,000 83,199,000 89,904,000 8% 1%
LPG 1,979,000 2,332,000 3,556,000 3,949,000 11% 69%
LNG 6,107,000 5,591,000 5,007,000 - -100% -100%
Diesel 31,137,000 33,257,000 15,329,000 24,618,000 61% -26%
Petrol - 450,000 111,0 0 0 346,000 212% -23%
Kerosene/Fuel Oil 64,000 65,000 209,000 208,000 0% 220%
Wood 3,991,000 - - - 0%
Biogas (Out of Scope) 83,000 83,000 7,735,289 9,189,000 19% 10971%
Electricity 40,695,000 41,401,000 41,187,73 8 41,900,128 2% 1%
(Of which, renewables) 14,550,000 14,737,000 14,946,029 39,486,899 164% 168%
Total Scope 1 123,857,000 130,325,000 107,411,000 119,025,000 11% -9%
Total Scope 2 40,695,000 41,401,000 41,187,73 8 41,900,128 2% 1%
Total Scope 1 and 2 164,635,000 171,809,000 156,334,027 170,114,128 9% -1%
64 C&C Group plc Annual Report 2022
The Group has delivered a number of
initiatives in our ongoing efforts to reduce
energy use. These include:
• From 1 April 2021, 100% of the electricity,
used in Wellpark, Clonmel and across
our key UK depot network is provided by
renewable sources.
• Biogas energy: anaerobic digestion
technology at Wellpark Brewery and
Clonmel generated 1,119,477 cuM of
biogas / per annum.
• On 18 February 2022, Leo Varadkar,
Tánaiste and Minister for Enterprise, Trade
and Employment in Ireland, officially
opened C&C Group’s new Sustainability
Project at Clonmel Co. Tipperary. The
Project includes the installation of the
largest rooftop solar panel farm in
Ireland, which will reduce the Clonmel
site’s carbon emissions by 4%, saving
c.290 tonnes of CO
2
per year and almost
10,000 tonnes over the next 20 years. The
solar panels also provide up to 10% of
electricity used onsite.
Reducing carbon emissions
In FY2022, the Group commenced work
with the SBTi to set and have validated
science-based carbon reduction targets to
meet the goals of the Paris Agreement and
limit global warming to well below 2°C. A
near term validation is expected in FY2023.
From 1 April
2021, 100% of the
electricity, used in
Wellpark, Clonmel
and across our key
UK depot network
is provided by
renewable sources.
Corporate
Governance
Business
& Strategy
Financial
Statements
65
Responsibility Report
Environment
Scope 1 and Scope 2 emissions
The table below details C&C Scope
1 and Scope 2 emissions in FY2022
(versus FY2020), for both location and
market-based emissions. The purchase of
renewable energy has delivered the biggest
and most positive impact in FY2022. C&C
has commenced trials using an alternative
to diesel in our delivery fleet and changed
to ambient vaporisation of our carbon
dioxide in Wellpark. There were also
COVID related impacts with a change to
product mix, and delivery schedules as the
business reacted to the pandemic. We have
invested in FY2023 to deliver heat exchange
opportunities to reduce our carbon footprint.
The methodology and calculations for
Scope 1 and 2 are based on the GHG
Protocol.
Additional initiatives to drive emission
reductions include, further optimising our
biogas generation and carbon dioxide
capture at our Wellpark Brewery in Glasgow,
with our Clonmel plant already having this
technology in place. The ability to capture
carbon dioxide from our fermentation
process has positively reduced site carbon
dioxide emissions. In addition to the
environmental benefit, the carbon capture
capability at our main production sites, has
seen C&C become c95% self-sufficient in
CO
2
, which provides security of supply when
external availability of supply has repeatedly
been scarce in recent years. We maximise
use of recovered CO
2
and use collected
gas for product carbonation initially, and for
product storage cover gas to ensure the
correct product quality.
To give impetus to C&C’s de-carbonisation
efforts, the Group has set a target under
the LTIP awards granted in June 2021 to
reduce its Scope 1 emissions and Scope
2 emissions over the three financial years
ending with FY2024, in line with the Paris
Agreement. The incentive relates to delivery
of a 12% (4,500 tonnes) reduction in Scope
1 and 2 carbon emissions (versus FY2020).
Scope 1 Scope 2 Scope 1 & 2
Market Based Emissions (tCO
2
e)
38,092
32,279
26,865
24,196
FY 2019
24,404
13,688
FY 2020
26,216
6,063
FY 2022
23,402
794
FY 2021
20,908
5,957
FY20
8,5973,8234,774
FY19
9,2314,0355,196
CO
2
External Purchase(Te)
Manufacturing CO
2
Sourcing (tonnes)
CO
2
Recovered/Re-used(Te)
FY21
8,0474,6963,351
FY22
8,0097,268741
Scope 3
Our Scope 3 emissions (including supply
chain, customer use of our products,
and other indirect emissions) make up
around 95% of C&C’s total emissions. We
recognise our responsibility and the need to
collaborate with suppliers and customers to
tackle these emissions.
C&C has signed up to participate in the CDP
Supply Chain Screening Programme for
2021. This sees C&C work with 130 strategic
supply chain partners and request them to
disclose climate-related information to allow
us to use the reported data to measure
supplier environmental impacts and
collaborate with them to track progress of
sustainability goals and/or commitments. In
addition, we are encouraging our key supply
chain partners to publish and share their full
carbon footprint via CDP as C&C has done
for the last 12 years.
To support our Supply Chain Screening
approach, CDP delivered training to circa
50 C&C Procurement and Commercial
colleagues on how supply chain screening
and collaborating with suppliers and
customers can play a vital role in tackling
environmental harm and achieving global
climate goals.
66 C&C Group plc Annual Report 2022
Location-Based Emissions
Total C&C Total C&C Total C&C Total C&C Change Change V
FY2018-19* FY2019-20 FY2020-21 FY2021-22 YOY FY2019-20
Net Revenue (M Euro) 1,575 1,719 737 1,438 95% -16%
Production volume (Hectolitres) 4,388,761 4,396,981 3,803,970 4,039,648 6% -8%
Scope 1 (tCO
2
e) 24,404 26,216 20,908 23,402 12% -11%
Scope 2 (tCO
2
e) 13,688 12,768 10,681 10,255 -4% -20%
Total Scope 1 & 2 (tCO
2
e) 38,092 38,984 31,589 33,657 7% -14%
Scope 3 (tCO
2
e) 221,976 718,088 440,733 550,736 25% -23%
Total Footprint (tCO
2
e) 260,068 757,072 472,322 584,393 24% -23%
* Acquisition of Mathew Clark, and in-housing of Tennent’s distribution, with associated depots and transport fleet
Emissions Intensity
Total C&C Total C&C Total C&C Total C&C Change Change V
FY2018-19 FY2019-20 FY2020-21 FY2021-22 YOY FY2019-20
Scope 1 and 2 tCO
2
e per M EURO 24.19 22.68 42.86 23.41 -45% 3%
Scope 1 and 2 kgs CO
2
e per HL produced 8.68 8.87 8.30 8.33 0% -6%
Market-Based Emissions
Total C&C Total C&C Total C&C Total C&C Change Change V
FY2018-19 FY2019-20 FY2020-21 FY2021-22 YOY FY2019-20
Net Revenue (M Euro) 1,575 1,719 737 1,438 95% -16%
Production volume (Hectolitres) 4,388,761 4,396,981 3,803,970 4,039,648 6% -8%
Scope 1 (tCO
2
e) 24,404 26,216 20,908 23,402 12% -11%
Scope 2 (tCO
2
e) 13,688 6,063 5,957 794 -87% -87%
Total Scope 1 & 2 (tCO
2
e) 38,092 32,279 26,865 24,19 6 -10% -25%
Scope 3 (tCO
2
e) 221,976 718,088* 440,773 550,736 25% -23%
Total Footprint (tCO
2
e) 260,068 750,367 467,598 574,932 23% -23%
Emissions Intensity
Total C&C Total C&C Total C&C Total C&C Change Change V
FY2018-19 FY2019-20 FY2020-21 FY2021-22 YOY FY2019-20
Scope 1 and 2 tCO
2
e per M EURO 24.19 18.78 36.45 16.83 -54% -10%
Scope 1 and 2 kgs CO
2
e per HL produced 8.68 7. 3 4 7. 0 6 5.99 -15% -18%
Definitions:
Scope 1: Direct emissions from our own operations.
Scope 2: Indirect emissions from our purchased energy (mainly electricity).
Scope 3: Including supply chain, customer use of our products, and other indirect emissions.
*FY2019-20 now includes all scope 3 emissions in our reporting.
To achieve our target of reducing our Scope
3 emissions by 25% (Vs FY2020) by 2030,
we have also committed that suppliers and
customers making up 67% of our Scope 3
emissions, (Purchased Goods, Downstream
Transport and Use of Sold Goods), will have
science-based targets in place by 2026.
The Group will continuously engage with
suppliers and customers to support them
to set science-based targets for their own
emissions.
C&C Group has again received a B rating from
CDP on our latest Climate Change score.
Corporate
Governance
Business
& Strategy
Financial
Statements
67
Streamlining our Logistics
Operations
We recognise that our carbon footprint
extends beyond manufacturing and the
distribution and transport of our products
also contributes to the Group’s carbon
footprint. The Group has an “end to end”
supply chain model in the UK and Ireland,
with circa 360 vehicles in operation. Our
Group-wide logistics forum sees learnings
shared across C&C, allowing efficiencies to
be identified and captured across every stage
of the product journey to reduce delivery
miles and carbon footprint.
In FY2022, our KPI to reduce carbon
generated by logistics fleet by 250 tonnes
(5%) CO
2
e achieved a 200-tonne reduction.
We have completed the optimisation of our
English and Scottish delivery networks,
including the opening of our new depot at
Newbridge in Edinburgh. This exercise has
seen us consolidate volumes from three
separate networks into two, bringing all of
our final mile English distribution in-house,
reducing road miles and carbon emissions.
In our primary network, we track, measure,
consolidate and identify opportunities to
reduce vehicles movements across our
sites. We achieved these improvements
through profiling existing order patterns,
order quantity, frequency and minimum order
quantities. By engaging with retailers, we
will introduce revised schedules, resulting in
more consistent movements and logistics
performance.
The Group has also undertaken work with
suppliers to improve logistics performance
(e.g. creating minimum acceptable standards
for 3rd party hauliers in relation to engine
standards, emissions management, load
optimisation and investments in more efficient
vehicles - including current trials of electric
and LNG vehicles, and other alternatives
including biofuels).
We have invested in logistics and supply
chain improvements to reduce emissions,
including engagement with upstream material
suppliers and downstream logistics suppliers
to optimise routes and reduce miles over
which materials and finished goods travel.
Our Supply Chain Logistics and Procurement
teams continually work with suppliers to
identify opportunities to increase local
sourcing of materials, optimising packaging
materials, increasing percentage utilisation of
vehicles and cutting road miles.
Our Fleet
All new vehicles leased or purchased must
meet the EURO 6 standard and 93% of our
fleet are currently EURO 6. We amended
vehicle specification (by for example, applying
the Direct Vision Standard for heavy goods
vehicles which assesses and rates how much
the driver can see directly from their cab in
relation to other road users).
We have 34 solar-assisted trucks in our
delivery fleet. With solar panels on the roofs,
the trucks use solar energy to power all
on-board ancillary equipment, cutting fuel
consumption by 5%.
Driving efficiencies
We are eliminating the need for secondary
loads, by introducing direct delivery of
orders from manufacturing sites to customer
premises. We continue to increase the level
of direct deliveries from the Clonmel and
Wellpark sites.
Software including transport network, route
planning and on-road training for driver
habits have maximised fuel efficiency and
limited frequency of runs to distance areas
each week.
Increasing the Recyclable Rate
for our Brands and Improve
Sustainable Packaging
During FY2022, the Group met its ambitious
commitment to be out of single-use plastics
(shrink and hi and mid cone rings) in the
packaging of our canned products, reducing
the environmental impact and ecological
footprint of our products. All of our canned
product is now in fully recyclable cardboard,
removing more than 200 million plastic
rings per annum from the environment,
as part of an overall plastic reduction of
several hundred tonnes. The investment
also recognises the future market changes
Responsibility Report
Environment
68 C&C Group plc Annual Report 2022
including the Deposit Return Scheme
(‘DRS’) introduction in Scotland, planned for
August 2023 and in Ireland (date still to be
confirmed).
During COP26, Mairi McAllan, Scottish
Minister for Environment and Land
Reform, joined Shona Munro, Director of
Manufacturing at C&C Group, and Jo Green,
Chief Officer for Green Recovery at the
Scottish Environmental Protection Agency
(SEPA), for a tour of Wellpark Brewery to
mark Tennent’s achievement of removing
single-use plastic from packaging of our
canned products.
Leo Varadkar’s visit to Clonmel on 18th
February also marked Bulmers investment
into ‘dry end’ packaging machinery to
reduce the environmental impact and
ecological footprint of consumer packaging.
As of January 2022, plastic is no longer
used in the packaging of our canned
products at Clonmel.
Tennent’s is the only brewer who is a
member of the UK Plastics Pact, which has
additional targets on plastic packaging,
waste and recyclates.
Also, during COP26, Tennent’s Lager
committed to add a “Please Enjoy
Sustainably” message on all cans to
encourage recycling, reduce littering and
benefit the environment. While recycling
logos are widely carried on canned
products, it is hoped that our more direct
call-to-action on the 120 million cans filled
on average every year, will encourage
drinkers to increase recycling.
Our lightweight can programme at Wellpark
and Clonmel, further optimising the material
used, has now removed c.450 tonnes of
Aluminium from the environment, since site
enhancements were made in FY2019.
In Clonmel, we have also reduced
the amount of plastic in polyethylene
terephthalate (‘PET’) in our preforms.
Light weighting in PET and Out of Plastics
initiatives have delivered a reduction of c.800
tonnes in plastics, since site enhancements
were made in FY2019.
In FY2023, we will switch to 100% recycled
plastic on our keg caps and trial 50% PCR
shrink wrap for our glass and PET bottle
formats.
In Ireland we continue to produce reusable
glass bottles for our cider products and in
all territories, we distribute beer and cider
in reusable stainless-steel kegs. We have
demonstrated the cost, carbon and waste
reduction benefits of retaining this form of
packaging compared to disposable bottles/
kegs. Across C&C Group, 29% of our own
beer and cider is sold in returnable formats
(returnable keg and bottle).
Leo Varadkar’s visit
to Clonmel on 18th
February also marked
Bulmers investment
into ‘dry end’
packaging machinery
to reduce the
environmental impact
and ecological
footprint of consumer
packaging.
Packaging Material Usage Reduction (Tonnes)
FY2020 FY2021 FY2022
127 193 467
Plastic tonnage
Aluminium tonnage
787
451259 192
Corporate
Governance
Business
& Strategy
Financial
Statements
69
Waste Reduction
In FY2022 C&C’s main manufacturing
sites at Clonmel and Wellpark again both
achieved our target of sending zero waste to
landfill. We continue to implement a waste
hierarchy approach through prevention, re-
use and recycling:
• In our manufacturing operations, we
routinely monitor our waste stream and
target improvement annually. We measure
raw material usage and yields on a weekly
basis to ensure the efficient use of our
resources. We introduced improvements
in our recycling facility at Wellpark brewery
reducing the number of collections.
• 100% of by-products are recycled for use
as animal feed or organic compost. Over
20,000 tonnes of spent grain and apple
pomace were used as animal feed, with
the remainder of our waste either recycled
or sent for energy recovery.
• As part of a Scottish Government funded
initiative, Tennent’s is working with Zero
Waste Scotland (‘ZWS’) and leading
environmental consultancy, Eunomia, to
identify further circular opportunities in
our operations and to develop a pathway
towards adoption and implementation of
those opportunities.
Piloting Alternative Fuel Vehicles
Electric vehicles (‘EVs’) are being trialled
for deliveries in urban areas. An electric-
powered van has been utilised for small-
volume deliveries of Five Lamps craft beer
in Dublin and a trial of electric vans has
taken place at the Matthew Clark Park
Royal depot, together with a Hydrogenated
Vegetable Oil (‘HVO’) diesel replacement
trial at our Bedford depot. ln Scotland, we
are investigating alternative fuel types for
vehicles, electric vehicles for Wellpark to
Cambuslang trips and hydrogen for longer
distance inter depot shunts.
Electric and hybrid company car options
are now available to colleagues across the
Group. We are installing EV charging at our
5 main sites, with a plan to install across our
entire network by 2024.
Sustainably Source
our Products &
Services
Collaboration with our Apple and
Barley Growers
We are committed to sourcing our raw
materials from local sustainable sources.
All apples crushed at the Clonmel site for
the production of Bulmers and Magners
cider are sourced from the Island of Ireland.
As well as having 165 acres of our own
orchards in Co. Tipperary, there are over
50 partner growers on the Island, with
whom we work closely. The health and
sustainability of the Irish apple growing
sector are therefore central to C&C’s
strategy. A key aspect of apple orcharding
is the health of the population of bees and
other pollinating insects. As part of our
commitment to protect the biodiversity of
bees, C&C is a patron of the All-Ireland
Pollinator plan and patrons of the South
Tipperary Bee-Keepers Association
who carry out activity on the protection
and promotion of the species in our
Redmonstown Orchard, where we maintain
over 13km of healthy hedgerows to support
the bee and pollinator population and
maintain strong biodiversity in the area.
We also recognise that, since our products
are largely based around agricultural inputs,
investment in techniques which increase
yields for our apple growers also serves
to provide greater resilience in our supply
chain – for example, diversification of crop
varieties helps to minimise risks relating to
variable weather patterns and harvests.
In Scotland, our Tennent’s beers are brewed
using 100% Scottish malt. We seek to
support the growers of our key raw materials
such as barley and wheat through long-term
supply arrangements, with sustainability
a key consideration. Malting barley is only
purchased from farms with current and
up-to-date, independently audited farm
assurance schemes. 75% supply of malt
is FSA Gold accredited and the balance is
Redtractor assured, which ensures the best
environmental practices are adhered to.
For the opening of COP26 in Glasgow, as
thousands of delegates from around the
world arrived at the brand’s hometown for
the annual UN climate change conference,
Tennent’s Lager, launched an ambitious
multi-channel advertising campaign,
highlighting the importance of sustainable
brewing. Communicating why quality, local
brewing is a sustainable option for drinkers,
the 3 executions; Rebrewable Energy, Ayr
Miles and Outstanding in our Field, bring
to life the brand’s sustainable processes.
These include using 100% renewable
electricity at Wellpark, only ever brewing
with local barley and reducing the distance
from brewery to bar - a pint of Tennent’s
travels up to seven times fewer miles than
other popular beers. The campaign has also
contributed to Tennent’s achieving record
high brand health scores (January 2022).
Source water optimisation and
water usage reduction
COVID-19 challenges resulting in a shift
in SKU format to packaged product to
meet demand in the off-trade and an
overall reduction in production volumes
continues to impact our plans around
water optimisation. In FY2022 we therefore
achieved a water ratio of 3.4:1 missing our
target of 3.2:1 (Water Ratio of hectolitres
extracted versus hectolitres produced).
Anaerobic Digestion (water treatment)
plants are fully operational at both Wellpark
and Clonmel and have reduced our sites’
wastewater emissions and improved the
quality of our wastewater discharged by
c.90%.
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70 C&C Group plc Annual Report 2022
An upgrade to the pasteurisation control
system at Wellpark, reduced water
consumption in the canning operation by 14
million litres per annum, and we have a plan
to introduce a similar control system to our
Clonmel plant in May 2022.
The Clonmel site has an active groundwater
protection programme to upgrade the site
drainage and wastewater network. This will
protect the water sources of the surrounding
Tipperary countryside.
C&C again participated in the CDP Water
Security questionnaire in 2021 and secured
a C rating.
The CDP water security questionnaire
provides insight on current and future water-
related risks and opportunities. Along with
CDP’s water scoring methodology, the water
security questionnaire helps companies to
drive improvements in water management
and enables benchmarking against best
practice. As part of this we investigated
the water availability in the locations where
our apples are produced and sourced. The
location where our apples are produced
is considered low risk in terms of water
availability according to the WRI Aqueduct
Tool Group. As part of the 2021 CDP Water
Security questionnaire submission, we
engaged with our value chain on water
related issues. This will support our water
sustainability targets and also operate in
a manner aligned to our ESG objectives.
Again, we are engaging with our key
suppliers, requesting water use, risks and/or
management information. Although this is a
low percentage of suppliers, we considered
key ingredient and raw material suppliers as
the priority.
As part of our sustainability commitment,
we remain committed to reducing the
water ratio of hectolitres extracted versus
hectolitres produced.
FY2020-
21
FY2021-
22
%
Change
Water usage ratio
(Hectolitres extracted
versus hectolitres
produced) 3.3:1 3.4:1 3.0%
Water usage
(m cubic metres) 1.3 1.4 7.7%
Achieving the highest sourcing
standards
The Board has formally adopted an Ethical
and Sustainable Procurement (‘E&SP’)
Strategy which sets out its policy and
objectives in relation to wider social and
ethical issues as well as to environmental
issues including climate change. This
includes responsibility for setting of related
targets across the business and reporting of
results and KPIs. As part of our sustainable
procurement strategy work, we are building
information on the way our supply chain
manages their climate change risks and
their overall ethical approach. Under our
new E&SP approach, we have written to
Suppliers to request that they sign up to
our Code of Conduct and Modern Slavery
policy, as a fundamental requirement of
trading with our business. Completion of
our ES&P questionnaire, to confirm partners
commitment to sustainability is also a
requirement of trading with C&C.
We recognise that sustainability needs to
be embraced by partners at every stage of
the supply chain in order to be successful.
Audits and reviews are carried out both
during initial procurement and over the
lifetime of our major supplier’s contract to
assess their track record in environmental
management, health and safety,
sustainability, diversity, ethical approach and
overall corporate social responsibility.
In February 2022, CDP awarded C&C Group
an A- rating for Supplier Engagement,
acknowledging our performance on
governance, targets, scope 3 emissions,
and value chain engagement in the CDP
climate change questionnaire.
Eco Warriors
Part of Bibendum’s environmental pledge
sees us work with producers who share our
beliefs and adhere to sustainable methods
in the vineyard and winery. Practices
include organic and biodynamic viticulture,
ISO 14001 certification, carbon emission
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reduction, water management, waste
reduction and recycling, and ethical working
conditions.
In January 2022, Bibendum introduced our
Eco Warriors initiative. This sees us work
with some amazing producers, who not
only produce delicious wines, but also strive
to improve their communities and reduce
their impact on our planet. These 35 Eco
Warriors, tackle the challenges faced by
our people and planet with kindness and
consideration, focusing on four critical areas
of Planet, Place, Packaging and People. Eco
Warriors was launched with a sustainability
discussion panel and eco tasting featuring
nine of our producers at the Arboretum
venue in London on 22 February.
Irish bee propagation support
Bulmers always begins with a bee. Not
only is Ireland’s bee population vital to our
Bulmers cider, bee pollination is vital to all
life.
In the summer of 2021, Bulmers introduced
consumers and customers in Ireland to bees
as a key member of our “workforce”. Bees
are critical in bringing to life the 17 varieties
of apples that are used in the making of our
iconic Irish cider.
Working with the team behind the All-Ireland
Pollinator plan and launched on World
Bee Day 20th May 2021, the multimedia
campaign #meettheworkforce ran on TV,
radio, social media and in both the on and
off-trade. The campaign highlights the vital
role that bees and other pollinators play in
our ecosystem, and how necessary they
are for our survival. The campaign also aims
to raise awareness of the threat to bees
from loss of biodiversity, use of pesticides,
drought, habitat destruction, nutrition deficit,
air pollution, global warming and more. As
well as offering tips on the steps we can
all take to save the bees, the campaign
also offers consumers across Ireland the
chance to win 1 of 500 “Bee Hotels” to help
in the conservation and support of the bee
population.
Accreditation / Awards
The Group has achieved the ISO 14001
certification for its Clonmel, Matthew Clark
(Whitchurch, although scope covers all MCB
vehicle emissions including commercial
fleet and all MCB waste and packaging
requirements) and Bibendum sites, which
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Environment
is the international standard specifying the
requirements for an effective environmental
management system. Our Wellpark site
has been recognised for its consistently
excellent environmental compliance by the
Scottish Environment Protection Agency.
C&C’s sustainability efforts were
acknowledged with Tennent’s winning two
prestigious awards during 2021. Sustainable
Brewery of the Year at the Scottish Beer
Awards and a Good Practice Award and
shortlisted for Outstanding Sustainable
Achievement at the VIBES Scottish
Environment Business Awards.
For the third year, Matthew Clark was the
headline sponsor of the Footprint Food
& Beverage Sustainability Awards. This
event was aimed at sharing best practice
and recognising outstanding industry
achievement in support of sustainability
across the hospitality industry.
72 C&C Group plc Annual Report 2022
Ensure Alcohol
is Consumed
Responsibly
In FY2022, C&C met a KPI around the
responsible consumption of alcohol,
by achieving ZERO incidents of non-
compliance with alcohol industry or
regulatory codes.
Introduction of 0% and Low
Alcohol / Low Calorie Variants
C&C Group plc advocates the responsible
consumption of the brands we manufacture
and distribute. We are committed to the
promotion of responsible drinking and
moderate consumption of our products,
to ensure they are enjoyed safely by
consumers. Again in FY2022, C&C did not
face any enquiries or break any alcohol
marketing guidelines or regulations in any of
the markets in which we operate.
Recognising the evolving trends around
moderation and reduced consumption, C&C
has introduced low/no alcohol variants of its
core brands:
• Tennent’s Light has been acknowledged
as Scotland’s lowest calorie beer. At 3.5%
ABV, based on our award-winning Gluten
Free Tennent’s recipe and made from
100 per cent Scottish grown cereals and
fresh highland water from Loch Katrine,
Tennent’s Light is 114 calories per pint
and 66 calories per bottle.
• Tennent’s Zero is our refreshing 0.0%
lager. With 57 calories per bottle and
75 calories per can, and the same
great flavour profile as Tennent’s Lager,
Tennent’s Zero is a great choice for those
looking for non-alcoholic alternatives. At
the Scottish Beer Awards in September
2021, Tennent’s Zero was acknowledged
as Scotland’s best No or Low Alcohol
beer.
• In November 2021 we launched
Menabrea Zero Zero into the UK on-trade,
to offer an alcohol-free alternative, for
those who want to enjoy the great taste
of Italy’s most stylish serve, but with 0%
ABV.
• In February 2022, Bulmers Light launched
a new campaign, “Floaty Little Devils” on
TV, Social, Radio, Out of Home and in
both the on and off-trade. The campaign
highlights the brand’s low-calorie content
(84 calories in each 300ml bottle).
• Magners and Bulmers Zero are refreshing
alternatives to our much-loved Original
recipe with 0.0% alcohol. Both have all the
flavour and character you would expect
from our Original recipe and use a non-
alcoholic fermentation to create the cider
character.
Consistent with our commitment towards
responsible alcohol consumption, and to
ensure that consumers are provided with
the full information on our products, we
continue to display calorie information and
the Chief Medical Officer guidelines on the
primary packaging of our major brands in
the UK and Ireland.
Supporting Drinkaware
We include “Drinkaware” referencing
prominently on all of our owned / agency
brand communications (including TV, out of
home, social media and on our sponsorship
media assets) in the UK throughout the year.
We have met our KPI to donate owned
media to reach 5m UK consumers with
Drinkaware responsibility messaging.
Portman Group
In May 2021, C&C re-joined the Portman
Group. While our internal marketing codes
have always exceeded the Portman Group
Codes of Practice, we were delighted to
re-join the Group and actively support
their aims to deliver higher standards of
best practice and ensure the responsible
marketing and promotion of alcoholic
products.
We participate fully in all Portman forums
including Council and Public Affairs
Directors meetings and support their work
on key industry initiatives including Alcoholic
Drinks Industry Forum, low and no alcohol
industry roundtable, communications
marking 25 years of the code of practice
and response to mandatory labelling
proposals.
Support for relevant charities
The Group is committed to the communities
in which it operates and undertakes a
range of initiatives that benefit our local
communities.
In FY2023, C&C will roll out a Volunteering
Policy across the group, offering colleagues
the opportunity to support community and
charity initiatives and deliver a meaningful
impact on the world around us.
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Some examples of our commitment to the
community are set out below.
In March 2022, to help those affected by
the conflict in Ukraine, C&C Group donated
€25,000 each to the British Red Cross and
the Irish Red Cross.
We are active members of Tipperary
Chamber of Commerce and hold a seat
on the steering group of County Tipperary
Skillnet, our local enterprise led learning
network. We have forged strong links with
local employment services including ‘Turas
Nua’, who are Ireland’s leading welfare to
work provider, helping people move on their
journey into sustainable employment.
We continue to partner with Inner City
Enterprise (‘ICE’) in Dublin. ICE is a charity
which advises and assists unemployed
people in Dublin’s inner city to set up their
own businesses. We have provided ICE
with funding to support their initiatives
and a number of our staff have joined their
panel of business advisors to support the
entrepreneurs that they work with.
In 2022, Matthew Clark, will again partner
with Pubaid and the All-Party Parliamentary
Beer Group to support the Community Pub
Hero Awards. The initiative recognises the
critical role that hospitality plays across the
UK, together with licensees and teams who
went the extra mile to help their communities
through the pandemic.
Bibendum continues to be a key partner of
The Drinks Trust (formerly The Benevolent),
to provide care and support to the people
who form the drinks industry workforce
with services across vocational, wellbeing,
financial and practical support. These
services are intended to assist with and
improve the circumstances of those who
receive them.
Heverlee is created in association with the
Abbey of the Order of Premontre (known
as Park Abbey) and is inspired by the beers
first brewed by the monks in medieval times.
The Abbey lies just outside Leuven and is
the largest of its kind in Belgium, founded
in 1129. Today, every pint of Heverlee
sold supports the major multi-million Euro
restoration of Park Abbey.
In autumn 2021, Orchard Pig, delivered
a campaign to limit food waste, featuring
influencers, PR and owned-social content –
“Save The Scraps”. The west country cider
brand worked with a series of food bloggers
and influencers to create recipes using
leftovers in a bid to encourage consumers to
be more mindful with waste.
Tennent’s continues its longstanding
partnership with The Benevolent Society of
Scotland (‘The Ben’), which aids people of
all ages who have worked in the licensed
trade for at least three years full-time.
Beneficiaries receive annual financial
assistance as well as discretionary grants for
emergency situations.
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In September 2021, Tennent’s Light
announced a £250,000, 3-year commitment
to grassroots creative talent in Scotland,
following a devastating year for arts and
culture due to the pandemic. The “SpotLight
Project” sees Tennent’s Light invest
3.5% from every pint and bottle sold to
support Scotland’s up and coming creative
talent. Out of more than 800 promising
applicants, five creatives; Danny Aubrey,
Katie Doyle, Jubemi Iyiku, Jonny MacKinnon
and Michael Rankin, have been chosen,
spanning industries including music,
sustainable fashion, film, photography and
skateboarding.
74 C&C Group plc Annual Report 2022
Enhance Health,
Wellbeing & Capability
of colleagues
Our main priority will always be the health,
safety and wellbeing of our employees;
recognising the key importance of delivering
better safety standards and improving the
wellbeing of our colleagues.
Safety First
Given the ongoing impact of COVID-19 on
society and our industry during FY2022,
we continued with our risk assessments,
controls and training across all of our
operations to protect our employees and
deliver a “COVID-19 secure” manufacturing
and logistics supply chain. To maintain the
highest safety standards, the COVID-19
protection measures we introduced in
FY2021, were extended into FY2022.
C&C has launched a revised Health and
Safety Strategy under our ‘Vision Zero’
initiative. We are committed to create a
safe and healthy workplace by reducing all
accidents, harm and work-related diseases
whilst continually promoting excellence in
health, safety and wellbeing. A key part of
this sees us implement a “Plan, Do, Check,
Act” cycle to help embed health and safety
management as an integral part of good
management across the Group.
The Group has introduced a new risk
platform system to facilitate better reporting
of accidents, near misses and Health and
Safety audits. Launched in December,
“BSI Connect”, has been supported by the
introduction of risk assessment training and
a new C&C Risk Management Policy and
Protocol.
To help improve Health and Safety across
the Group, we set a KPI to reduce both
RIDDOR (Reporting of Injuries, Diseases
and Dangerous Occurrences Regulations)
and Lost Time Accidents, for employees,
agency staff and contractors, by 10% versus
FY2020.
We have met our FY2022 RIDDOR KPI.
Clonmel
10.81
3.92
3.13
1.83
9.05
5.46
10.32
0.00
0.00
10.03
7.23
7.26
3.00
4.90
11.01
26.86
Wellpark
Bulmers Ireland
MCB
Scotland Logistics
RIDDOR - Incidents per 100,000 hours worked
Lost Time Accident Incident Rate incidents per 100 employees
FY2020 FY2021 FY2022
35.99
25.10
Total
Clonmel
0.62
1.76
0.00
0.28
0.00
0.00
0.00
0.00
0.00
1.37
0.75
2.80
2.42
1.42
2.85
Wellpark
Bulmers Ireland
MCB
Scotland Logistics
FY2020
FY2021 FY2022
4.69
3.93
5.65
Total
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developing a mental health problem or
experiencing a worsening of an existing
mental health problem. This first aid is given
until appropriate professional support is
received or until the crises resolves.
The role of our Mental Health First Aiders is
to:
• Raise awareness of wellbeing activities
and initiatives
• Challenge the stigma around mental
wellbeing
• Actively listen and signpost support to
colleagues
• Build trust, demonstrate compassion, and
respect confidentiality
• Collaborate with other First Aiders (and
networks) to share best practice
• Be open and lead the charge in sharing
stories about mental health
Colleagues across the Group have
ongoing access to Employee Assistance
and Occupational Health programmes.
In addition, colleagues have 365, 24/7
access to free and confidential mental
health wellbeing support programmes via
external specialist providers. This mental
health wellbeing support also extends to
colleagues’ partners or spouses and any
dependents over the age of 16 years who
are still living at home.
In Ireland, in Autumn 2021, in partnership
with Health Screening Plus, we trialled on
site employee health screening and lifestyle
assessments. Over 170 colleagues took part
over a 2-week period. Feedback has been
overwhelmingly positive and in FY2023 we
will roll out equivalent Health and Wellbeing
education and support programmes across
the Group.
In FY2022, free flu jabs were offered to all
colleagues across Group, with over 600
taking advantage of the opportunity.
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Labour shortage and increases in agency /
temporary staff of up to 60%, has resulted
in us missing our LTA KPI. To address this,
we continually re-evaluate training and
supervision provided to eliminate accidents
and we are now seeing reductions in
numbers of agency staff being used.
Agency staff remaining are benefitting from
experience, training and supervision.
Other Health and Safety initiatives being
rolled out across C&C, as part of the “Safety
First” approach include commercial vehicle
CCTV installation, forklift truck safety
upgrades, provision of automated external
defibrillator (AED’s) across all sites and trials
of CO
2
monitors.
Health and wellbeing external
support systems
To enhance the external Employee
Assistance Programmes that are in place
across C&C Group, we have introduced
55 fully certified Mental Health First Aiders
(‘MHFAs’). These volunteers will provide
the initial help to any colleague who is
To enhance the
external Employee
Assistance
Programmes that
are in place across
C&C Group, we have
introduced 55 fully
certified Mental
Health First Aiders
(MHFA).
76 C&C Group plc Annual Report 2022
Employee Resource Groups (‘ERGs’)
In March 2022, C&C launched 3 Employee
Resource Groups, to enhance our Health
and Wellbeing efforts.
1. Physical Health, including how we
prioritise our physical wellbeing during
times of stress and different ways of
working.
2. Mental Health, including promoting the
role of our Mental Health First Aiders.
3. Parents Returning to Work, including
how we can support working parents
by sharing advice and insight.
These employee-led, voluntary groups
aim to foster a diverse, inclusive and
equitable workplace. The ERGs also aim
to create a sense of belonging by inspiring
conversations, while bringing new ways
to look at issues and ultimately deliver
innovative solutions. Each ERG is sponsored
by an Executive Committee member, to
create and deliver the key themes with their
ERG members.
Remote working
In September 2021, to facilitate and support
remote working, we introduced our Right
to Disconnect Policy and our Agile Working
Guidelines. The Right to Disconnect refers to
all employees’ right to disengage from work
and refrain from engaging in work-related
communications, such as emails, telephone
calls or other messages, outside normal
working hours. Our aim is to cultivate a culture
of hard work within normal hours while fully
respecting personal life and time outside of
work.
Managers play a key role in implementing
these policies; however, colleagues can
follow a formal complaint procedure if
their experience does not live up to our
commitment.
Our Agile Working Guidelines provide a
clear steer on our approach to agile working
for colleagues who have flexibility in their
work location or working pattern to balance
business needs with individual preferences.
Agile Working is an informal arrangement
that may enable a better work-life balance
for our people, where job roles within C&C
Group do not require attendance at a
specific workplace at a particular time.
Alcohol awareness training
In FY2022, as part of our commitment to
the responsible promotion and consumption
of alcohol and ongoing efforts to support
colleague health and wellbeing and ensure
a safe working environment, we partnered
with leading alcohol charity, Drinkaware, to
roll out e-learning resources to all colleagues
across C&C Group.
To ensure our marketing colleagues have a
full understanding of legislation, and industry
codes and guidelines – we are working with
Copy Clear (Institute of Advertising Practice
Ireland Alcohol Marketing) in ROI and the
Portman Group (on the Code of Practice on
the Naming, Packaging, and Promotion of
Alcoholic Drinks and The Code of Practice
on Alcohol Sponsorship ) and Advertising
Standards Authority (ASA) / Code of
Advertising Practice (CAP) in the UK, to
refresh mandatory responsible alcohol
marketing training.
Embed key codes including
Employee Code of Conduct
By the end of FY2022, c.800 colleagues
across the Group had completed online
policy compliance training, created by legal
specialists, DWF Advantage, on:
• Code of Conduct
• The Bribery Act
• Fraud prevention
• Cyber security
• Cyber-crime
• Information security at C&C
• Modern Slavery
• Whistleblowing with confidence
• Financial crime compliance
• Updated C&C Policies
• Competition Law
Learning and Development
Programmes
We have a renewed focus to develop our
people and strengthen our capability to
ensure that C&C has the most engaged,
inspired and committed colleagues.
A strategic review of our approach to
Learning and Development was carried out
across C&C during FY2022. Following this
review, in FY2023, we will introduce our
People Growth agenda under 5 key pillars:
• Develop the best leaders;
• Developing our differentiating capabilities;
• Execute people processes consistently;
• Live our Values, Behaviours and Culture;
and
• Bring the outside in to win!
We will provide an update on the delivery of
our new Learning and Development strategy
in our FY2023 Annual Report.
A learning management platform is available
across C&C. This provides on-demand
online resources to all colleagues. In
addition to wellbeing, COVID-19, and
diversity and inclusion topics, online
learning content is available to develop sales
teams and support organisational change
programmes.
As COVID restrictions are fully removed, we
will reintroduce apprenticeships requiring
on the job learning experience. Professional
development has continued within central
and support services functions, including
Finance, Marketing and HR, as well as some
sales and operational areas. We continue
to support professional development
across the Group and this year have again
supported colleagues through further
education and professional exams including
SVQs in Management, MBAs, CIMA, CIPD
and IBD qualifications.
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Build a more Diverse,
Inclusive and
Engaged C&C
We want C&C to be a place where
colleague’s individuality is respected and
celebrated.
Diversification of Board
With each review of its composition, and
when considering any appointment, the
Board has particular regard for diversity
of gender, social and ethnic backgrounds,
nationality, and cognitive and personal
strengths. Diversity at Board level – and
throughout the organisation – is key to
ensure that we incorporate a wider range of
perspectives in deliberations and decision
making. While incorporating all aspects of
diversity, we have placed a particular focus
on gender and ethnic diversity in light of the
Hampton Alexander and Parker Reviews.
Group wide Diversity & Inclusion
measurement
In FY2022, we continued to focus on strong
diversity and fair employment practices.
We do however recognise our need for
greater effort in these areas. Our Diversity,
Inclusion and Wellbeing Policy is visible
across C&C Group and is supplemented by
shared learning resources, available to all
colleagues. Diversity and Inclusion (‘D&I’)
are a focus for our Executive Committee,
who continue to receive external coaching
to support them in leading inclusion in a
more meaningful way. Training is being rolled
out to all managers and those involved in
recruitment process and D&I principles
will be included in our recruitment and
assessment panels.
Governance
In the summer of 2021 as COVID restrictions
were relaxed, we took a critical step by
launching our confidential ‘Getting to Know
You’ questionnaire. This allows us to develop
our approach via a greater understanding of
the demographic and intersectional make up
of our colleagues and their in-depth views
on D&I topics to allow us to develop our HR
practices through improved insight.
On 8 March 2022, in celebration of
International Women’s Day 2022, around
150 women from across C&C Group, met
to discuss the issue of gender bias and how
we as a business can take positive steps
to #BreakTheBias in our workplace and
communities. We have captured colleague
comments on what we as a business can
do to help #BreakTheBias and will ensure
these are included in our discussions and
actions going forward.
Responsibility Report
On 8 March 2022,
in celebration
of International
Women’s Day 2022,
around 150 women
from across C&C
Group, met to
discuss the issue of
gender bias and how
we as a business can
take positive steps
to #BreakTheBias in
our workplace and
communities.
78 C&C Group plc Annual Report 2022
Employee engagement tracking
Colleague engagement is a key priority for
C&C Group and is an agenda item at each
Board, Executive and ESG Committee
meeting.
In July and December 2021, C&C worked
with Peakon to survey all colleagues, to
capture their views on the Group. These
surveys, submitted anonymously, look
to identify where we are as a business
and how our values reflect colleagues’
experience working at C&C. The feedback
secured on areas including diversity,
inclusion and wellbeing, and delivering our
business strategy, are critical in our efforts to
make C&C a great place to work.
Peakon survey results are shared with the
Executive Committee and the Board and
cascaded to direct reports and broader
business areas. Actions were identified and
communicated to all colleagues to address
the three main drivers of Engagement,
Reward, Growth (see Learning and
Development above) and Strategy & Mission
to address colleague feedback.
Initiatives put in place to address feedback
on Reward include a role evaluation exercise
with Korn Ferry, pay and salary increases for
FY2023, and discussions with colleagues to
establish common understanding of “what
reward is”. C&C will also extend Gender
Pay Gap Reporting across the Group and
measures we will put in place to address the
gap.
The Group recognises that communication
is a priority in improving colleague
understanding of strategy and mission.
Initiatives to improve communication include
weekly briefings to managers and monthly
briefings to all colleagues. In February and
March 2022, six roadshows were held
across the UK to present and discuss brand
plans and receive feedback from colleagues.
On 10 March 2022, a full day session on
strategy with senior leaders was held in
Manchester. The content from this session
was cascaded across the business, to allow
colleagues to identify how C&C purpose,
values and strategy, can be embedded in
their day-to-day work.
To encourage greater participation in the
surveys, Peakon engagement training
has been put in place for all managers
and kiosks have been placed at all
manufacturing and depot sites.
Our Forum sessions were again held in
November 2021 and February 2022. Hosted
by Executive Committee members and
Non-Executive Directors. These sessions
provide a short business update, with the
key focus being to answer any questions /
concerns that colleagues have about C&C.
Our Forums build on existing employee
engagement opportunities and the Group’s
continuing efforts to develop a culture of
informality, transparency, and trust. The
aim is to provide a further opportunity to
increase two-way dialogue between the
Group and all staff. They also allow our Non-
Executive Directors to hear directly from
colleagues and feedback to the C&C Board.
Our Forum sessions will be held regularly
(quarterly as a minimum) across our sites in
UK and Ireland during FY2023.
Confidential Whistleblowing Helpline
At C&C, we work hard to foster a safe,
inclusive working environment. We have a
zero-tolerance policy for all forms of bullying,
harassment and discrimination, and we
want to ensure that everyone at C&C has
the ability to speak up about injustices they
experience or witness. We have partnered
with Vault, a simple, safe and confidential
app. that allows colleagues to raise any
concerns they may have about themselves,
a colleague or our working environment.
There were 35 instances of concerns raised
in FY2022, on “concern or suspicion related
to ethical or compliance related wrongdoing
in the Group”.
Human Rights
We do not condone and will not
knowingly participate in any form of
human exploitation, including slavery and
people trafficking. We refuse to work with
any suppliers or service providers who
knowingly participate in such practices or
who cannot demonstrate to us sufficient
controls to ensure that such practices are
not taking place in their supply chains.
Our approach is reflected in our Code of
Conduct and Modern Slavery policies,
which we circulate to suppliers. We also
carry out diligence audits and checks on
our suppliers to ensure that they have in
place and adhere to appropriate ethical
policies, with KPIs for those areas where we
believe the potential impact on the Group
is material. A process is in place internally
to address and remediate any instances of
non-conformance. A copy of our Code of
Conduct and Modern Slavery Statement are
available on our website.
Anti-Bribery and Corruption
Our Anti-Bribery and Corruption Policy and
accompanying training materials, referenced
above in Embedding Key Codes, are
designed to be straightforward and direct
so that it is clear to all employees what
they may or may not do as part of normal
business transactions. The Policy applies
to all colleagues in the Group equally. It is
written to ensure that legitimate and honest
business transactions can be distinguished
from improper and dishonest transactions.
This Policy and the accompanying training
will be tracked as part of the internal
audit monitoring process to monitor
understanding and adherence to the Policy.
KPIs have been established for those areas
where we believe the potential impact on
the Group is material. During FY2022, no
incidences of bribery or corruption were
uncovered across the Group.
Corporate
Governance
Business
& Strategy
Financial
Statements
79
Collaborate with
Government,
NGOs and Industry
Programmes
We are funders and active members of
Drinkaware, which performs the valuable
role of educating consumers about
responsible alcohol consumption.
The Group, also support Best Bar None
in Scotland, a national accreditation and
award scheme for licensed premises.
Participants are given lots of support and
advice to improve the safety of their staff,
premises and customers and to adopt high
management standards.
We are members of the UK’s National
Association of Cider Makers (‘NACM’),
which works closely with apple growers and
the agricultural communities in cider regions
in the UK. This working relationship puts
us at the heart of many UK Government
discussions relating to the responsible use
of alcohol. The NACM is also engaged
with tax and regulatory departments and
opinion-forming bodies having an interest
in cider and alcohol generally. We are also
members of the Wine and Spirit Trade
Association and the European Cider and
Fruit Wine Association.
In Ireland, C&C are members and actively
support the work of the Licensed Vintners
Association, the Vintners Federation of
Ireland and Hospitality Ulster.
Support Long Live the Local with
BBPA
In FY2022, C&C worked with the British
Beer and Pub Association (BBPA) and
c.50 producers and pub groups to support
Long live the Local. The campaign was
Launched in 2018 to raise awareness of the
high number of pub closures across the UK
and to highlight that the UK has one of the
highest Beer Duty rates in the world. The
campaign seeks an extension in the lower
level of VAT for food and beverages sold in
hospitality, an overall reduction in beer duty
and alcohol duty reforms that support British
pubs and beer as a lower strength product,
together with lower business rates for pubs
equitable to other similar businesses.
Sustainable Growth Agreement
with Scottish Environmental
Protection Agency
During a visit to Wellpark in October
2021, Mairi McAllan, Scottish Minister for
Environment and Land Reform and Jo
Green, Chief Officer for Green Recovery
at the Scottish Environmental Protection
Agency (‘SEPA’), announced the signing of
a Sustainable Growth Agreement (‘SGA’),
between Tennent’s and SEPA which sets
Responsibility Report
Governance
out a joint vision for how the producer
of Scotland’s favourite beer can help
encourage the country’s drinks industry to
adopt more sustainable practices. The SGA
focuses on two key areas – the first looking
to address Tennent’s environmental footprint
across plant, supply chain, distribution
networks and materials use. The second
explores how Tennent’s will use heritage
and its iconic brands to educate and engage
consumers and customers in conversation
on climate change and environmental
challenges and help drive positive action.
Partnership with 2050 Climate
Group and Scottish Environmental
Protection Agency
Tennent’s has also partnered with the
Scottish Environment Protection Agency
and climate charity, the 2050 Climate Group
to hold a series of workshops, to engage
consumers in climate conversation. A launch
event was held at Wellpark during COP26.
A further series of events, will be held in on-
trade venues across Scotland throughout
2022, bringing together consumers and
climate activists, with the aim of increasing
climate conversation and action.
80 C&C Group plc Annual Report 2022
Leading Deposit Return Scheme
(‘DRS’) Implementation in Scotland
C&C has supported the Scottish
Government’s aims around the introduction
of a Deposit Return Scheme (‘DRS’) since
proposals were first announced in 2017.
Since then, we have worked with the
Scottish Government, Zero Waste Scotland,
our Trade Bodies and all stakeholders to
help create an efficient, well-designed DRS
for Scotland that delivers on the country’s
recycling and litter targets and supports
ambitions for a more circular economy.
In March 2021, C&C became a founding
member of Circularity Scotland, the system
administrator appointed to operate the
DRS in Scotland. The administrator works
collaboratively with producers, retailers,
the hospitality industry and wholesalers
to deliver a scheme to collect more than
90% of used drinks containers. The
Group engages fully in all working groups
established by CSL and has established
a Group Steering Committee and project
teams to develop our internal systems and
processes for the introduction of DRS in
Scotland on 16 August 2023 (and prepare
for the introduction of DRS in Ireland and the
rest of the UK).
Collaborate on Minimum Unit Price
Implementation in Ireland
We continue to work with the Irish
Government and all stakeholders following
the implementation of minimum unit pricing
in Ireland on 1 January 2022. Although the
majority of drinkers in Ireland enjoy alcohol
responsibly, we believe this legislation will
have the same positive impact as it has
had in Scotland in tackling the availability
of strong, cheap alcohol and its correlation
with harmful drinking.
We continue to liaise with all stakeholders to
prepare for the implementation of minimum
unit pricing in Northern Ireland.
Tax
The Group takes its responsibilities as a
corporate citizen seriously. This includes
respecting and complying with local
tax laws and paying the required and
appropriate levels of tax in the different
countries where we operate. We claim
the allowances and deductions that we
are properly entitled to, for instance, on
the investment and employment that we
bring to our communities. We benefit from
having always been an Irish company,
established in the Republic of Ireland’s
corporate tax environment, with our major
cider production unit located in Clonmel and
majority of the Group’s profits are earned in
the Republic of Ireland and the UK, which
both have competitive corporation tax rates
compared with the European average. In
the Republic of Ireland and the UK, we remit
substantial amounts of duty on alcohol
production.
We continue to
work with the Irish
Government and
all stakeholders
following the
implementation
of minimum unit
pricing in Ireland on
1 January 2022.
Corporate
Governance
Business
& Strategy
Financial
Statements
81
Directors’ Report
The Directors present the Annual Report and audited Consolidated Financial Statements of the Group for the year ended 28 February 2022.
Principal Activities
Non-Financial Reporting Statement
In compliance with the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups)
Regulations 2017, the table below is designed to help stakeholders navigate to the relevant sections in this Annual Report to understand the
Group’s approach to these non-financial matters:
Reporting Requirements Our Policies
Section in Annual Report or
Page References Risks
Environmental
matters
Environmental Sustainability Responsibility Report Sustainability and Climate Change is one of our
principal risks. Please refer to page 37 for more
details.
Social and
Employee matters
Diversity and Inclusion
Health and Safety
Speak Up
Conflicts of Interest
Responsibility Report For employee matters, retention and recruitment of
staff is one of our principal risks. Please refer to page
38 for more details.
Human Rights Anti-Modern Slavery Responsibility Report Although the risks associated with human rights
abuses are actively monitored, the Group does not
believe these risks meet the threshold of a principal
risk for our business.
Anti-bribery and
Corruption
Code of Conduct
Compliance
Anti-Bribery
Responsibility Report Although the risks associated with bribery and
corruption are actively monitored, the Group does
not believe these risks meet the threshold of a
principal risk for our business.
Description of the
business model
Please refer to pages
26 to 29
Non-Financial
key performance
indicators
Please refer to pages
32 - 33
Dividends
Due to the impact of COVID-19 and the impact this has on global economies and on business generally, the Board concluded it was not
appropriate, nor prudent, to pay an interim dividend or declare a final dividend for FY2022. For the previous financial year ending 28 February
2021, no interim or final dividend was paid given the outbreak of COVID-19 and its impact.
82 C&C Group plc Annual Report 2022
Board of Directors
The names, functions and date of appointment of the current Directors are as follows:
Director Function Appointment
Stewart Gilliland Non-Executive Chair 2020
Interim Executive Chair 2020*
Non-Executive Chair 2018
Non-Executive Director 2012
David Forde Group Chief Executive Officer 2020
Patrick McMahon Group Chief Financial Officer 2020
Vineet Bhalla Independent Non-Executive Director 2021
Jill Caseberry Independent Non-Executive Director 2019
Vincent Crowley Independent Non-Executive Director 2016
Emer Finnan Independent Non-Executive Director 2014
Ralph Findlay Independent Non-Executive Director 2022
Helen Pitcher Independent Non-Executive Director 2019
Jim Thompson Independent Non-Executive Director 2019
* Stewart Gilliland was appointed as interim Executive Chair from 16 January 2020, following the retirement of Stephen Glancey, to 2 November 2020, when David Forde was
appointed Group Chief Executive Officer.
Research and Development
Certain Group undertakings are engaged in
ongoing research and development aimed
at improving processes and expanding
product ranges.
Listing Arrangements
In order to facilitate entry into the FTSE UK
Index Series, the Group cancelled the listing
and trading of C&C shares on Euronext
Dublin with effect from 8 October 2019. The
Group is listed on the premium segment
of The London Stock Exchange and was
included in the FTSE All-Share Index and the
FTSE 250 indices in December 2019.
The Group remains domiciled and tax
resident in Ireland, with its registered and
corporate head office located in Dublin.
The Group also retains a significant
manufacturing, commercial and brand
presence in Ireland.
Share Price
The price of the Company’s ordinary shares
as quoted on the London Stock Exchange
at the close of business on 28 February
2022 was £2.11 (28 February 2021: £2.58).
The price of the Company’s ordinary shares
ranged between £2.03 and £2.98 during the
year.
Further Information on the Group
The information required by section 327 of
the Companies Act 2014 to be included in
this report with respect to:
1. The review of the development and
performance of the business and future
developments is set out in the CEO’s
Review on pages 10 to 23 and the
Strategic Report on pages 2 to 81.
2. The principal risks and uncertainties
which the Company and the Group
faces are set out in the Strategic Report
on pages 34 to 45 and which have
been updated to reflect the risks posed
by the conflict in Ukraine and evolving
inflationary cost pressures.
3. The key performance indicators relevant
to the business of the Group, including
environmental and employee matters,
are set out in the Strategic Report on
pages 32 to 33 and in the Group Chief
Financial Officer’s Review on pages 54
to 61; and further information in respect
of environmental and employee matters
is set out in the Responsibility Report
on pages 62 to 81.
4. The financial risk management
objectives and policies of the Company
and the Group, including the exposure
of the Company and the Group to
financial risk, are set out in the Group
Chief Financial Officer’s Review on
pages 54 to 61 and note 24 to the
financial statements.
The Group’s Viability Statement is contained
in the Strategic Report on pages 44 to 45.
Corporate Governance
In accordance with Section 1373 of the
Companies Act 2014, the corporate
governance statement of the Company
for the year, including the main features of
the internal control and risk management
systems of the Group, is contained in
the Strategic Report and the Corporate
Governance Report on pages 90 to 99.
Corporate
Governance
Business
& Strategy
Financial
Statements
83
Directors’ Report
(continued)
Substantial Interests
As at 28 February 2022 and 12 May 2022, being the latest practicable date, details of interests over 3% in the ordinary share capital carrying
voting rights which have been notified to the Company are:
No. of ordinary
shares held as
notified at
28 February 2022
% at
28 February 2022
No. of ordinary
shares held as
notified at
12 May 2022
% at
12 May 2022
Artemis Investment Management LLP 59,082,210 15.04% 59,082,210 15.04%
FIL Limited 38,056,824 9.69% 38,056,824 9.69%
Silchester International Investors LLP 12,341,061 3.14% 12,341,061 3.14%
BlackRock, Inc. 16,310,918 4.15% 16,310,918 4.15%
Brandes Investment Partners, L.P. 12,063,059 3.07% 12,063,059 3.07%
Janus Henderson Group plc 11,835,427 3.01% 11,83 5,427 3.01%
As far as the Company is aware, other than as stated in the table above, no other person or company had at 28 February 2022 or 12 May
2022, being the latest practicable date, an interest in 3% or more of the Company’s share capital carrying voting rights.
Issue of Shares and Purchase of
Own Shares
At the Annual General Meeting held on 1
July 2021, the Directors received a general
authority to allot shares. A limited authority
was also granted to Directors to allot shares
for cash otherwise than in accordance with
statutory pre-emption rights. Resolutions
will be proposed at the 2022 Annual General
Meeting to allot shares to a nominal amount
which is equal to approximately one-third
of the issued ordinary share capital of
the Company. In addition, resolutions will
also be proposed to allow the Directors
to allot shares for cash otherwise than in
accordance with statutory pre-emption
rights up to an aggregate nominal value
which is equal to approximately 5% of the
nominal value of the issued share capital of
the Company and, in the event of a rights
issue, and a further 5% of the nominal value
of the issued share capital of the Company
for the purposes of an acquisition or a
specified capital investment. If granted,
these authorities will expire at the conclusion
of the Annual General Meeting in 2023 and
the date 18 months after the passing of the
resolution, whichever is earlier.
At the Annual General Meeting held on 1
July 2021 authority was granted to purchase
up to 10% of the Company’s ordinary
shares (the “Repurchase Authority”). As at
the date of this Report, the Group had not
purchased any ordinary shares pursuant to
the Repurchase Authority from the start of
the financial year.
Special resolutions will be proposed at the
2022 Annual General Meeting to renew
the authority of the Company, or any of its
subsidiaries, to purchase up to 10% of the
Company’s ordinary shares in issue at the
date of the Annual General Meeting and
in relation to the maximum and minimum
prices at which treasury shares (effectively
shares purchased and not cancelled) may
be re-issued off-market by the Company.
If granted, the authorities will expire on the
earlier of the date of the Annual General
Meeting in 2023 and the date 18 months
after the passing of the resolution. The
minimum price which may be paid for
shares purchased by the Company shall not
be less than the nominal value of the shares
and the maximum price will be 105% of the
average market price of such shares over
the preceding five days. The Directors will
only exercise the power to purchase shares
if they consider it to be in the best interests
of the Company and its shareholders.
As at 12 May 2022, being the latest
practicable date, options to subscribe for a
total of 2,805,110 ordinary shares (excluding
Recruitment and Retention Awards) are
outstanding, representing 0.71% of the
Company’s total voting rights. If the authority
to purchase ordinary shares were used in
full, the options would represent 0.78% of
the Company’s total voting rights.
Dilution Limits and Time Limits
All employee share plans contain the share
dilution limits recommended in institutional
guidance, namely that no awards shall be
granted which would cause the number
of Shares issued or issuable pursuant to
awards granted in the ten years ending with
the date of grant (a) under any discretionary
or executive share scheme adopted by the
Company to exceed 5%, and (b) under any
employees’ share scheme adopted by the
Company to exceed 10%, of the ordinary
share capital of the Company in issue at that
time.
84 C&C Group plc Annual Report 2022
The European Communities
(Takeover Bids (Directive 2004/25/
EC)) Regulations 2006
Structure of the Company’s share capital
At 12 May 2022, being the latest practicable
date, the Company has an issued share
capital of 401,913,690 ordinary shares of
€0.01 each and an authorised share capital
of 800,000,000 ordinary shares of €0.01
each.
At 28 February 2022, the trustee of the C&C
Employee Trust held 1,644,942 ordinary
shares of €0.01 each in the capital of the
Company. Shares held by the trustee of the
C&C Employee Trust are accounted for as
if they were treasury shares. These shares
are, however, included in the calculation
of Total Voting Rights for the purposes of
Regulation 20 of the Transparency (Directive
2004/109/EC) Regulations 2007 (“TVR
Calculation”).
As at 28 February 2022, a subsidiary of
the Group held 9,025,000 shares in the
Company, which were acquired under
the authority granted to the Company.
These shares are not included in the TVR
calculation and are accounted for as
treasury shares. Treasury shares represent
3% of issued share capital as at 28 February
2022. Further details can be found in Note
25 (Share Capital and Reserves) on page
227.
Details of employee share schemes, and
the rights attaching to shares held in these
schemes, can be found in note 4 (Share-
Based Payments) to the financial statements
and the Report of the Remuneration
Committee on Directors’ Remuneration on
pages 116 to 135.
The Company has no securities in issue
conferring special rights with regard to
control of the Company.
Details of persons with a significant holding
of securities in the Company are set out on
page 84.
Rights and obligations attaching to the
Ordinary Shares
All ordinary shares rank pari passu, and
the rights attaching to the ordinary shares
(including as to voting and transfer) are
as set out in the Company’s Articles of
Association (“Articles”). A copy of the
Articles may be obtained upon request to
the Company Secretary.
Holders of ordinary shares are entitled to
receive duly declared dividends in cash or,
when offered, additional Ordinary Shares.
In the event of any surplus arising on the
occasion of the liquidation of the Company,
shareholders would be entitled to a share
in that surplus pro rata to their holdings of
ordinary shares.
Holders of ordinary shares are entitled
to receive notice of and to attend, speak
and vote in person or by proxy, at general
meetings having, on a show of hands,
one vote, and, on a poll, one vote for each
Ordinary Share held. Procedures and
deadlines for entitlement to exercise, and
exercise of, voting rights are specified in
the notice convening the general meeting
in question. There are no restrictions on
voting rights except in the circumstances
where a “Specified Event” (as defined in
the Articles) shall have occurred and the
Directors have served a restriction notice on
the shareholder. Upon the service of such
restriction notice, no holder of the shares
specified in the notice shall, for so long as
such notice shall remain in force, be entitled
to attend or vote at any general meeting,
either personally or by proxy.
Holding and transfer of Ordinary
Shares
Following the migration in March 2021 of
securities settlement in the securities of
Irish registered companies listed on the
London Stock Exchange (such as the
Company) and/or Euronext Dublin from the
current settlement system, CREST, to the
replacement system, Euroclear Bank, the
ordinary shares can be held in certificated
form (that is, represented by a share
certificate) or indirectly through the Euroclear
System or through CREST in CDI (CREST
Depository Interest) form.
Save as set out below, there is no
requirement to obtain the approval of the
Company, or of other shareholders, for a
transfer of ordinary shares. The Directors
may decline to register (a) any transfer of
a partly-paid share to a person of whom
they do not approve, (b) any transfer of
a share to more than four joint holders,
and (c) any transfer of a certificated share
unless accompanied by the share certificate
and such other evidence of title as may
reasonably be required. The registration
of transfers of shares may be suspended
at such times and for such periods (not
exceeding 30 days in each year) as the
Directors may determine.
Transfer instruments for certificated
shares are executed by or on behalf of the
transferor and, in cases where the share
is not fully paid, by or on behalf of the
transferee.
The Articles contain provisions designed
to facilitate the Company’s participation
in the Euroclear Bank settlement system
and to facilitate the exercise of rights in the
Company by holders of interests in ordinary
shares that are held through the Euroclear
Bank system. The holding and transfer of
ordinary shares through the Euroclear Bank
system is additionally subject to the rules
and procedures of Euroclear Bank and
applicable Belgian law and (for interests in
ordinary shares held in CDI form) those of
CREST.
Rules concerning the appointment
and replacement of the Directors
and amendment of the Company’s
Articles
Unless otherwise determined by ordinary
resolution of the Company, the number
of Directors shall not be less than two or
more than 14. Subject to that limit, the
shareholders in general meeting may
appoint any person to be a Director either
Corporate
Governance
Business
& Strategy
Financial
Statements
85
Directors’ Report
(continued)
to fill a vacancy or as an additional Director.
The Directors also have the power to co-opt
additional persons as Directors, but any
Director so co-opted is under the Articles
required to be submitted to shareholders
for re-election at the first Annual General
Meeting following his or her co-option.
The Articles require that at each Annual
General Meeting of the Company one-third
of the Directors retire by rotation. However,
in accordance with the recommendations
of the UK Corporate Governance Code, the
Directors have resolved they will all retire
and submit themselves for re-election by the
shareholders at the Annual General Meeting
to be held this year.
The Company’s Articles may be amended by
special resolution (75% majority of votes cast)
passed at a general meeting.
Powers of Directors
Under its Articles, the business of the
Company shall be managed by the Directors,
who exercise all powers of the Company
as are not, by the Companies Acts or the
Articles, required to be exercised by the
Company in general meeting.
The powers of Directors in relation to issuing
or buying back by the Company of its shares
are set out above under “Issue of Shares and
Purchase of Own Shares”.
Change of control and related
matters
Certain of the Group’s borrowing facilities
include provisions that, in the event of a
change of control of the Company, could
oblige the Group to repay the facilities.
Certain of the Company’s customer
and supplier contracts and joint venture
arrangements also contain provisions that
would allow the counterparty to terminate
the agreement in the event of a change of
control of the Company. The Company’s
Executive Share Option Scheme and Long-
Term Incentive Plan each contain change
of control provisions which allow for the
acceleration of the exercise of share options/
awards in the event of a change of control of
the Company.
There are no agreements between the
Company and its Directors or employees
providing for compensation for loss of
office or employment (whether through
resignation, purported redundancy or
otherwise) that occurs because of a
takeover bid in excess of their normal
contractual entitlement.
Shareholder Rights Directive II
On 20 March 2020, the provisions of the
Shareholders’ Rights Directive II (SRD II)
became law in Ireland with the publication of
the European Union (Shareholders’ Rights)
Regulations 2020 (SRD II Regulations). The
SRD II Regulations apply with effect from 30
March 2020.
SRD II Regulations codify that Irish
companies must seek shareholder approval
of a remuneration report annually; and, an
advisory remuneration policy once every
four years. The Group is, in effect, already
in compliance with this requirement having
provided shareholders with the opportunity
to opine on the Group’s remuneration report
annually since 2010; and also in providing
shareholders with an advisory vote on the
Group’s Remuneration Policy. The 2021
Remuneration Policy (“policy”) was put to
our shareholders on an advisory basis at
last year’s AGM.
Political Donations
No political donations were made by
the Group during the year that require
disclosure in accordance with the Electoral
Acts, 1997 to 2002.
Accounting Records
The measures taken by the Directors to
secure compliance with the requirements
of Sections 281 to 285 of the Companies
Act 2014 with regard to the keeping of
adequate accounting records are to employ
accounting personnel with appropriate
qualifications, experience and expertise
and to provide adequate resources to the
finance function. The books of account of the
Company are maintained at the Group’s office
in Bulmers House, Keeper Road, Crumlin,
Dublin 12, D12 K702.
Auditor
In accordance with Section 383(2) of the
Companies Act 2014, the auditor, Ernst &
Young, Chartered Accountants, will continue
in office. Ernst & Young were first appointed
as the Company’s auditor during the financial
year ending 28 February 2018 following a
tender process. The Company is committed
to mandatory tendering every ten years.
Further details are set on page 104.
Disclosure of Information to the Auditor
In accordance with Section 330 of the
Companies Act 2014, the Directors confirm
that, so far as they are each aware, there is no
relevant audit information, being information
needed by the auditor in connection
with preparing their report, of which the
Company’s auditor is unaware. Having
made enquiries with fellow Directors and the
Company’s auditor, each Director has taken
all the steps that they ought to have taken as
a Director to make themselves aware of any
relevant audit information and to establish
that the Company’s auditor is aware of that
information.
Directors’ Compliance Statement
(Made In Accordance With Section
225 of the Companies Act 2014)
The Directors acknowledge that they are
responsible for securing compliance by the
Company with its relevant obligations as
are defined in the Companies Act 2014 (the
‘Relevant Obligations’).
The Directors confirm that they have drawn up
and adopted a compliance policy statement
setting out the Company’s policies that, in
the Directors’ opinion, are appropriate to the
Company with respect to compliance by the
Company with its relevant obligations.
86 C&C Group plc Annual Report 2022
The Directors further confirm the Company
has put in place appropriate arrangements
or structures that are, in the Directors’
opinion, designed to secure material
compliance with its relevant obligations
including reliance on the advice of persons
employed by the Company and external
legal and tax advisers as considered
appropriate from time to time and that they
have reviewed the effectiveness of these
arrangements or structures during the
financial year to which this report relates.
Financial Instruments
In the normal course of business, the Group
has exposure to a variety of financial risks,
including foreign currency risk, interest
rate risk, liquidity risk, and credit risk. The
Company’s financial risk objectives and
policies are set out in Note 24 of the financial
statements.
Post Balance Sheet Events
On 17 May 2022, the Group announced the
sale of its joint venture investment in Admiral
Taverns, to Proprium Capital Partners for
a total consideration of €65.8m (£55.0m)
payable in three tranches during FY2023,
subject only to FCA approval. Admiral
Taverns was classified as an asset held for
sale as at 24 February 2022.
There were no other events affecting the
Group that have occurred since the year
end which would require disclosure or
amendment of the consolidated financial
statements.
Annual General Meeting
Your attention is drawn to the letter to
shareholders and the notice of meeting
accompanying this report which set
out details of the matters which will be
considered at the Annual General Meeting.
In particular, please ensure to read additional
disclosures relating to restrictions at the
Annual General Meeting due to government
and health authority guidance on COVID-19
social distancing.
Other Information
Other information relevant to the Director’s
Report may be found in the following sections
of the Annual Report:
Information Location in the Annual Report
Results Financial Statements – pages 147 to 153.
Principal risks & uncertainties including
risks associated with recent emergence of
COVID-19
Principal Risks & Uncertainties – pages 34
to 45.
Directors’ remuneration, including the
interests of the directors and secretary in the
share capital of the Company
Directors’ Remuneration Committee Report
– pages 116 to 135.
Long-Term Incentive Plan, share options and
equity settled incentive schemes
Directors’ Remuneration Committee Report
– pages 116 to 135.
Significant subsidiary undertakings Financial Statements – Note 29.
Director biographies and Board composition Directors and Officers – pages 88 to 89.
Audit Committee Report Pages 100 to 105.
The Directors’ Report for the year ended 28
February 2022 comprises these pages and
the sections of the Annual Report referred to
under ‘Other information’ above, which are
incorporated into the Directors’ Report by
reference.
Signed
On behalf of the Board
David Forde Patrick McMahon
Group Chief
Executive Officer
Group Chief
Financial Officer
17 May 2022
Corporate
Governance
Business
& Strategy
Financial
Statements
87
1. Stewart Gilliland
Chair
Stewart Gilliland (65) was appointed a Non-
Executive Director of the Company in April
2012 and Chair in July 2018. Stewart is also
Chair of the Nomination Committee. From
2006 to 2010 he was Chief Executive Officer
of Müller Dairy (UK) Ltd. Prior to that, he held
positions at Whitbread Beer Company and
at Interbrew SA in markets including the UK,
Ireland, Europe and Canada. He is currently
a Non-Executive Director and member of
the Corporate Responsibility Committee
and Nomination Committee at Tesco plc,
a Non-Executive Director and Chair of the
Remuneration Committee at Natures Way
Foods Limited and a Non-Executive Director of
Chapel Down plc. Stewart is also Chair of the
Board and Nomination Committee at IG Design
Group plc. He is a former Non-Executive
Director of Booker Group plc, Mitchells &
Butlers plc, Sutton & East Surrey Water plc,
Vianet Group plc and Tulip Limited.
2. David Forde
Group Chief Executive Officer
David Forde (54) was appointed Group Chief
Executive Officer in November 2020. Prior to
joining the Company, David was the Managing
Director of Heineken UK, a leading producer
of beer and cider brands in the UK market,
as well as a significant pub operator, with
approximately 2,500 outlets in its estate. David
worked with Heineken for 31 years and had
extensive experience in senior leadership
positions across the business. He started
his career with the Sales and Marketing
team at Heineken Ireland, before gaining
international experience in the Netherlands
and then Poland, where he was Marketing
Director. Progressing to senior leadership,
David was appointed General Manager of
Heineken UK in 2007 and played a key role in
Heineken's acquisition of Scottish & Newcastle
in 2008 and the subsequent integration of
the two businesses. In 2009, David returned
to Heineken Ireland as Managing Director,
before being appointed Managing Director of
Heineken UK in 2013.
Directors and Officers
3. Patrick McMahon
Group Chief Financial Officer
Patrick McMahon (42) was appointed Group
Chief Financial Officer in July 2020. He has
held a number of senior management positions
within the food and beverage sector across
the UK, Ireland and North America over the
past 15 years. Having originally joined C&C in
2005 his previous roles include Group Finance
Director, Finance Director of a number of
C&C’s business units and most recently, Group
Strategy Director prior to his appointment as
Group CFO. Patrick is a Fellow of Chartered
Accountants Ireland, having trained at KPMG,
and a member of the ESG Committee.
4. Vineet Bhalla
Independent Non-Executive Director
Vineet Bhalla (49) was appointed a Non-
Executive Director of the Company in April
2021. Vineet is a highly experienced digital
professional, with over 25 years of experience
across defence, consumer goods, health
and retail sectors. Until March 2021, Vineet
was Chief Technology Officer and a Senior
Vice President at Burberry plc. He previously
held global roles for Unilever as Head of
IT for their digital marketing and research
and development divisions and had led
data-driven and digital transformations at
scale. Prior to Unilever, Vineet held global
technology positions at Diageo enabling
data driven transformation of their UK and
Ireland Customer Development Teams. Vineet
currently holds a Non-Executive Director
position at Moorfields Eye Hospital NHS
Foundation Trust and serves as Chair of the
Trust’s People and Culture Committee. Vineet
brings strong digital transformation skills to the
Board.
5. Jill Caseberry
Independent Non-Executive Director
Jill Caseberry (57) was appointed a Non-
Executive Director of the Company in February
2019, a member of the Remuneration
Committee in March 2019 and a member of
the ESG Committee in September 2020. Jill
has extensive sales, marketing and general
management experience across a number of
blue chip companies including Mars, PepsiCo
and Premier Foods. Jill is a Non-Executive
Director, Chair of the Remuneration Committee
and member of the Audit and Nomination
Committee at Bellway plc and at Halfords plc.
Jill is also a Non-Executive Director, designated
Employee Engagement Non-Executive
Director and a member of the Remuneration
and Nomination Committees at Bakkavor plc
and Senior Independent Director, Chair of
the Remuneration Committee and member
of the Audit and Nomination Committees of
St. Austell Brewery Company Limited. Jill
brings considerable experience of brand
management and marketing to the Board.
6. Vincent Crowley
Independent Non-Executive Director
Vincent Crowley (67) was appointed as a
Non-Executive Director of the Company in
January 2016 and as Senior Independent
Director in June 2019. He is a member of
the Audit Committee and the Nomination
Committee. Vincent was previously both
Chief Operating Officer and Chief Executive
Officer of Independent News and Media plc,
a leading media company. He also served
as Chief Executive Officer and subsequently
as a Non-Executive Director of APN News &
Media, a media company listed in Australia
and New Zealand. He initially worked with
KPMG in Ireland. Vincent is currently Chair of
Altas Investments plc and a Non-Executive
Director of Grafton Group plc. Vincent brings
considerable domestic and international
business experience across a number of
sectors to the Board.
1 3 4 62 5
88 C&C Group plc Annual Report 2022
7. Ralph Findlay
Non-Executive Director
Ralph Findlay (61) was appointed a Non-
Executive Director of the Company in March
2022 and will succeed Stewart Gilliland as
Chair following C&C’s AGM in July 2022.
Ralph served as Chief Executive Officer of
Marston’s, the UK pub group, for 20 years.
Most recently, Ralph guided Marston’s through
the successful sale of its brewing business into
a £780m joint venture with Carlsberg in May
2020. Ralph served on the Marston’s Board
from 1996, having previously held the role
of Finance Director before being appointed
Chief Executive Officer in 2001. Ralph was
appointed a Non-Executive Director of Vistry
Group plc in 2015 and has served as Senior
Independent Director since January 2020. He
also previously served as Chair of the British
Beer and Pub Association (‘BBPA’).
8. Emer Finnan
Independent Non-Executive Director
Emer Finnan (53) was appointed as a
Non-Executive Director of the Company
in May 2014, became Chair of the Audit
Committee in July 2015 and is a member of
the Nomination Committee. She is President,
Europe of Kildare Partners, a private equity
firm based in London and Dublin, where she
is responsible for investment origination in
Europe, a Non-Executive Director of Britvic
plc and a Non-Executive Director of Ireland
Funds for Great Britain. After qualifying as
a chartered accountant with KPMG, she
worked in investment banking at Citibank
and ABN AMRO in London and then NCB
Stockbrokers in Dublin. In 2005 she joined
EBS Building Society in Ireland, becoming its
Finance Director in early 2010. In September
2012, Emer re-joined NCB Stockbrokers to
lead a financial services team in Ireland. She
joined Kildare Partners in 2013. She brings
considerable financial expertise to the Board.
9. Helen Pitcher OBE
Independent Non-Executive Director
Helen Pitcher (64) was appointed a Non-
Executive Director of the Company in
February 2019 and Chair of the Remuneration
Committee in March 2019. Helen is a member
of the ESG Committee and Nomination
Committee. Helen is currently Chair of a
leading board effectiveness consultancy,
Advanced Boardroom Excellence Ltd, Chair
of the Criminal Cases Review Commission, a
Non-Executive Director at United Biscuits UK,
Senior Independent Director at One Health
Group Ltd and Chair of its Remuneration
and Nominations Committees, President of
INSEAD Directors Network Board (IDN) and
a Chair of INSEAD Directors Club Limited.
Helen is the President of Kids Out (a National
Children’s Charity) and sits on the Advisory
Board for Leeds University Law Faculty.
Helen was previously Chair of the Queens
Counsel Selection Panel, and a Board member
and Remuneration Chair for the CIPD. In
Helen’s earlier career she was part of Grand
Metropolitan plc as a Divisional Director
(Board Director, Clifton Inns Ltd). In 2015 Helen
Pitcher was awarded an OBE for services to
business. Helen brings a wealth of experience
and knowledge of governance and board
effectiveness in a variety of sectors, including
the drinks industry, to the Board.
10. Jim Thompson
Independent Non-Executive Director
Jim Thompson (61) was appointed a Non-
Executive Director of the Company, a member
of the Audit Committee in March 2019 and
Chair of the ESG Committee in September
2020. Jim serves on the board of Directors of
Millicom International Cellular SA. He has been
a Guest Lecturer at the MBA Programmes at
the University of Virginia, Columbia University
and George Washington University. He
holds an MBA from the Darden School at
the University of Virginia where he received
the Faculty Award for academic excellence.
He has previously worked at Southeastern
Asset Management, Mackenzie and Bryant
Asset Management. Jim brings substantial
international investment management
experience to the Company.
11. Mark Chilton
Company Secretary & Group General
Counsel
Mark Chilton (59) joined the Group in January
2019 as Company Secretary and Group
General Counsel. Mark was Company
Secretary and General Counsel of Booker
Group plc from 2006 until 2018. Mark qualified
as a solicitor in 1987.
8 107 9 11
For information on independence of the
Directors, please see Directors’ Statement
of Corporate Governance on pages 90 to
99.
Board Committees
Audit Committee
Emer Finnan (Chair)
Vincent Crowley
Jim Thompson
Nomination Committee
Stewart Gilliland (Chair)
Emer Finnan
Vincent Crowley
Helen Pitcher
Remuneration Committee
Helen Pitcher (Chair)
Jill Caseberry
Vineet Bhalla
ESG Committee
Jim Thompson (Chair)
Jill Caseberry
Helen Pitcher
Patrick McMahon
Senior Independent Director
Vincent Crowley
Corporate
Governance
Business
& Strategy
Financial
Statements
89
Dear Shareholder,
On behalf of the Board I am
pleased to present the FY2022
Corporate Governance Report,
which provides an overview of
the Board’s activities during the
year, along with our governance
arrangements.
This will be my last report as your Chair,
having served on the board for ten years
by the time I step down in July 2022. It
has been an absolute privilege to serve as
Chair. C&C is a unique, agile and customer-
centric business, driven by dedicated and
passionate people. I am proud of how C&C
has not only navigated the pandemic in such
a resilient manner, but has adapted and built
back even stronger leaving it extremely well
positioned for the future. I am delighted to
hand over to someone of Ralph Findlay’s
calibre and passion for our industry. His
deep understanding of the beverage and
hospitality sector in the UK, one of our core
markets, and extensive listed company
board experience, will serve the Company
well as it leads the recovery in the post-
pandemic era, complementing and adding to
the skills of the existing Board and leadership
team.
Board Activities in the year
Our purpose at C&C is to play a role in
every drinking occasion, delivering joy to
our customers and consumers. Our ability
to deliver this for large parts of the year, was
heavily impacted by the unprecedented
impact of COVID-19. As a Board, we
have remained focused on guiding the
Groupthrough this period of sustained
uncertainty and ensuring we are well
positioned for the recovery work, which has
been underpinned by our robust governance
framework.
A large part of the Board’s focus during the
year has therefore remained on liquidity, with
the completion of the £151.2m (€176.3m)
rights issue in June 2021, in addition to a
cost reduction programme. To better support
management on this matter, a Rights Issue
Sub-Committee was created, of which I was
a member, to ensure that we were taking
the most appropriate approach, for both
C&C and our shareholders. The Board has
acted decisively to make sure C&C navigated
the impact of the pandemic with a view to
ensure it is in a position to execute its proven
long-term strategy that will deliver strong
shareholder value in future.
We have needed to call on the extensive
skills and experience of the entire Board
when navigating the period and our
robust governance framework has been
fundamental to our ability to do this
successfully. We have met more frequently
than usual, both as a full Board, but also
within our various Committees, and with the
added challenge of doing so remotely for
the most part. The Board and our company
secretarial team during this time have worked
tirelessly in order to ensure the safety of all
our employees and the best outcome for all
stakeholders.
Corporate Governance Report
Changes to the Board
The Board plans for its own succession, with
the support of the Nomination Committee.
The Committee remains focused, on behalf
of the Board, on Board succession planning
for both Executive and Non-Executive
Directors.
The Committee aims to ensure that:
• the succession pipeline for senior
executive and business critical roles in the
organisation is strong and diverse;
• processes are in place to identify potential
successors and manage succession
actively;
• there is a structured approach to
developing and preparing possible
successors; and
• processes are in place to identify “at risk”
posts.
There have been a number of changes to
the Board since the last Annual Report.
Andrea Pozzi stepped down from the Board
on 1 September 2021 and Jim Clerkin
resigned as a director on 27 October 2021.
Raplh Findlay joined us as an Independent
Non-Executive Director and Chair designate
on 1 March 2022 and will succeed me as
Chair on 7 July 2022. I have been working
closely with Ralph to ensure there is a
smooth handover.
Sustainability
In 2021, we continued our structured and
ambitious programme of improvement
to ensure we meet our ESG vision of
“Delivering to a better world!”. Key
milestones in our sustainability journey over
the last year include the achievement of
our target of being out of single use plastic
on our canned products, the switch to
renewable sources for the electricity used
at our main sites and the installation of the
largest rooftop solar panel farm in Ireland
at Clonmel
. In 2021, we submitted our
emission reduction targets to the Science
Based Targets initiative (‘SBTi’) for validation.
This will be secured by the end of 2023 at
the latest.
90 C&C Group plc Annual Report 2022
Diversity
As a people focused business, our strength
comes from an inclusive and welcoming
environment, where we recognise that the
experiences and perspectives which make
us unique come together in our shared
values and vision. We strongly believe that
the more our people reflect the diversity
of our clients and consumers, the better
equipped we are to service their needs.
Ensuring that we have a culture which
promotes and values diversity, and one
which is maintained throughout the
business, is a continual prime focus and is
underpinned by our Diversity and Inclusion
(‘D&I’) Policy, which sets out our objectives
across the organisation. The importance
of this area also forms the basis for Board
diversity and succession planning as we
consider the best constitution of the Board
to successfully take the Company forward,
and link to the Company’s strategy.
At the fiscal year-end, 33% of the Board’s
membership was female. The Committee
was fully aware that this level reduced with
the appointment of Ralph Findlay and will
go back to 33% once I step down from the
Board in July 2022. Further details about our
overall approach to diversity and inclusion
can be found in the Nomination Committee
Report on page 112.
Stakeholders
We have sought to balance the needs of
our numerous stakeholders throughout
the year, be they employees, communities,
consumers, customers, suppliers,
shareholders or regulators, while taking
steps to secure the Group’s longer-term
success. There has been a constant
dialogue with all of the main stakeholder
groups, and on behalf of the Board, I would
like to take this opportunity to thank them
all for their partnership during this very
challenging period. Working together has
been vital and will continue to be so as we
seek a sustainable future together.
Details of the methods we have used to
engage with stakeholders to understand
their views can be found on pages 8
to 9. A statement on how the Directors
have had regard to the matters set out in
section 172 of the Companies Act 2006
can be found on page 93.
Board Evaluation
To ensure that the Board and its
Committees continue to operate
effectively, we evaluate the performance
of the Board on an annual basis. During
FY2020, an external evaluation was
carried out, meaning that the evaluation
in FY2022 was carried out on an internal
basis as part of the FY2022 internal
Board evaluation process. An explanation
of how this process was conducted,
the conclusions arising from it and the
outcome of that review can be found on
page 98.
UK Corporate Governance Code
The Corporate Governance Report,
which incorporates by reference
the Responsibility Report, the Audit
Committee Report, the ESG Committee
Report, the Nomination Committee
Report (which contains the Diversity
Report) and the Directors’ Remuneration
Committee Report, describes how
the Company has complied with the
provisions of the Code. Further details on
the Company’s compliance with the Code
during FY2022 can be found below.
The following pages set out details of the
composition of our Board, its corporate
governance arrangements, processes
and activities during the year, and reports
from each of the Board’s Committees.
I wish all at C&C the very best success for
the future.
Stewart Gilliland
Chair
Compliance with the UK Corporate
Governance Code
The Board considers that the Company
has, throughout FY2022 complied with the
provisions of the Code with the exception
of provision 19 of the Code. At the time
of the announcement of David Forde’s
appointment as CEO in November 2020,
the Board extended Stewart Gilliland’s role
as Non-Executive Chair by an additional 12
months until the AGM in 2022. At the date of
publication of this Report, Stewart Gilliland will
have been in post as a Director longer than
nine years from the date of his appointment
in April 2012, resulting in a non-compliance
with provision 19 of the Code. Further details
can be found on page 110 of the Nomination
Committee Report.
Leadership and Company Purpose
Role of the Board
The Company is led and controlled by the
Board of Directors (‘the Board’) chaired by
Stewart Gilliland.
The core responsibility of the Board is to
ensure the Group is appropriately managed
to achieve its long-term objectives, generating
value for shareholders and contributing to
wider society. The Board’s objective is to do
this in a way that is supported by the right
culture and behaviours.
The Board has adopted a formal schedule of
matters specifically reserved for decision by
it, thus ensuring that it exercises control over
appropriate strategic, financial, operational
and regulatory issues (a copy of the schedule
of reserved matters is available on our
website). Matters not specifically reserved
for the Board and its Committees under its
schedule of matters and the Committees’
terms of reference, or for shareholders in
general meeting, are delegated to members of
the Executive Committee.
The balance of skills, background and
diversity of the Board contributes to the
effective leadership of the business and
the development of strategy. The Board’s
composition is central to ensuring all directors
Corporate
Governance
Business
& Strategy
Financial
Statements
91
contribute to discussions. As a means to
foster challenge and director engagement,
led by the Senior Independent Director, the
Non-Executive Directors meet without the
Chair present at least annually. Likewise,
the Chair holds meetings with the Non-
Executive Directors without the executives
present. In each of these settings, there
is a collegiate atmosphere that also lends
itself to a level of scrutiny, discussion and
challenge.
The Company has procedures hereeby
Directors (including Non-Executive Directors)
receive formal induction and familiarisation
with the Group’s business operations
and systems on appointment, including
trips to manufacturing sites with in-depth
explanations of the processes involved at
the site.
Our Purpose and Strategy
C&C is a leading, vertically integrated
premium drinks company, which
manufactures, markets and distributes
branded beer, cider, wine, spirits and soft
drinks across the UK and Ireland. The Board
considers C&C’s purpose is to play a role in
every drinking occasion, delivering joy to our
customers and consumers with remarkable
brands and service. Further detail on the
Group’s purpose can be found on page 6.
Corporate Governance Report
(continued)
Information on our strategy is set out on
pages 24 to 25.
Our Culture and Values
C&C has an open, humble, respectful, but
competitive culture, underpinned by certain
values and behaviours, namely:
Our Values
• We respect people and the planet
• We bring joy to life
• Quality is at our core
Our Behaviours
• We put safety first
• We are customer centric
• We collaborate through trust
• We keep it simple and remain agile
• We are fact based, data and insight driven
• We learn to improve
The Board recognises the importance of
communication and engagement with the
wider workforce as a means of assessing
and monitoring culture. The role and
effectiveness of the Board and the culture
it promotes are essential to a successfully
run company. The Board has appointed a
Non-Executive Director to each business
unit to provide a link between the Board and
the Group’s workforce, so that employees’
views are heard in the boardroom, as well as
facilitating a better understanding of business
units and functions, within the organisation.
During FY2022, the engagement of the Non-
Executive Directors with employees from
each business area through a series of forum
meetings has provided invaluable insight into
the evolution of our culture and values, and
their link to strategy. The assignment between
each Non-Executive Director and their
corresponding business area can be found on
page 95. Employee surveys formed the basis
of questions raised with the Non-Executive
Directors and views on what the Group could
improve in its response to help the business
and its employees. Participants were also
invited to raise matters for direct feedback to
and from Non-Executive Directors. The format
of engagement proved successful and was
endorsed by the Board as an extremely useful
feedback mechanism.
The Group’s culture is based upon being
open, humble, respectful, yet competitive.
The Board with support from its committees,
monitors the alignment of the Group’s culture
with our purpose, values and strategy,
through a variety of mechanisms, cultural
indicators and reporting lines, including those
summarised below.
Cultural Indicators
Health and Safety Employees Ethics and Compliance Customers and Suppliers Sustainability
• Lost time frequency
rates
• Workplace safety
accident rates
• Reporting of
injuries, diseases
and dangerous
occurrences
(‘Riddors’)
• Employee “town hall”
meetings/face to face
meetings
• Results of employee
engagement surveys
• Employee turnover
rates
• Gender pay gap
disclosures
• Reports on progress
on equality, diversity
and inclusion
• Internal audit reports
and findings
• Fraud and
misconduct statistics
• Annual confirmation of
compliance with our
anti-financial crime
policies
• Whistle blower
statistics
• Compliance with
supply chain
standards
• Customer retention
rates
• Supplier audits
• Brand satisfaction
ratings
• Greenhouse gas
emissions
• Waste reduction rates
92 C&C Group plc Annual Report 2022
Engagement with Shareholders
Information on relations with shareholders
is provided as part of the Stakeholder
engagement section of the Strategic Report
on pages 8 to 9.
In fulfilling their responsibilities, the Directors
believe that they govern the Group in
the best interests of shareholders, whilst
having due regard to the interests of
other stakeholders in the Group including
customers, employees and suppliers.
The Code encourages a dialogue with
institutional shareholders with a view
to ensuring a mutual understanding of
objectives. The Executive Directors have
regular and ongoing communication with
major shareholders throughout the year,
by participating in investor roadshows and
presentations to shareholders. Feedback
from these visits is reported to the Board.
The Executive Directors also have regular
contact with analysts and brokers. The
Chair, Senior Independent Non-Executive
Director and other Non-Executive Directors
receive feedback on matters raised at the
meetings with shareholders and are offered
the opportunity to attend meetings with
major shareholders. As a result of these
procedures, the Non-Executive Directors
believe that they are aware of shareholders’
views. In addition, Vincent Crowley, the
Senior Independent Non-Executive Director,
is available to meet with major shareholders.
Arrangements can also be made through
the Company Secretary for major
shareholders to meet with newly appointed
Directors.
The Group maintains a website at www.
candcgroup.com which is regularly updated
and contains information about the Group.
Stakeholders
The Code provides that the Board should
understand the views of the Company’s key
stakeholders other than shareholders and
describe how their interests and the matters
set out in section 172 of the UK Companies
Act 2006 (‘s.172’) have been considered in
Board discussions and decision making.
Whilst s.172 is a provision of UK company
law, the Board acknowledges that as
a premium listed issuer, it is important
to address the spirit intended by these
provisions.
Section 172 Statement
A director of a company must act in a way
they consider, in good faith, would most
likely promote the success of the company
for the benefit of its members as a whole,
taking into account the factors as listed in s.
172. This is not a new requirement, and the
Board has always considered the impact of
its decisions on stakeholders. We set out
below some examples of how the Board
has done so in relation to four decisions
during the year. Details of who the Board
considers the main stakeholders are, how
we have engaged with them during the year
and the outcomes of the process are set out
on pages 8 to 9 and forms part of the s.172
statement.
Key decision Stakeholders
Transforming the GB business
In July 2021, the Board approved the simplification of the GB organisational structure, creating one GB business unit,
simplifying and integrating the structure, aligning our three trading businesses in GB under one management team.
The Board invested significant time to consider this decision, assessing a number of factors including: commercial
implications; operational impact and people risk. In doing so, the Board’s decision focused on the strategic rationale
for the changes, principally the overlap in terms of operational footprint and management between the three existing
trading businesses and the need to simplify this to ensure the business remains competitive and position it for further
future success.
The Board has given its full support to management with respect to the significant change programme that is being
employed to simplify and integrate the combined GB businesses. The integration of the businesses is a strategic
priority for the Group and through regular updates from management, the Board is satisfied that decisions made
were in the best interests of employees and the needs of the Group’s other stakeholders. A key priority being that
employees affected were treated with respect and sensitivity and where possible the Group took action to help
mitigate the affect of any redundancies. The Board are satisfied that their decision to support management was in
safeguarding the future success of the Group and believe the investment will be transformative for all stakeholders.
• Customers
• Employees
• Shareholders
• Suppliers
Online AGM
In view of lockdown measures then in force, to ensure that our shareholders were enfranchised with an opportunity
to participate in and ask questions at the Company’s Annual General Meeting held in July 2021, the Board made
appropriate arrangements to facilitate an online AGM. It is the Board’s intention to continue to provide facilities for
shareholders to follow the AGM to be held in July 2022 online, and, if well subscribed to continue to offer online
facilities in the future.
• Employees
• Shareholders
• Government
and regulators
Corporate
Governance
Business
& Strategy
Financial
Statements
93
Key decision Stakeholders
Disposal of the Vermont Hard Cider Company
In March 2021, the Board approved the sale of Vermont Hard Cider Company, for a total consideration of $20m. In
deciding whether the disposal supported the long-term success of the Group, and with due regard to the interests
of the Group’s stakeholders, the Board evaluated the contribution of the business, its growth prospects and fit with
the overall strategy of the Group. In consideration of these matters, the Board considered the potential impact of
the sale on the Company’s stakeholders, and in particular, the impact on the employees of the Vermont Hard Cider
Company. It was determined, at the time the decision was made, that the employees of the Vermont Hard Cider
Company would not be materially disadvantaged by the change in ownership, and jobs would be protected as part
of the sale. Following evaluation of these factors, it was determined that the sale of the business was in the best
interests of the Group and its stakeholders as a whole.
• Employees
• Shareholders
Rights Issue
As part of risk mitigation measures in response to COVID-19, the Board approved the decision to fundraise through
a Rights Issue. In formulating its decision, the directors took into account the views of the investor community
regarding potential investment, the short- and long-term requirements of the business which could impact on
employees and suppliers, and the protection of the interests of stakeholders as a whole. The merits of the Rights
Issue were considered, including that it would reduce leverage, enhance liquidity and strengthen the Group’s
position, ensuring that C&C remains resilient in the event of further negative developments in COVID-19. Recognising
the value C&C places on its retail investors and providing them with an opportunity to participate in the equity raise
alongside institutional investors, the Board concluded that it was in the best interests of shareholders, as well as the
Group’s wider stakeholder community and was accordingly approved by the Board.
• Employees
• Customers
• Suppliers
• Shareholders
• Governments
and regulators
Corporate Governance Report
(continued)
Division of Responsibilities
It is the Group’s policy that the roles of the
Chair and Group Chief Executive Officer are
separate, with their roles and responsibilities
clearly divided and set out in writing
(available on our website).
Chair
The Chair, Stewart Gilliland is responsible
for the leadership of the Board and
ensuring effectiveness in all aspects of its
role. The Chair is responsible for ensuring,
through the Company Secretary that
Directors receive accurate, timely and clear
information. He is responsible for setting
the Board’s agenda and ensuring adequate
time is available for Board discussion and
to enable informed decision making. He is
responsible for encouraging and facilitating
the effective contribution of Non-Executive
Directors and constructive relations between
Executive and Non-Executive Directors.
Ralph Findlay will assume the role of Chair
on 7 July 2022, at which point Stewart
Gilliland will step down from the Board.
Senior Independent Director
Vincent Crowley is the Senior Independent
Non-Executive Director. In addition
to his role and responsibilities as an
Independent Non-Executive Director, the
Senior Independent Director is available
to shareholders where concerns have not
been resolved through the normal channels
of communication and for when such
contact would be inappropriate, which
became of particular importance during
the period that the Non-Executive Chair
served as interim Executive Chair. He acts
as a sounding board for the Chair and acts
as an intermediary for the Directors when
necessary. He is responsible for annually
evaluating the performance of the Chair in
consultation with the other Non-Executive
Directors.
Non-Executive Directors
The Non-Executive Directors provide an
external perspective, sound judgement
and objectivity to the Board’s deliberations
and decision making. With their diverse
range of skills and expertise, they support
and constructively challenge the Executive
Directors and monitor and scrutinise the
Group’s performance against agreed
goals and objectives. The Non-Executive
Directors together with the Chair meet
regularly without any Executive Directors
being present. The Non-Executive Directors
provide a conduit from the workforce to
the Board for workforce engagement and
have sufficient time to meet their board
responsibilities.
Chief Executive Officer
The Group Chief Executive Officer is
responsible for the leadership and day-
to-day management of the Group. This
includes formulating and recommending
the Group’s strategy for Board approval in
addition to executing the approved strategy.
94 C&C Group plc Annual Report 2022
Company Secretary
Mark Chilton, as Company Secretary,
supports the Chair, the Group Chief
Executive Officer and the Board Committee
Chairs in setting agendas for meetings of the
Board and its Committees. He is available
to all Directors for advice and support. He is
responsible for information flows to and from
the Board and the Board Committees and
between Directors and senior management.
In addition, he supports the Chair in respect
of training and the Board and Committee
performance evaluations. He also advises
the Board on regulatory compliance and
corporate governance matters.
Board Committees
The Board has established an Audit
Committee, an ESG Committee, a
Nomination Committee and a Remuneration
Committee to oversee and debate relevant
issues and policies outside main Board
meetings. Throughout the year, the Chair of
each Committee provided the Board with
a summary of key issues considered at the
Committee meetings. Board Committees
are authorised to make enquiries of the
Executive Directors and other executives
across the Group as they feel appropriate
and to engage the services of external
advisers as they deem necessary in the
furtherance of their duties at the Company’s
expense.
The Audit Committee Report is on pages
100 to 105, the ESG Committee Report
is on pages 106 to 107, the Nomination
Committee Report is on pages 108 to 115
and the Directors’ Remuneration Committee
Report is on pages 116 to 135.
Workforce Engagement
The Board has appointed a Non-Executive
Director to each business unit to understand
employee’s views. The following are the
units assigned to each of the Non-Executive
Directors:
Business Unit Non-Executive Director
CoSec/Legal and Group Communications Jim Thompson
Finance Emer Finnan
GB Jill Caseberry
HR Helen Pitcher
Ireland Vincent Crowley
IT Vineet Bhalla
Operations Helen Pitcher
Our Forum sessions were again held in November 2021 and February 2022. Hosted by
Executive Committee members and Non-Executive Directors (‘NED’). These sessions provide
a short business update, with the key focus being to answer any questions / concerns that
colleagues have about C&C. Our Forums build on existing employee engagement opportunities
and the Group’s continuing efforts to develop a culture of informality, transparency, and trust.
The aim is to provide a further opportunity to increase two-way dialogue between the company
and all staff. They also allow our NEDs to hear directly from colleagues and feedback to the
C&C Board. Our Forum sessions will be held regularly (quarterly at a minimum) across our sites
in UK and Ireland during FY2023.
Board Meetings in FY2022
The Directors’ attendance at Board meetings during the year is shown below. The core
activities of the Board and its Committees are covered in scheduled meetings held during
the year. Additional ad hoc meetings are also held to consider and decide matters outside
scheduled meetings. There were 10 Board meetings, 13 Audit Committee meetings, 6 ESG
Committee meetings, 8 Nomination Committee meetings and 13 Remuneration Committee
meetings held in the year under review. There were 15 Rights Issue sub-committee meetings
to discuss, review and ultimately approve the Rights Issue. The Committee comprised Stewart
Gilliland, Vincent Crowley, Emer Finnan, David Forde and Patrick McMahon.
All Directors holding office at the time attended the 2021 AGM.
Director
Number of Meetings
Attended*
Maximum Possible
Meetings
% of Meetings
Attended
Executive
David Forde 10 10 100
Patrick McMahon 10 10 100
Andrea Pozzi
1
5 5 100
Non-Executive
Stewart Gilliland 10 10 100
Vineet Bhalla
2
8 9 89
Jill Caseberry
3
8 10 80
Jim Clerkin
1
8 8 100
Vincent Crowley 10 10 100
Emer Finnan 10 10 100
Helen Pitcher 10 10 100
Jim Thompson
4
8 10 80
1. Meetings attended by Andrea Pozzi and Jim Clerkin untill the date of their resignations from the Board.
2. Meetings attended by Vineet Bhalla from the date of his appointment. Vineet Bhalla was unable to attend one meeting
due to a family bereavement.
3. Jill Caseberry was unable to attend two unscheduled meeting due to the meetings being called at short notice and her
inability to re-arrange her schedule.
4. Jim Thompson was unable to attend one unscheduled meeting due to the meeting being called at short notice and his
inability to re-arrange his schedule and one other meeting due to a medical procedure.
Corporate
Governance
Business
& Strategy
Financial
Statements
95
Corporate Governance Report
(continued)
Leadership and People
• Continued to focus on the composition,
balance and effectiveness of the Board,
including the appointment of a Chair;
• Reviewed employee satisfaction survey
results and monitored culture throughout
the Group;
• Considered progress towards greater
diversity in the workforce;
• Received reports on engagements with
colleagues; and
• Monitored the ongoing impact of the
COVID-19 pandemic on our colleagues.
Safety
• Received and discussed six monthly
safety performance reports and updates
presented by the Group Health and
Safety Manager.
Internal Control and Risk Management
• Reviewed the Group’s risk management
framework and principal risks and
uncertainties;
• Reviewed and confirmed the Group’s
Viability Statement and going concern
status;
• Reviewed and validated the effectiveness
of the Group’s systems of internal controls
and risk management; and
• Reviewed updates on the information and
cyber security control environment in light
of the IT security incident in April 2021.
Governance and Legal
• Reviewed regular briefings on corporate
governance developments and legal and
regulatory issues;
• Approved the Group’s Modern Slavery
Statement for publication;
• Received reports on engagement with
institutional shareholders, investors and
other stakeholders throughout the year;
• Reviewed progress against the 2020
external Board evaluation action plan;
• Conducted an internal Board evaluation
covering the Board’s effectiveness, with
the outcome discussed by the Board;
• Approved revisions to the Terms of
Reference of the Committees;
• Received and reviewed whistleblowing
reports and activities; and
• Received regular reports from the Chairs of
the Audit, Nomination, Remuneration and
ESG Committees.
Objectives and Controls
The Group’s strategic objectives are set
out on pages 24 to 25 and a summary of
performance against the Group’s KPIs is at
pages 32 to 33. The Board also receives
regular updates across a broad range of
internal KPIs and performance metrics.
The Group has a clear risk management
framework in place, as set out on pages 34
to 45, to manage the key risks to the Group’s
business.
Business Model and Risks
The Group’s Business model is set out on
pages 26 to 29. The Risk Management
Report on pages 34 to 45 contains an
overview of the principal risks facing the
Group and a description of how they are
managed.
Whistleblowing
All employees have access to a confidential
whistleblowing service which provides an
effective channel to raise concerns. The Audit
Committee and the Board receives updates
detailing all notifications and subsequent
action taken.
Composition, Succession and
Evaluation
The Board consists of the Non-Executive
Chair, two Executive Directors and seven
independent Non-Executive Directors
including the Non-Executive Chair. This will
reduce to six independent Non-Executive
Directors when Stewart Gilliland steps down
from the Board in July 2022.
Over half of the Board comprises
independent Non-Executive Directors and
the composition of all Board Committees
complies with the Code, while also including
longer serving and more recently appointed
Directors. Additionally, the Chair was
considered independent on his appointment.
Details of the skills and experience of the
Directors are contained in the Directors’
biographies on pages 88 and 89.
Board activity during FY2022
Each Board meeting follows a carefully
tailored agenda agreed in advance by the
Chair, Group Chief Executive Officer and
Company Secretary. A typical meeting will
comprise reports on current trading and
financial performance from the CEO and
CFO, investor relations updates, monitoring
strategy, examining investment and
acquisition opportunities and presentations/
reports on specific subject areas. A
summary of the key activities covered during
FY2022 is set out in the table below.
Strategy, Operations and Finance
• Approved the Group’s Viability Statement;
• Received presentations from the COO
and management on brand marketing
plans;
• Received presentations from the CEO and
CFO and senior management on strategic
initiatives and trading performance;
• Approved the annual budget plan and
KPIs;
• Reviewed and approved the sale of
Vermont Hard Cider Company;
• Reviewed and approved the Group’s full
year FY2021 and half year FY2022 results
as well as trading updates;
• Approved the Group’s 2021 Annual
Report (including a fair, balanced and
understandable assessment) and 2021
AGM Notice;
• Received and reviewed updates from
senior management on the Group’s
sustainability strategy, related climate
change issues and efforts to meet TCFD
reporting requirements;
• Considered and approved the launch
of the Rights Issue to facilitate and
accelerate the Group’s recovery from the
impact of COVID-19; and
• Discussed the activity around making the
cost base more efficient through the move
to a one GB business.
96 C&C Group plc Annual Report 2022
The independence of Non-Executive
Directors is considered by the Board
and reviewed at least annually, based on
the criteria suggested in the Code. Non-
Executive Directors do not participate in any
of the Company’s share option or bonus
schemes.
Following this year’s review, the Board
concluded that all the Non-Executive
Directors continue to remain independent in
character and judgement and are free from
any business or other relationship that could
materially interfere with the exercise of their
independent judgement in accordance with
the Code.
Appointments to the Board
Recommendations for appointments to
the Board are made by the Nomination
Committee. The Committee follows Board
approved procedures (available on our
website together with a copy of the terms
of reference for the Nomination Committee)
which provide a framework for the different
types of Board appointments on which
the Committee may be expected to make
recommendations. Appointments are made
on merit and against objective criteria with
due regard to diversity (including skills,
knowledge, experience and gender).
All Board appointments are subject to
continued satisfactory performance
followings the Board’s annual effectiveness
review. The Nomination Committee leads
the process for Board appointments and
makes recommendations to the Board.
The activities of the Nomination Committee
and a description of the Board’s policy on
diversity are on pages 112 to 113.
Time Commitment and external
appointments
Following the Board evaluation process,
detailed further on page 98, the Board
has considered the individual Directors
attendance, their contribution and their
external appointments and is satisfied that
each of the Directors is able to allocate
sufficient time to the Group to discharge his
or her responsibilities effectively.
As evidenced by the attendance table earlier
in the report, the attendance remained high
and demonstrates the Directors’ ability to
devote sufficient time
In line with the Code, Directors are required
to seek Board approval prior to taking
on any additional significant external
appointments and the following were
approved during the year in line with these
requirements:
• Jill Caseberry’s appointment as a Non-
Executive Director and member of the
ESG, Nomination and Remuneration
Committees of Bakkavor plc;
• Emer Finnan’s appointment as a Non-
Executive Director and member of the
Audit, Nomination and Remuneration
Committees of Britvic plc; and
• Stewart Gilliland’s appointment as a Non-
Executive Director and Chair designate of
IG Design Group plc.
Prior to these appointments, the Board
considered the time required, including
whether it would impact their ability to
devote sufficient time to their current
role. The Board considered that the
appointments would not interfere with their
roles with the Group.
Development
On appointment, a comprehensive tailored
induction programme is arranged for each
new Director. The aim of the programme is
to provide the Director with a detailed insight
into the Group. The programme involves
meetings with the Chair, Group Chief
Executive Officer, Group Chief Financial
Officer, Company Secretary, Business
Unit MDs and key senior executives as
appropriate. It covers areas such as:
• the business of the Group;
• their legal and regulatory responsibilities
as Directors of the Company;
• briefings and presentations from
Executive Directors and other senior
executives; and
• opportunities to visit business operations.
To update the Directors’ skills, knowledge
and familiarity with the Group and its
stakeholders, visits to Group business
locations are organised for the Board
periodically, as well as trade visits with
members of senior management to assist
Directors’ understanding of the operational
issues that the business faces. Non-
executive Directors are also encouraged to
visit Group operations throughout their tenure
to increase their exposure to the business.
Directors are continually updated on the
Group’s businesses, the markets in which
they operate and changes to the competitive
and regulatory environment through briefings
to the Board and meetings with senior
executives.
Training opportunities are provided through
internal meetings, presentations and briefings
by internal advisers and business heads, as
well as external advisers.
Information and Support
All members of the Board are supplied with
appropriate, clear and accurate information in
a timely manner covering matters which are
to be considered at forthcoming Board and
Committee meetings.
Should Directors judge it necessary to
seek independent legal advice about the
performance of their duties with the Group,
they are entitled to do so at the Group’s
expense. Directors also have access to
the advice and services of the Company
Secretary, who is responsible for advising
the Board on all governance matters and
ensuring that Board procedures are followed.
The appointment and removal of the
Company Secretary is a matter requiring
Board approval.
Re-election of Directors
All Directors are required by the Company’s
Articles of Association to submit themselves
to shareholders for re-election at the
first Annual General Meeting after their
appointment and thereafter by rotation at
least once every three years. In accordance
with the Code, all Directors will, however,
stand for re-election annually.
Corporate
Governance
Business
& Strategy
Financial
Statements
97
Corporate Governance Report
(continued)
Area of Focus Detailed Feedback Progress
Culture The evaluation found a strong desire from the Board
to develop a deeper understanding of organisational
culture. As part of this focus Directors are eager to
develop workforce engagement and greater oversight
of reward practices throughout the organisation.
Progress was being made by the Board in better
understanding how far desired cultures and values
were embedded in the Group, as evidenced by
Non-Executive Director (‘NED’) engagement. The
engagement of the NEDs with a range of employees
from each business unit has provided invaluable insight
into the evolution of our culture and values and their link
to strategy through a series of Our Forum meetings.
Board logistics
and information
In light of the challenges of remote Board meetings,
Directors communicated that there may need to be
refinement to Board agendas, including ensuring there
is a balance struck between insight and excessive
detail.
The Board is focused on evolving ways of working to
ensure Board time is used in a way that is strategic,
appropriate and effective. The agenda has moved to a
more focused, specific and strategic footing to reflect
this way of working. The Board resumed meetings and
engagement activities in person in the latter part of the
year.
Risk Picture The Directors voiced satisfaction with the strength
of work done on developing and communicating the
updated risk framework in recent years. Feedback
indicated that this risk picture needs to be further
developed, particularly in relation to emerging non-
financial risks and wider economic developments.
The annual board and the audit committee meeting
agendas have included a series of updates from
executive risk owners in relation to both the Group’s
principal risks and emerging risks having regard to the
fact that the Group operates in a dynamic environment
where risks continue to evolve, and the Group continues
to develop mitigation measures to address them.
FY2022 Board and Committee internal
evaluation
Similar to last year, in FY2022 the Board
carried out an internal review of its own
effectiveness and that of its Committees
and Directors. The internal evaluation
process was conducted through a
questionnaire, which sought Directors
feedback on a variety of matters including
how they felt the Board had collectively
responded to COVID-19 and the IT security
incident, sustainability and diversity,
the composition of the Board and
Committees, understanding stakeholders,
Board dynamics, strategic oversight,
risk management and internal control,
succession planning, the advice and
support provided, the focus of meetings and
priorities for change.
The results of the questionnaires were
collated and a summary provided to
the Chair and the Chairs of each of the
Committees. The results were presented
and discussed by the Board and each of its
committees at their respective meetings in
April/May 2022.
Our most recent externally facilitated Board
evaluation was carried out by Independent
Audit Limited in FY2020. In line with
the recommendations of the Code, an
independent formal external evaluation will
be conducted in FY2023.
FY2020 External Board Effectiveness
Evaluation Outcomes
Evaluation of the Chair and Non-
Executive Directors
A questionnaire was issued to each Board
member (excluding the Chair) and the result
Board Evaluation
FY2020 Board and Committee external
evaluation
As reported in the FY2020 Annual Report,
an external evaluation was undertaken in
2020. Overall, the results of the evaluation
were positive and showed that the Board
was running effectively. The Board was
seen as being cohesive and comprising the
appropriate balance of experience, skills and
knowledge. Board meetings operated in a
spirit of openness, fostered by the Chair, in
which Directors were able to challenge and
discuss openly ideas of importance to the
Group, its strategy and risk.
While the outcome of the evaluation clearly
indicated that the Board and individual
Directors continued to operate to a high
standard, the Board developed an action
plan based on the feedback from the
evaluation, designed to further enhance
Board effectiveness. Ensuring the Board
maintains the high standards it has always
set was and is of significant importance.
The key areas identified in the 2020
external evaluation for increased focus and
development during FY2022 are set out
below:
98 C&C Group plc Annual Report 2022
was unanimous support for the Chair. The
Senior Independent Director shared the
feedback with the Chair.
The Chair held one to one meetings with
each Director to assess their effectiveness
and to agree any areas of improvement
or training and development, including
on environmental, social and governance
matters based on the outcomes of the
questionnaires each of them had completed
on themselves. There were no issues of any
substance arising from this review.
Audit, Risk and Internal Control
Financial and Business Reporting
The Strategic Report on pages 2 to 81
explains the Group’s business model and the
strategy for delivering the objectives ofthe
Group.
A Statement on Directors’ Responsibilities
on the Annual Reportand Accounts being
fair, balanced and understandable canbe
found on page 136 and a statement on the
Group as a going concern and the Viability
Statement are set out on pages 44 to 45.
Risk Management
Please refer to pages 34 to 45 for information
on the risk management process and the
Group’s principal risks and uncertainties.
Internal Control
Details on the Group’s internal control
systems are set out on page 103.
Internal Audit
Details of the Internal Audit function are
provided within the Audit Committee report
on pages 103 to 104.
Audit Committee and Auditors
For further information on the Group’s
compliance with the Code and provisions
relating to the Audit Committee and auditors,
please refer to the Audit Committee Report
on pages 100 to 105.
Remuneration
For further information on the Group’s compliance with the Code provisions relating to
remuneration, please refer to the Directors’ Remuneration Committee Report on pages 116
to 135 for the level and components of remuneration. Shareholders approved the Group’s
current Remuneration Policy at the 2021 AGM. The Policy is designed to promote the long-
term success of the Group.
The following is a table of reference that provides an overview of where to find disclosures
relating to the sections of the Code:
Section Disclosure Locations
Board
Leadership and
Purpose
Details on how the Board promotes the long-term success of the
Company are set out in our Strategic Report on pages 2 to 81
and throughout this Corporate Governance Report on pages 90
to 99. Our purpose and values are set out on page 6. Relations
with shareholders are described on page 9. Our whistleblowing
programme is described on page 79.
Division of
Responsibilities
Pages 88 to 89 gives details of the Board and Management Team.
The Board governance structure is detailed on pages 90 to 99.
Composition,
Succession and
Evaluation
Details on appointments and our approach to succession are set
out in the Nomination Committee report on pages 108 to 115.
Details on evaluation are set out on page 98.
Audit, Risk and
Internal Control
The Audit Committee Report can be found on pages 100 to 105,
with further detail on the principal risks to the business in the Risk
Report on pages 34 to 45.
Remuneration The Company’s Remuneration Policy can be found in the FY2021
Annual Report. The Directors’ Remuneration Committee Report can
be found on pages 116 to 135.
Constructive Use of the Annual General
Meeting
The Code encourages boards to use the
Annual General Meeting to communicate
with investors and to encourage their
participation. In compliance with the
Code, under normal circumstances, the
Board welcomes as many shareholders
as possible to attend the Annual General
Meeting to discuss any interest or concern,
including performance, governance or
strategy, with the Directors. All Directors
are also usually expected to attend the
Annual General Meeting. The Chairs of the
Audit, ESG, Nomination and Remuneration
Committees would be expected to be
available at the Annual General Meeting to
answer shareholder questions, through the
Chair of the Board, on the responsibilities
and activities of their Committees.
Shareholders also have the opportunity
to meet with the Directors following the
conclusion of the formal part of the meeting.
In compliance with the Code, at the Annual
General Meeting, the Chair of the meeting
will announce the level of proxies lodged on
each resolution, the balance for and against
and abstentions, and such details will be
placed on the Group’s website following
the meeting. A separate resolution will be
proposed at the Annual General Meeting in
respect of each substantially separate issue.
This report was approved by the Board of
Directors on 17 May 2022.
Mark Chilton
Company Secretary
Corporate
Governance
Business
& Strategy
Financial
Statements
99
Dear Shareholder
I am pleased to present
the Audit Committee (the
“Committee”) report covering
the work of the Committee
during FY2022. This provides
an overview of the Committee’s
activities in the year under
review and looks forward to
our expected activities in the
coming year.
Year in Review
The Group’s businesses have continued to
work through the challenges arising from
COVID-19. The Group’s operations and
financial arrangements were all impacted as
a result of the pandemic and consequently,
the Committee’s focus has been on
ensuring our internal control processes
continue to operate effectively and remain
appropriate for the changing environment in
which the Group operates.
A vital aspect of the Committee’s work
is to provide independent scrutiny and
challenge to ensure the Annual Report and
financial statements provide a true and
fair view of the Company’s performance,
focusing on the accuracy, integrity and
communication of our financial reporting.
In what has been another challenging year,
effective oversight of our finances, controls
and risk management has never been more
important.
In discharging its responsibilities in the year,
the Committee reviewed the significant
accounting policies, any changes to those
policies, and any significant estimates
and judgements applied to the financial
statements. The Committee concentrated
on the accounting judgements and
disclosures relating to the impact of
COVID-19 on the Group’s businesses,
including government support and tax
deferral initiatives, liquidity and the impact
on financial covenants, cost control and
cost saving measures. Other focus areas
included going concern, recoverability
of trade receivables and advances to
customers, the carrying value of goodwill
and intangibles, the valuation of property,
plant and equipment and revenue
recognition.
As is usual, the Committee considered the
Group’s Principal Risk disclosures for the
financial year ended 28 February 2022.
These have been updated, in particular
sustainability and climate change related
risks, those associated with people
and culture and economic and political,
underlining the importance of those matters
to the Group. The Committee is satisfied
that the statements made by executive
management on page 34 to 35 of this
Annual Report in respect of the Principal
Risks are appropriate based on what is
currently known to management as at the
date of this Report.
Following the incident affecting Matthew
Clark and Bibendum IT systems in April
2021, the Committee also reviewed with
the support of leading cyber security
experts our information security policies and
procedures and enhanced our information
technology systems and controls to defend
against cyber-attacks, which are becoming
increasingly sophisticated.
The Committee’s work was supported
by the Group’s well established risk and
financial management structures, which
have continued to operate effectively during
the year under review. The Committee
has continued to be greatly assisted by
the commitment, energy and experience
of the finance team in the face of a very
heavy workload in 2022. This has enabled
the Committee to fulfil its role in providing
effective scrutiny and challenge.
There were thirteen meetings during the
year and after each Committee meeting
I provided an update to the Board on the
key issues discussed during our meetings.
I also met separately with the external
audit partner and senior management on a
number of occasions during the year.
More information about the Committee’s
activities during the year can be found in the
pages which follow.
The Year Ahead
The Committee will continue to focus on
the impact of COVID-19 on the business,
developments in reporting responsibilities
and the security of our digital and
technology estate. The Committee fulfils a
key role in assisting the Board in ensuring
that the integrity of the Group’s financial
statements and the effectiveness of the
Group’s internal financial controls and risk
management systems are maintained.
Through the Committee’s composition,
resources and the commitment of its
members, I believe that it remains well
placed to meet those challenges and to
discharge its duties effectively in the year
ahead.
On behalf of the Board
Emer Finnan
Chair of the Audit
17 May 2022
Audit Committee Report
100 C&C Group plc Annual Report 2022
Role and Responsibilities of the
Committee
The Committee supports the Board
in fulfilling its responsibilities in relation
to financial reporting, monitoring the
integrity of the financial statements and
other announcements of financial results
published by the Group; and reviewing
and challenging any significant financial
reporting issues, judgements and actions
of management in relation to the financial
statements. The Committee reviews
the effectiveness of the Group’s internal
controls and risk management systems and
the effectiveness of the Group’s Internal
Audit function. On behalf of the Board,
the Committee manages the appointment
and remuneration of the External Auditor
and monitors its performance and
independence. The Group supports an
independent and confidential whistleblowing
procedure and the Committee monitors the
operation of this facility.
In accordance with the Code, the Board
requested that the Committee advise it
whether it believes the Annual Report
and Accounts, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
The Committee’s Terms of Reference reflect
this requirement and can be found in the
Investor Centre section of the Group’s
website. A copy may be obtained from the
Company Secretary.
All members of the Committee are,
and were considered by the Board to
be throughout the year under review,
independent.
The Committee members have been
selected to provide the wide range of
financial and commercial expertise
necessary to fulfil the Committee’s duties
and responsibilities and provide effective
governance. As a qualified chartered
accountant, I am considered by the Board
to have recent and relevant financial
experience, as required by the Code. The
Committee is considered by the Board as a
whole to have competence relevant to the
sector in which the Group operates. Details
of the skills and experience of the Directors
are contained in the Directors’ biographies
on pages 88 and 89 of the Annual Report
and Accounts.
The Committee has access to the Group’s
finance team, to its Internal Audit function
and to its External Auditor and can seek
further professional training and advice, at
the Group’s cost, as appropriate.
Meeting Frequency and Main
Activities in the Year
The Committee met on five scheduled
occasions during FY2022. In addition,
there were eight ad hoc meetings. Emer
Finnan was unable to attend one meeting
due to a bereavement and Jim Thompson
was unable to attend one meeting due to a
medical procedure. The quorum necessary
for the transaction of business by the
Committee is two, each of whom must be
a Non-Executive Director. Only members
of the Committee have the right to attend
Committee meetings, however, during the
year, Stewart Gilliland, Chair, David Forde,
Group Chief Executive Officer, Patrick
McMahon, Group Chief Financial Officer,
Vineet Bhalla, Non-Executive Director,
the Head of Internal Audit together with
members of the Internal Audit team, the
Technology and Transformation Director,
the Head of IT, the Group Data Protection
Officer, the Director of Group Finance
together with members of the Group
Finance team, and representatives from
Clifford Chance, solicitors and Ernst &
Young, the External Auditor, were invited
to attend meetings. The Committee also
meets separately with the Head of Internal
Audit and the External Auditor without
management being present.
The Company Secretary and Group General
Counsel is Secretary to the Committee.
Significant Judgemental Areas
The key matters reviewed and evaluated
by the Committee during the year are set
out below. Each of these areas received
particular focus from the External Auditor,
who provided detailed analysis and
assessment of the matters in their report to
the Committee.
Going Concern
The Committee and the Board reviewed
and challenged management’s assessment
of forecast cash flows for the period to 31
August 2023 including sensitivity to trading
and expenditure plans, and for the potential
impact of uncertainties including an evolving
inflationary environment and reduced
volumes, in part associated with the
impact of ongoing conflict in Ukraine. The
Committee also considered the Company’s
financing facilities and future funding plans.
Based on this, the Committee confirmed
that the application of the going concern
basis for the preparation of the financial
Membership and Attendance
The following non-executive Directors served on the Committee during the year:
Member Member Since
Number of Meetings
Attended
Maximum Possible
Meetings
Emer Finnan (Chair)
1
2 July 2014 12 13
Vincent Crowley 22 March 2016 13 13
Jim Thompson
2
1 March 2019 12 13
1. Emer Finnan was unable to attend the meeting on 23 October 2021 due to a bereavement.
2. Jim Thompson was unable to attend the meeting on 27 October 2021 due to a medical procedure.
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Statements
101
Audit Committee Report
(continued)
statements continued to be appropriate with
no material uncertainties.
The Committee received a report from EY
on the work undertaken to assess going
concern and specifically discussed the
content of the disclosures made in the
going concern statement in the Annual
Report and the basis of preparation within
the Statement of Accounting Policies of the
financial statements on page 157.
For further information on the work
undertaken by the Committee, the Board
and management in relation to the going
concern basis of preparation for the
FY2022 financial statements, please see
‘Going Concern’ on page 44 and ‘Viability
Statement’ on pages 44 to 45. The
Directors’ Going Concern statement is set
out on page 44.
Recoverability of Trade Receivables
and Advances to Customers
The Group has a recoverability risk through
exposure to on-trade receivable balances
and advances to customers who may
experience financial difficulties. Given the
unprecedented nature of the COVID-19
outbreak, the assessment of the impact
of the outbreak on the Group’s expected
credit loss model required significant
judgement by the Committee. In particular,
the Committee considered the basis used
by management in calculating the expected
credit losses, whether it adequately
captured the additional risks in the current
environment and the level of security in
respect of those loans. As a result of the
review process, the Committee concluded
that the expected credit loss on trade
receivables and loans was prudent but
appropriate and were properly reflected in
the consolidated financial statements.
Carrying value of Goodwill and
Intangibles
The Committee considered the carrying
value of goodwill and intangible assets as
at the year-end date to assess whether or
not it exceeded the expected recoverable
amounts for these assets. In particular, the
Committee considered and challenged
the valuation financial models, including
sensitivity analysis, used to support
the valuation and the key assumptions
and judgements used by management
underlying these models including
consideration for COVID-19. The key
assumptions used in the financial models
and consequently the key focus areas for
the Committee relate to future volume, net
revenue and operating profit, the growth rate
in perpetuity and the discount rate applied
to the resulting cash flows. The Committee
considered the outcome of the financial
models and found the methodology to be
robust, and in all instances concluded that
the outcome was appropriate.
Valuation of property, plant and
equipment
The Group values its land and buildings
and plant, machinery and equipment at
market value/depreciated replacement cost
and consequently carries out an annual
valuation. The Group engages external
valuers to value the Group’s property,
plant and machinery at a minimum every
three years or as at the date of acquisition
for assets acquired as part of a business
combination. An external valuation was
conducted at 28 February 2022 by
PricewaterhouseCoopers LLP to value the
land and buildings and plant, machinery
and equipment at the Group’s Clonmel
(Tipperary), Wellpark (Glasgow) and Portugal
sites. Following a review of PwC’s valuation
report, the Committee is satisfied that the
adjustments posted were reasonable and
that the carrying values at 28 February 2022
are appropriate.
Revenue recognition
The Committee considered the Group’s
revenue recognition policy and is satisfied
it is appropriate and in line with IFRS 15
Revenue from Contracts with Customers.
Following discussions with the External
Auditor, and the deliberations set out
above, we were satisfied that the financial
statements dealt appropriately with each of
the areas of significant judgement.
Other Areas of Focus
The Committee also during the year:
• approved the Internal Audit plan and
agreed the External Auditor’s work plans
for the Group;
• considered regular reports from the Head
of Internal Audit on their findings;
• reviewed and recommended revisions to
the Board to the Group Risk Register and
the Principal Risks and Uncertainties;
• reviewed the information security
and cyber preparedness policies and
procedures in place to protect the Group
against cyber-attack and the activities
under way to further improve cyber
security across the Group’s technology
estate; and
• reviewed the External Auditor’s
independence and objectivity, the
effectiveness of the audit process, the
re-appointment of the External Auditor
and approved the External Auditor’s
remuneration.
Fair, Balanced and Understandable
Assessment
One of the key compliance requirements
of the Group’s financial statements is for
the Annual Report and Accounts to be
fair, balanced and understandable. The
coordination and review of Group wide
contributions into the Annual Report and
Accounts follows a well established and
documented process, which is performed in
parallel with the formal process undertaken
by the External Auditor.
The Committee received a summary of
the approach taken by management in the
preparation of the FY2022 Annual Report
and Accounts to ensure that it met the
requirements of the Code. This, and our
own scrutiny of the document, enabled
the Committee, and then the Board, to
confirm that the 2022 Annual Report
and Accounts taken as a whole, was fair,
balanced and understandable and provided
102 C&C Group plc Annual Report 2022
the information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
Financial Reporting Council (‘FRC’)
Engagement
As part of the FRC’s thematic review of
viability and going concern disclosures, and
the disclosure of alternative performance
measures (“APMs”), the FRC wrote to
the Company, firstly by letter dated 15
September 2021, advising that they had
identified the Company as having made an
example of better practice disclosure in the
Annual Report 2021 and one they proposed
to identify on the FRC’s website. In the
second letter dated 30 September 2021,
the FRC advised that based on their limited
scope reviews, there were no questions
or queries that they wished to raise upon
the Annual Report and accounts. The FRC
did, however, identify a number of matters,
where they believed that users of the
accounts would benefit from improvements
to existing disclosures. These matters
have been considered when preparing the
Annual Report 2022.
The FRC requested that in disclosing this
engagement we note the limitations of their
review, namely that it was based on their
reading of the Annual Report 2021 and did
not benefit from a detailed knowledge of
our business or an understanding of the
underlying transactions entered into. They
also noted that their review provided no
assurance that the report and accounts
are correct in all material respects but
rather that the FRC’s role is not to verify
the information provided but to consider
compliance with reporting requirements.
Internal Controls and Risk
Management Systems
The Committee is responsible, on behalf of
the Board, for reviewing the effectiveness
of the Group’s internal controls and risk
management systems, including financial,
operational and compliance controls.
In order to keep the Committee abreast
with latest developments, the Head of
Internal Audit reported to each meeting on
developments and emerging risks to internal
control systems and on the evolution of our
principal risks. The Committee reviewed
the updated principal risks, their evolution
during the year, and the associated risk
appetites and metrics in light of business
changes and performance, challenging
and confirming their alignment to the
achievement of the Group’s strategic
objectives. This included consideration
of the impact of COVID-19. On a regular
and ongoing basis, the Committee
considered the ongoing overall assessment
of each risk, their associated metrics and
management actions and mitigations
in place and planned. This review was
supported through consideration of risk
dashboards outlining both principal risks
and any escalated or emerging risks
resulting in the Audit Committee regarding
COVID-19 not as an individual risk but
rather considering the amplifying effect
on a number of other principal risks such
as Health and Safety, People and Culture,
Supply Chain Operations and Costs and
Cyber and Information Security. Those
changes to our risk profile were then
approved by the Board. The Group’s
principal risks and uncertainties are set out
on pages 34 to 45.
In addition, the Committee reviewed
reports issued by both Internal Audit and
the External Auditor and held regular
discussions with the Group Chief Financial
Officer, the Head of Internal Audit and
representatives of the External Auditor.
IT Systems and Cyber Security
Following the incident affecting Matthew
Clark and Bibendum IT systems in April
2021, we have reviewed our information
security and cyber preparedness policies
and procedures, enhanced our Information
Technology systems and controls, including
the appointment of a Technology and
Transformation Director and Group Head
of IT. In the field of information technology
and security, the Company undertakes a
regular security assurance programme,
testing controls, identifying weaknesses
and prioritising remediation activities where
necessary. This includes periodic best
practice specialist security testing by a
leading third party provider and regular
system scanning to identify security
weaknesses. Issues are assessed for risk
and are comprehensively managed as
part of the Company’s risk management
programme. The Committee is presented
with regular detailed Information
Security Reports by the Technology and
Transformation Director and Group Head
of IT, which includes recommendations for
further reinforcements, and a roadmap for
further risk reduction. As a demonstration of
our commitment to tackling cyber security
we are currently pursuing Cyber Essentials
Plus accreditation from the National Cyber
Security Centre (NCSC).
We have also embarked on a set of projects
whose purpose is to help the Company
change systems, process or ways of
working, to update and modernise the
systems we use and create alignment
within the Group on systems and process.
The Committee is presented with regular
detailed reports on progress by the
Technology and Transformation Director.
Internal Audit
The Committee is responsible for
monitoring and reviewing the operation and
effectiveness of the Internal Audit function
including its focus, work plan, activities and
resources.
At the beginning of the financial year, the
Committee reviewed and approved the
Internal Audit plan for the year having
considered the principal areas of risk in
the business and the adequacy of staffing
levels and expertise within the function.
The Committee also reviewed those plans
again during the year in light of COVID-19,
which resulted in the Internal Audit function
changing focus having regard to imposed
Corporate
Governance
Business
& Strategy
Financial
Statements
103
Audit Committee Report
(continued)
working restrictions taking a risk based
approach. A number of high risk audits
were conducted remotely and others were
deferred into FY2023 where appropriate.
This was a position endorsed by the
Committee in recognition of the operational
challenges being experienced at the time
by the business and to the businesses of
our customers, which required immediate
prioritisation and focus. The FY2023
audit plan has considered all existing and
emerging risks and what was deferred from
FY2022, incorporating both elements where
appropriate.
During the year, the Committee received
regular verbal and written reports from the
Head of Internal Audit summarising findings
from the work of Internal Audit and the
responses from management to deal with
the findings.
The Committee monitors progress on the
implementation of any action plans arising
on significant findings to ensure these are
completed satisfactorily and meets with
the Head of Internal Audit in the absence of
management.
External Audit
It is the responsibility of the Committee to
monitor the performance, objectivity and
independence of Ernst and Young (‘EY’), the
External Auditor. In December 2021, we met
with EY to agree the audit plan for the year
end, highlighting the key financial statement
and audit risks, to ensure that the audit was
appropriately focused. In addition, EY’s
letter of engagement and independence
was reviewed by the Committee in advance
of the audit.
In May 2022, in advance of the finalisation
of the financial statements, we received a
report from EY on their key audit findings,
which included the key areas of risk and
significant judgements referred to above,
and discussed the issues with them in order
for the Committee to form a judgement on
the financial statements. In addition, we
considered the Letter of Representation
that the External Auditor requires from the
Board.
The Committee meets with the External
Auditor privately at least once a year to
discuss any matters they may wish to raise
without management being present.
Assessment of Effectiveness of
External Audit
During the year, the Committee reviewed
EY’s fees for its services, its effectiveness
and whether the agreed audit plan had been
fulfilled and the reasons for any variation
from the plan. The review included a formal
evaluation process including the completion
of a short questionnaire by each member of
the Committee, the Group Chief Financial
Officer, the Director of Group Finance and
applicable senior finance executives across
the business.
The Committee also considered the
robustness of the FY2022 audit, the
degree to which EY was able to assess
key accounting and audit judgements
and the content of the audit committee
report issued by the External Auditor. Due
to governmental advice and restrictions
regarding social distancing and travel, EY’s
audit teams have followed different levels of
remote working in the locations where the
Group operates. The Committee is satisfied
that this has not impacted the effectiveness
of the audit or the audit process. On the
basis of the Committee’s evaluation and
taking into account the views of other
key internal stakeholders, the Committee
concluded that both the audit and the audit
process were effective.
Audit Tender
Following a tender process, the current
External Auditor was first appointed for the
year ended 28 February 2018. The Group’s
lead audit engagement partner, Pat O’Neill
has been the same since that date. The
External Auditor is required to rotate the
audit partner every five years and therefore
the existing partner will rotate after the
upcoming AGM.
There are no contractual obligations
restricting the Company’s choice of External
Auditor. The Committee will continue to
review the auditor appointment and the
need to tender the audit, ensuring the
Group’s compliance with the Code and any
related regulations.
The Group complied on a voluntary basis
with the Statutory Audit Services for Large
Companies Market Investigation (mandatory
Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order
2014, having last carried out a competitive
tender for audit services in 2017.
Non-Audit Services
The Group has a policy in place governing
the provision of non-audit services by
the External Auditor in order to ensure
that the External Auditor’s objectivity and
independence is safeguarded.
Under this policy the auditor is prohibited
from providing non-audit services if the
auditor:
• may, as a result, be required to audit its
own firm’s work;
• would participate in activities that would
normally be undertaken by management;
• would be remunerated through a
“success fee” structure or have some
other mutual financial interest with the
Group; and
• would be acting in an advocacy role for
the Group.
Other than above, the Company does not
impose an automatic ban on the External
Auditor providing non-audit services.
However, the External Auditor is only
permitted to provide non-audit services
that are not, or are not perceived to be,
in conflict with auditor independence and
objectivity, if it has the skill, competence
104 C&C Group plc Annual Report 2022
and integrity to carry out the work and it
is considered by the Audit Committee to
be the most appropriate firm to undertake
such work in the best interests of the
Group. The engagement of the External
Auditor to provide non-audit services
must be approved in advance by the Audit
Committee or entered into pursuant to
pre-approved policies and procedures
established by the Audit Committee and
approved by the Board.
The nature, extent and scope of non-
audit services provided to the Group by
the External Auditor and the economic
importance of the Group to the External
Auditor are also monitored to ensure
that the External Auditor’s independence
and objectivity is not impaired. The Audit
Committee has adopted a policy that,
except in exceptional circumstances with
the prior approval of the Audit Committee,
non-audit fees paid to the Group’s auditor
should not exceed 100% of audit fees in any
one financial year.
In FY2022, EY undertook non-audit work
in relation to the Rights Issue. As part
of the preparations for the Rights Issue
announced in June 2021, certain non-audit
assurance was required of the financial
information presented in the prospectus.
Management felt that EY would be best
placed to undertake this work if appropriate
safeguards could be put in place, and
this was discussed and approved by the
Committee prior to work taking place. The
fees for the non-audit work were €0.4m and
agreed by the Committee.
A number of measures were implemented
to ensure that the objectivity of EY as
auditors of the Company was safeguarded:-
• The non-audit work was led by an
independent EY partner and team
members not involved in the audit, and
subject to review by an independent audit
partner;
• The services were performed on a one-
off basis, and were clearly set out in an
engagement letter;
• All fees for the additional reporting
accountant services were invoiced and
settled in full before the audit work was
finalised;
• A Quality Review Partner was involved
in the audit, and was responsible for
performing a further review over the
performance of the audit; and
• A clearance panel including a further
three independent partners was held
prior to completion of the non-audit work
to provide an additional level of review.
Given the one off nature of these non-audit
services and given they were assurance
based ensured that the objectivity of EY
was safeguarded.
Confidential Reporting Programme
In line with best practice, the Group has
an independent and confidential reporting
programme in all of its operations whereby
employees can, in confidence, report on
matters where they feel a malpractice
has taken or is taking place, or if health
and safety standards have been or are
being compromised. Additional areas that
are addressed by this procedure include
criminal activities, improper or unethical
behaviour and risks to the environment.
The programme allows employees to raise
their concerns with their line manager or,
if that is inappropriate, to raise them on a
confidential basis. An externally facilitated
confidential helpline and confidential email
facility are provided to protect the identity
of employees in these circumstances. Any
concerns are investigated on a confidential
basis by the Human Resources Department
and/or the Company Secretary and Group
General Counsel and feedback is given
to the person making the complaint as
appropriate via the confidential email facility.
An official written record is kept of each
stage of the procedure and results are
summarised for the Committee.
The Audit Committee is also responsible
for ensuring that arrangements are in
place for the proportionate independent
investigation and appropriate follow up of
any concerns which might be raised. The
Committee receives regular reports on all
whistleblowing incidents. The Board also
receives a report on whistleblowing in the
Company Secretary and Group General
Counsel’s regular report to Board meetings.
In FY2022, no incidences of concern were
uncovered.
We encourage employees to report
genuine issues and concerns as they arise.
Those concerns are taken seriously. They
are investigated where appropriate and
confidentiality is respected.
Evaluation of the Committee
The evaluation of the Committee was
completed as part of the 2022 internal
board evaluation process. An explanation
of how this process was conducted, the
conclusions arising from it and the action
items identified is set out on page 98.
The Committee has considered this in the
context of the matters that are applicable to
the Committee.
This report was approved by the Board of
Directors on 17 May 2022.
Emer Finnan
Chair of the Audit Committee
Corporate
Governance
Business
& Strategy
Financial
Statements
105
Environmental, Social and Governance Committee Report
Dear Shareholder
I am pleased to present the
Group’s Environmental, Social
and Governance (‘ESG’)
Committee report covering
the work of the Committee
during FY2022. This report
provides an overview of the
Committee’s activities in the
year under review and previews
our expected activities in the
coming year.
Year in Review
ESG is central to the Company’s strategy
and forms an integral part of how C&C
operates at every level. To reflect C&C’s
ongoing commitment to operating a
sustainable business, the Board established
an ESG Committee in 2020. The ESG
Committee has primary responsibility for
sustainability and climate change issues.
C&C’s Head of ESG and its
Communications and Corporate Affairs
Director continue to lead the Company
towards our vision relating to ESG targets.
A team of six ESG Champions from across
the business analyse and appraise the ESG
strategy, its six pillars and the initiatives
underpinning it. Our ESG Champions have
attended the six Committee meetings
held during FY2022. ESG Champions are
appointed on an 18 month term, allowing
them to be involved in the setting of long
term and meaningful targets and providing
an opportunity to help shape the future of
the business at a strategic level through ESG
matters. The Committee has been delighted
by the Champions’ energy, enthusiasm and,
moreover, input as we continue to define
the ESG strategy. The ESG Champions
report back to their respective teams which
ensures an element of alignment on ESG
related issues throughout the business.
The Head of ESG, with the support of
the Champions and in collaboration with
the Board, have worked to establish the
Company’s ESG KPIs, which relate to the
six pillars of the ESG strategy as detailed
on pages 62 to 63, and develop timelines
in accordance with legal and regulatory
requirements over the coming years.
Alongside the continuous implementation
of the Company’s ESG strategy, the
Committee was briefed on the Company’s
requirement to include a statement in its
FY2022 Annual Report and Accounts
setting out whether our climate-related
financial disclosures were consistent with
the recommendations of the Task Force
on Climate-related Financial Disclosures
(‘TCFD’). The Committee welcomed
TCFD as an important step in increasing
stakeholders’ and companies’ focus on
meeting its obligations on climate change.
We have begun the journey of incorporating
the TCFD framework into our reporting
and risk management processes and are
accelerating efforts to mitigate climate
change risks and identify opportunities for
transitioning to be a carbon neutral business
by 2050. The Committee received initial
training from an external provider on TCFD
and climate change related issues during
FY2022. An additional ESG Committee
meeting was arranged to provide feedback
on and approve the Company’s shortlist of
Climate Change Risks and Opportunities,
which were recommended to the Board.
Protecting and enhancing our environment
is an integral part of the Group’s strategy.
For this reason, an environmental target
was put forward to the Committee during
FY2022 and approved by the Remuneration
Committee. The environmental target forms
a performance condition of the 2021 Long
Term Incentive Plan (‘LTIP’). More details can
be found in the Remuneration Committee
Report on page 117.
A key element of our ESG strategy is to raise
the voice of employees in the boardroom.
The Board recognises the importance of
communication and engagement with the
wider workforce as a means of assessing
and monitoring our corporate culture.
During FY2022, the engagement of the
Non-Executive Directors with a range of
employees from each business area has
provided invaluable insight into the evolution
of our culture and values, and their link to
strategy, through a series of ‘Our Forum’
meetings. The Committee received updates
from departments within the business on
a range of issues including mental health,
wellbeing and engagement, and health
and safety. The meetings, organised by the
Head of ESG, allow employees to raise, with
the Non-Executive Directors and business
106 C&C Group plc Annual Report 2022
units’ Managing Directors, a variety of
issues of importance to them, including
the Company’s response to the COVID-19
pandemic as it developed, and views on
what the Company could improve in its
response to help the business and its
employees.
The strength of our team is our most
valuable asset and we are committed to
creating an open and inclusive culture,
which enables all of our people to thrive,
and to promote diversity and inclusion
to ensure we have a balanced pipeline
of talent for the future. One of our ESG
KPIs approved by the Committee,
in collaboration with the Nomination
Committee, is linked to diversity and
inclusion and we continue to look for ways
to expand the Company’s Inclusivity and
Diversity agenda.
In terms of corporate responsibility and
community engagement, the Board is
committed to treating all stakeholders in
every area of our business with honesty,
fairness, openness, engagement and
respect, and to conducting all business
ethically and safely. The Group will only
work with parties that share these values.
Our Code of Conduct (‘our Code’) sets out
our expectations for how we do business,
clarifying our commitments to ethical,
social and environmental performance.
Our ESG policies support our Code.
On behalf of the Board
Jim Thompson
Chair of the ESG Committee
17 May 2022
Role of the Committee
The Committee is required to:-
• Assist the Board in defining the Group’s
strategy relating to ESG matters;
• Review the policies, programmes,
practices and initiatives of the Group
relating to ESG matters, including
environmental concerns, ensuring they
remain effective and up to date;
• Provide oversight of the Group’s
management of ESG matters and
compliance with legal and regulatory
requirements, including applicable rules
Membership and Attendance
The following directors served on the Committee during the year.
Member Member Since
Number of
Meetings
Attended
Maximum
Possible
Meetings
Jim Thompson (Chair)
1
24 September 2020 5 6
Jill Caseberry 24 September 2020 6 6
Patrick McMahon 24 September 2020 6 6
Helen Pitcher 24 September 2020 6 6
Andrea Pozzi
2
24 September 2020 2 2
1. Jim Thompson was unable to attend the meeting on 27 October 2021 due to a medical procedure.
2. Andrea Pozzi was a member of the Committee until he stood down from the Board on 1 September 2021.
Roles and Responsibilities of the Committee
and principles of corporate governance,
and applicable industry standards;
• Report on these matters to the
Board and, where appropriate, make
recommendations to the Board; and
• Report as required to shareholders of the
Company on the activities and remit of the
Committee.
The Committee has defined Terms of
Reference which can be found in the
Investor Centre section of the Group’s
website at www.candcgroupplc.com.
No member of the Committee nor any other
Director participates in discussions or votes
concerning his or her own re-election or
evaluation of his or her own performance.
Details of the skills and experience of the
Directors are contained in the Directors’
biographies on pages 88 and 89. Their
remuneration is set out in the Remuneration
Report.
The quorum necessary for the transaction
of business by the Committee is two, each
of whom must be a Non-Executive Director.
Only members of the Committee have the
right to attend Committee meetings. The
Committee Secretary is the Senior Assistant
Company Secretary.
Meeting Frequency
The Committee met on six occasions
during the year ended 28 February 2022.
All members of the Committee attended
each meeting except on one occasion
where Jim Thompson could not attend one
meeting due to a medical procedure. At
the invitation of the Committee, the Chair,
the Group CEO, the Company Secretary
and General Counsel, the Head of ESG,
the Communications and Corporate Affairs
Director and the ESG Champions were
invited to attend all meetings.
Evaluation of the Committee
The evaluation of the Committee was carried
out internally as part of the FY2022 internal
Board evaluation process. An explanation
of how this process was conducted, the
conclusions arising from it and the outcome
of that review can be found on page 98.
This report was approved by the Board of
Directors on 17 May 2022.
Jim Thompson
Chair of the ESG Committee
Corporate
Governance
Business
& Strategy
Financial
Statements
107
Dear Shareholder
I am pleased to present the
Nomination Committee (‘the
Committee’) report covering the
work of the Committee during
FY2022. This report provides
an overview of the Committee’s
activities in the year under
review and looks ahead to
our anticipated activities in the
coming year.
Year in Review
As in previous years, succession planning
continued to be the primary focus of the
Committee’s work. The Committee is
responsible for leading a formal, rigorous
and transparent process for Board
appointments and ensuring that plans are
in place for orderly succession to the Board
and senior management positions. The
Committee is also responsible for keeping
under review the leadership needs of the
Group, both executive and non-executive,
with a view to ensuring the continued ability
of the organisation to compete effectively in
a competitive marketplace.
In July 2020, we reported that I would be
stepping down from the Board and that
the Committee, led by Vincent Crowley
Senior Independent Director (‘SID’), would
be leading the search for my successor.
Following a thorough selection process
using external search consultants,
Spencer Stuart, on 16 September 2021
we announced the appointment of Ralph
Findlay as a director and Chair designate.
Ralph joined the Board as a Non-Executive
Director on 1 March 2022 and will succeed
me as Chair of the Company and of the
Committee on 7 July 2022, following the
Annual General Meeting. Ralph is a strong
fit for the Group, with a deep understanding
of the beverage and hospitality sector in the
UK, one of our core markets, and extensive
listed company board experience. Further
details of the selection process can be
found later in the Nomination Committee
Report.
During the year, the Committee continued
to review the skills and composition of the
Board. Following this review, the Board
identified the necessity of having more
digital and technology experience, which
is increasingly important in a digitalised
world. To enhance the Board’s collective
capability and aid us as we seek to deliver
our strategic objectives, the Committee
recommended, and the Board endorsed
the appointment of Vineet Bhalla. The
Board was particularly satisfied that
Vineet’s appointment would bring strong
digital experience as an experienced IT
professional, latterly with Burberry as Chief
Technology Officer and previously as Head
of IT for Unilever for their digital marketing
and research and development divisions.
With each review of its composition, and
when considering any appointment, the
Board has particular regard for diversity
of gender, social and ethnic backgrounds,
nationality, and cognitive and personal
strengths. Diversity at Board level – and
throughout the organisation – is key to
ensure that we incorporate a wider range of
perspectives in deliberations and decision
making. While incorporating all aspects of
diversity, we have placed a particular focus
on gender and ethnic diversity in light of the
Hampton Alexander and Parker Reviews,
which act as guidance for the Committee.
In further Board changes, we announced
in July 2021, that Andrea Pozzi, Chief
Operating Officer (‘COO’) and Jim Clerkin,
Non-Executive Director, had each decided
to step down from their respective Board
roles, with effect from 1 September and 27
October 2021 respectively. The Group was
pleased to announce that Andrea would
remain with the Group and had agreed to
take up the role of managing our combined
GB businesses, with a key focus on aligning
management structures and guiding us
through a significant change programme of
simplification and integration. The Company
did not replace the Executive Director role
of COO and current Board responsibilities
associated with that position are being
fulfilled by the remaining Executive Directors.
In addition, Jim Clerkin advised the Board
that, as a consequence of his increased
work responsibilities in the USA, he was
finding it increasingly difficult to give the
necessary time commitment required as a
Non-Executive Director of the Company.
After four years on the Board, Jim decided
to take the decision to step down from
Nomination Committee ReportNomination Committee Report
108 C&C Group plc Annual Report 2022
his position in October 2021. The Board
would like to thank both Andrea and Jim
for their significant contribution to the
Board and to wish Jim well for the future.
At the financial year-end, 33% of the
Board’s membership was female. The
Committee was fully aware that this level
reduced with the appointment of Ralph
Findlay and will go back to 33% once I
step down from the Board in July 2022.
The Committee will continue to monitor
the composition and balance of the Board
to ensure that a broad and diverse range
of expertise is available from the existing
members and will recommend further
appointments as and when appropriate
to assure the long term success of the
Group.
At C&C Group our colleagues remain
our most valuable asset and we are
committed to creating an open and
inclusive culture, which enables all of
our people to thrive, and to leverage
diversity and inclusion to ensure we
have a balanced pipeline of talent for
the future. The Committee will continue
its work to ensure the Board maintains
a balance of individuals representing a
wide cross section of experience, cultural
backgrounds and specialisms. In the
coming year, the Committee will continue
to focus on succession planning and
on furthering our diversity and inclusion
agenda.
On behalf of the Board
Stewart Gilliland
Chair of the Nomination
17 May 2022
Roles and Responsibilities of the
Committee
Role of the Committee
The Committee is responsible for Board
recruitment and conducts a continuous
and proactive process of planning and
assessment, taking into account the Board’s
composition against the Group’s strategic
priorities and the main trends and factors
affecting the long-term success and future
viability of the Group. The Committee’s
key objective is to ensure that the Board
comprises individuals with the necessary
skills, knowledge, experience and diversity
Except for the Chair, all members of the
Committee are and were, throughout the
year under review, considered by the Board
to be wholly independent.
No member of the Committee nor any
other Director participates in discussions
concerning or votes on his or her own
re-election or evaluation of his or her own
performance. Details of the skills and
experience of the Directors are contained
in the Directors’ biographies on pages 88
and 89. Their remuneration is set out in the
Directors’ Remuneration Committee Report.
Membership and Attendance
The following Non-Executive Directors served on the Committee during the year.
Member Member Since
Number of Meetings
Attended
Maximum Possible
Meetings
Stewart Gilliland (Chair)
1
24 October 2017 7 7
Vincent Crowley 1 June 2019 8 8
Emer Finnan 5 July 2018 8 8
Helen Pitcher 23 October 2019 8 8
1. Stewart Gilliland did not attend one meeting concerning the appointment of his successor.
to ensure that the Board is effective in
discharging its responsibilities and that
appropriate succession arrangements
are in place. The Committee has defined
Terms of Reference which can be found in
the Investor Centre section of the Group’s
website at www.candcgroupplc.com.
The Committee is responsible for leading
a formal, rigorous and transparent process
for the appointment of new Directors to the
Board and ensuring that plans are in place
for orderly succession to the Board and
senior management positions.
The quorum necessary for the transaction
of business by the Committee is two, each
of whom must be a Non-Executive Director.
Only members of the Committee have the
right to attend Committee meetings. The
Company Secretary is Secretary to the
Committee.
Corporate
Governance
Business
& Strategy
Financial
Statements
109
Nomination CommitteeReport
(continued)
Meeting Frequency and Main
Activities during the year
The Committee met on eight occasions
during the year ended 28 February 2022.
All members of the Committee attended
each meeting, save and except for the
Chair in relation to meetings concerning
the appointment of his successor. At the
invitation of the Committee, the Group CEO,
Vineet Bhalla, the Group Director of Human
Resources, the interim Group Director of
Human Resources, and the Communications
Director were invited to attend meetings from
time to time.
Set out below is a summary of the main
activities of the Committee in the year.
Chair Appointment
As outlined in his introductory letter, the
Chair will step down from his role in July
2022 following 10 years on the Board and
four years as Chair. A selection process
for a new Chair was led by the Senior
Independent Director (‘SID’), Vincent
Crowley, and the Committee, with assistance
from the Company Secretary and Group
General Counsel and the Group Director of
Human Resources. The current Chair was
not involved in the selection process.
Existing Non-Executive Directors were
asked if they wished to be considered for
the role of Chair. It was agreed an external
search process was suitable. As part of
the external search process, the services
of an executive search firm were used to
identify potential candidates. The Committee
considered the credentials of a number of
search consultants before recommending
the appointment of Spencer Stuart, which is
a signatory to the voluntary code of conduct
for executive search firms. Spencer Stuart is
used from time to time by the Group for the
recruitment of senior executives, but does
not have any other connection to the Group
or with individual Directors.
The Company did not use open advertising
to search for suitable candidates for the
role as we believe that the optimal way
of recruiting for this position is to use
targeted recruitment based on the skills and
experience required.
As an initial step, the Committee agreed
a role profile with Spencer Stuart, which
referred to the following characteristics and
experience:
• Experience as a Chair;
• City/investor experience;
• FTSE 250 plc experience and an
understanding of the UK corporate
governance environment;
• Broad sector experience, with an
emphasis on business to business and
business to customer environments within
the beverage industry;
• A reputation for delivering shareholder
value; and
• A positive match with the culture of the
Group and the members of the Board.
The search from Spencer Stuart was
rigorous and international in its scope.
The Committee considered an extensive
list of potential candidates, both internally
and externally, with the skills, knowledge
and experience required. The candidates
included in the initial list for the Committee
were of diverse backgrounds in its widest
sense (gender, nationality, age, experience,
ethnicity and social backgrounds). The
Committee unanimously selected Ralph
Findlay as its preferred candidate. Ralph,
brings extensive drinks industry experience
to the Company. Ralph held a senior
role at Marston’s for 25 years and has a
deep understanding of the beverage and
hospitality sector in the UK, one of our core
markets, and internationally. He also brings
extensive listed company board experience.
Following the Committee’s recommendation
and due consideration by the Board,
Ralph Findlay was appointed our new
Chair designate on 16 September 2021,
joined the Board on 1 March 2022 and will
succeed Stewart Gilliland on 7 July 2022.
The Board is pleased to have recruited an
individual with his experience and expertise
to chair the Group.
Induction of New Board Members
When a new Board member joins
the Company they receive a formal,
comprehensive and tailored induction
designed to suit their individual needs
and their role. The induction programme
includes activities and meetings with key
personnel, technical meetings and site
visits. This is an effective way of introducing
them to the Group’s culture and of ensuring
that they have the information and support
they need to understand the business and
to enable them to be productive in their role.
Chair Induction
The induction programme for Ralph
Findlay has included meetings with senior
management and operational and functional
teams around the Group and was structured
to help Ralph gain an insight into how the
business works on a day to day basis and to
understand its strategic priorities, purpose,
culture, values and people.
Since joining, Ralph has held a series of
meetings including one to one sessions
with Board colleagues, senior management,
business unit and functional heads and
has also undertaken visits to key locations
in the Group. These visits gave Ralph an
opportunity to meet with local management
teams and other colleagues and to speak
with them first hand and to listen to their
views.
110 C&C Group plc Annual Report 2022
Arrangements will be made for Ralph
to meet with the Company’s major
shareholders to discuss areas of
shareholder interest including performance
and future opportunities following his
appointment as Chair.
New Non-Executive Director
During the year, the Committee continued
to review the skills and composition of the
Board and identified an opportunity to bring
more digital and technology experience into
its deliberations. A thorough process was
undertaken by the Committee to identify and
assess a number of potential candidates.
A boutique executive search firm, Audeliss
was instructed to assist with the search
for the new appointment. The search firm
signed up to the Voluntary Code of Conduct
and does not have any other connection
to the Company or with any individual
Directors, other than to provide recruitment
services. Open advertising was not used for
this position.
To enhance the Board’s collective capability
and aid us on our journey to meet our
strategic objectives, the Committee
recommended the appointment of
Vineet Bhalla, noting, in particular, that
the appointment would bring strong
digital experience as an experienced IT
professional, latterly with Burberry as
Chief Technology Officer and previously
as Head of IT for Unilever for their digital
marketing and research and development
divisions. The Committee also noted that
this appointment would demonstrate
the Company’s broader commitment to
diversity. In making this recommendation,
the Committee also satisfied itself that
Vineet Bhalla met the independence criteria
of the Code and took into account his
other significant commitments and the time
involved, as disclosed to the Committee.
The Committee’s recommendation resulted
in Vineet Bhalla’s appointment to the Board
as a Non-Executive Director with effect from
26 April 2021.
Other Board Changes
In July 2021, we announced that Andrea
Pozzi, Chief Operating Officer (‘COO’)
and Jim Clerkin, Non-Executive Director,
had each decided to step down from
their respective Board roles, with effect
from 1 September and 27 October 2021
respectively. The Group was pleased to
announce that Andrea would remain with
the Company and had agreed to take up
the role of managing our combined GB
businesses, aligning management structures
and guiding us through a significant change
programme of simplification and integration.
The Company did not replace the Executive
Director role of COO and current Board
responsibilities associated with that position
are being fulfilled by the remaining Executive
Directors.
In addition, Jim Clerkin advised the Board
that, as a consequence of his increased
work responsibilities in the USA, he was
finding it increasingly difficult to give the
necessary time commitment required as a
Non-Executive Director of the Company.
After four years on the Board, Jim decided
to take the decision to step down from his
position in October 2021.
Re-appointment of Directors
The Committee considers the selection
and reappointment of directors carefully
before making a recommendation to
the Board. The Board is conscious of
the length of tenure of non-executives
when formulating its succession planning
process. Non-Executive Directors and the
Chair are generally appointed for a period
of three years, which may be renewed for
a further two terms. Notwithstanding the
appointment of three years, in line with
good governance practice, all Directors are
put forward for re-election by shareholders
annually at the AGM providing shareholders
with the opportunity to express their
confidence and support for the Board as a
whole and each Director individually.
Succession Planning
The Board plans for its own succession,
with the support of the Committee. The
Committee remains focused, on behalf of
the Board, on succession planning for both
Executive and Non-Executive Directors.
The Committee aims to ensure that:
• the succession pipeline for senior
executive and business critical roles in
the organisation is strong and diverse;
• processes are in place to identify
potential successors and manage
succession actively;
• there is a structured approach to
developing and preparing possible
successors; and
• processes are in place to identify “at risk”
posts.
As part of the Board changes in the
course of the year, the Committee had
reason to extensively consider succession
planning for both Board and senior
management roles. The Committee
reviewed the management structures
proposed in combining the GB businesses.
Subsequently, the Committee have been
engaged in reviewing succession plans,
together with job evaluation and grading of
roles across the entire Group, with the aim
of creating a harmonised and consistent
approach to succession planning across
the Group.
On at least an annual basis, each Director’s
intentions are discussed with regard to
continued service on the Board and their
succession is considered in the context of
the composition of the overall Board and
the corporate governance guidance on
non-executive tenure. This transparency
allows for an open discussion about
succession for each individual, both for
short term emergency absences as well as
longer term plans.
Corporate
Governance
Business
& Strategy
Financial
Statements
111
Nomination CommitteeReport
(continued)
As in previous years, we conducted an
analysis of the balance of experience,
skills, gender and diversity on the Board
as a whole, taking account of the future
needs of the business in the light of the
business strategy, the Board changes set
out above, and the knowledge, experience,
length of service and performance of the
Directors, including their ability to continue
to contribute effectively to the Board. In
accordance with our policy, we also had
regard to the requirement to achieve a
diversity of characters, backgrounds,
experience and gender amongst Board
members.
Skills Balance and Directors’
Performance Evaluation
During the year, the Committee also
considered the composition of the Board
and each of its Committees. The Committee
continues to actively review the long
term succession planning process for
Directors to ensure the structure, size and
composition (including the balance of skills,
experience, independence, knowledge
and diversity (including gender, ethnic and
social backgrounds)) of the Board and
its Committees continues to be effective,
promoting the Group’s ability to deliver its
strategy.
As part of its review, the Committee
considered the performance and
independence of Vineet Bhalla, Jill
Caseberry, Vincent Crowley, Emer Finnan,
Helen Pitcher and Jim Thompson, each
of them having confirmed their willingness
to stand for re-election at the forthcoming
AGM.
During FY2020, an external evaluation was
carried out, meaning that the evaluation
in FY2022 was carried out on an internal
basis. Having undertaken a performance
evaluation of both the Board and individual
Directors, the Committee considered that the
independence of each of the Non-Executive
Directors, being Vineet Bhalla, Jill Caseberry,
Vincent Crowley, Emer Finnan, Helen Pitcher
and Jim Thompson. In assessing their
independence, the Committee has had
due regard to various matters which might
affect, or appear to affect, the independence
of certain of the directors. The Committee
was fully satisfied that each remained
fully independent in both character and
judgement.
In determining the independence of Stewart
Gilliland, the Group had regard to the
sales made to Tesco plc, of which Stewart
Gilliland is a Non-Executive Director. The
Committee remains fully satisfied that that
the relationship is free of conflict, given a
non-executive position is held and Stewart
Gilliland is not close to the negotiation of
any contract between the two companies.
In determining the independence of Jill
Caseberry, the Group had regard to the
products purchased from St Austell Brewery
Company Limited, of which Jill Caseberry is
a Non-Executive Director. The Committee
remains fully satisfied this relationship is not
material and has in no way impaired her
independence. Additionally, in determining
the independence of Emer Finnan, the
Group had regard to the sales made to
and products purchased from Britvic plc,
of which Emer Finnan is a Non-Executive
Director, and was satisfied that this in no way
impaired her independence.
The Committee had also undertaken a review
of each of the Non-Executive Directors’
other interests, external time commitments
and tenure, such review being particularly
rigorous in the case of Emer Finnan having
served eight years on the Board, and has
concluded that Emer is independent in
character and judgement and that there
are no relationships or circumstances likely
to affect (or which appear to affect) her
judgement. The Committee is also satisfied
that Emer continues to be able to devote
sufficient time to their role.
No Director participated in the evaluation of
his/her own performance, independence or
time commitments.
The Committee was satisfied that the
Board has the appropriate balance of
relevant skills, experience, independence
and knowledge of the Group to enable it to
discharge its duties to lead and steward the
business.
Diversity
As a people focused business, our strength
comes from an inclusive and welcoming
environment, where we recognise that the
experiences and perspectives which make
us unique come together in our shared
values and vision. We strongly believe that
the more our colleagues reflect the diversity
of our clients and consumers, the better
equipped we are to service their needs.
We have a Diversity and Inclusion Policy,
which is published on the Company’s
website. The Committee is satisfied that
it supports the development of a more
diverse workforce within the business and
is consistent with the Group’s inclusive
and welcoming culture. The policy equally
applies to our Board members and all of
our employees, regardless of their contract,
location or role in the business. We aim to
ensure our inclusivity applies to all aspects
of their careers, including recruitment,
selection, benefits and opportunities for
training and promotion. As at 28 February
2022, the percentage of female directors on
the Board was 33%, as was the percentage
of females on the Executive Committee.
More details on workforce diversity can be
found on page 113.
112 C&C Group plc Annual Report 2022
Our vision is to be an employer of choice,
with a rich and diverse mix of people who
reflect the societies and communities in
which we work and operate. C&C is a great
place to work and our policy reinforces
our commitment to equality, diversity and
inclusion and to having a truly representative
workforce where every member feels
respected, valued and able to be their best.
We want to ensure that equality, diversity
and inclusion is a core part of how we
operate, it’s embedded in our culture, and
reflected in our people and their behaviours.
In FY2022, we conducted a diversity and
inclusion survey, “Getting to know you”, to
better understand our colleagues and their
needs, to gain their views on inclusion and
wellbeing and to obtain identity (diversity
demographics) data. Subsequently,
the Committee received a presentation
regarding proposals to establish in FY2023
employee relations groups in the areas
of mental health and wellbeing, physical
health and parents returning to work as
one of a number of intended concrete
and meaningful steps to reinforce our
commitment to diversity and inclusion.
We are committed to:-
• Reviewing and adapting our policies and
procedures to ensure workforce diversity
and equal opportunities;
• Implementing initiatives that drive an
inclusive culture where all employees feel
accepted and valued;
• Promoting a more inclusive environment,
which attracts all candidates and signals
our commitment to celebrate and
promote diversity;
• Taking an inclusive approach to ensure
we attract a diverse pool of talent and
experience;
• The use of clear statements which
promote equality and inclusion within the
recruitment process;
• Training our managers and wider teams
to increase cultural diversity, awareness,
knowledge and skills;
• Encouraging our people to share their
experiences and help each other to
understand more about what diversity
and inclusion means;
• Authentically telling our diversity and
inclusion story and celebrating our
approach, both inside and outside our
organisation.
Statistical gender diversity employment data
for the Company as at 28 February 2022 is
as follows:
Male Number/
Percentage
Female Number/
Percentage
Directors 6/67% 3/33%
Senior
Managers
58/64% 32/36%
Other
employees
1,913/75% 647/25%
Time Commitment
In line with its terms of reference, the
Committee performs an annual review
of the time required from the Chair, SID
and Non-Executive Directors to perform
their duties. As part of this process,
the Committee reflects on a director’s
attendance at scheduled meetings and
their availability at other times during the
year. In the year under review, the Directors
were available, often at short notice and
outside regular working hours, to discuss
matters that required a prompt decision, for
example, the consideration and oversight of
the various strategies employed during the
year to navigate the impact of the COVID-19
pandemic upon the business.
Evaluation of the Committee
During FY2020, an external evaluation was
carried out, meaning that the evaluation
in FY2022 was carried out on an internal
basis as part of the FY2022 internal Board
evaluation process. An explanation of
how this process was conducted, the
conclusions arising from it and the outcome
of that review can be found on page 98.
This report was approved by the Board of
Directors on 17 May 2022.
Stewart Gilliland
Chair of the Nomination Committee
Corporate
Governance
Business
& Strategy
Financial
Statements
113
Nomination CommitteeReport
(continued)
Diverse and Effective Board
The Board comprises 10 Directors,
with a broad and complementary set
of technical skills, educational and
professional experience, nationalities,
personalities, cultures and perspectives.
B
oard balance
Independence
Gender diversity
Ethnicity
Age Range
40-50 2
51-60 3
61-70 5
0-3 years 7
4-7 years 1
8-10 years 2
Irish 4
British 5
USA 1
Chair 1
Independent 7
Non-independent 2
Male 7
Female 3
White 9
Indian 1
Tenure
Nationality
114 C&C Group plc Annual Report 2022
Board Skills Matrix
Executive Directors
Non-Executive Directors
Director
David
Forde
Patrick
McMahon
Stewart
Gilliland
Vineet
Bhalla
Jill
Caseberry
Vincent
Crowley
Ralph
Findlay
Emer
Finnan
Helen
Pitcher
Jim
Thompson With skill Without skill
Independence
• • • • • • •
Core Industry
• • • • • •
Senior Executive
• • • • • • •
Finance/Audit & Risk
• • • • •
Legal/Public Policy
•
Manufacturing/
Supply Chain
• • • •
Communications/
Marketing/
Customer Service
• • • •
International Markets
• • • • • • • •
UK and Ireland
Pubs Exp
• • • • •
M&A/Capital Markets
• • • • • •
Digital/Technology
•
Corporate
Governance
Business
& Strategy
Financial
Statements
115
Dear Shareholder
On behalf of the Board, I
am pleased to present the
Directors’ Remuneration
Committee Report (‘Report’)
for the year ended 28 February
2022.
The Company is incorporated in Ireland
and is therefore not subject to the UK
company law requirement to submit its
Directors’ Remuneration Policy (‘Policy’) to
a binding vote. Nonetheless, in line with our
commitment to best practice, at the AGM in
July 2021, our revised Policy was approved
by our shareholders on an advisory basis,
with a vote in favour of over 90%. As no
changes to the Policy are proposed this
year, the Policy will not be subject to a vote
at the 2022 AGM. Therefore, we have not
included the full Policy in this report, but
have included those parts that we think
shareholders will find most useful. The full
Policy is included in the Annual Report and
Accounts for the year ended 28 February
2021, which is available on the Company’s
website at www.candcgroup.com.
Last year, shareholders showed a high
level of support for our Report with over
90% of votes in favour of it. We hope that
shareholders will demonstrate their support
again this year.
Information on the membership of the
Remuneration Committee and its main
activities in FY2022 is set out on page 119.
Having taken into account a number of
internal and external measures as well as the
pay ratio analysis, the Committee believes
the proposed remuneration decisions in
this report appropriately reflect the needs
of the business and long-term interests of
shareholders. The Committee also believes
the Policy operated as intended in terms
of reflecting Company performance and
the overall level of quantum delivered was
considered appropriate given the business
context.
Business context including Wider
Workforce Remuneration
FY2022 has seen the reopening of the
on-trade across our core markets and a
return to profit and cash generation for the
Group. However, the COVID-19 pandemic
has continued to impact the lives of many
of us as well as our financial performance
(excluding exceptional items, FY2022
operating profit was €47.9m whereas
FY2020 operating profit was €120.8m).
It has, as a consequence, impacted on
individuals' reward opportunities during
the year both in terms of salary increases
and bonus, and as a Committee we have
been mindful of this, particularly having
regard to the tenacity and tireless work
of our colleagues who have navigated
these challenges. We have taken all these
factors into account, along with the impact
on our shareholder experience, in all our
considerations.
The Committee in the past year has been
examining the financial and commercial
impact for adopting, as a minimum pay rate,
the real Living Wage (as promulgated by The
Living Wage Foundation) for all employees
(rather than the UK’s National Living Wage).
The Committee has also been engaged in
considering the overall level of all colleague
benefits, including pension contribution
allowances.
As a consequence, and in conjunction
with new pressures on colleague attraction
and retention in light of the well publicised
driver and warehouse shortages within the
UK, salary increases were made for drivers
and drivers' mates. In addition, we have
moved colleagues to a base hourly rate
significantly above the real Living Wage from
1 March 2022. Further, a 3.5% increase
for senior management and the wider
workforce has been approved with effect
from 1 March 2022. This recognises the
challenging period ahead, the commitment
of our workforce and the aim to return the
Company to growth.
As in previous years, I along with the rest
of my Board colleagues remain committed
to engaging with our employees on a wide
range of topics, including remuneration
and ensuring their views are shared
with the Committee. A programme of
meetings is currently being developed in
that regard. My role as the Non-Executive
Director responsible for engaging with HR
is an invaluable resource when reviewing
wider employee incentive arrangements.
I plan during those meetings to outline
our Company-wide remuneration policy
and director and wider workforce pay and
reward matters, sharing our aspirations
around equitable rewards and discussing
the increasing use of ESG measures in goal
setting and shareholder expectations.
We announced on 29 July 2021 that Andrea
Pozzi, our former Chief Operating Officer,
would step down from the Board with effect
from 1 September 2021. Andrea remains
with the business in a new role managing
our combined GB businesses, aligning
management structures and guiding us
through a significant change programme
Directors’ Remuneration Committee Report
116 C&C Group plc Annual Report 2022
of simplification and integration. Andrea’s
remuneration to the end of August is
included in the Single Total Figure of
Remuneration on page 127. As he remained
with the business, Andrea’s existing
incentive awards continued on their existing
terms. Andrea did not earn a bonus for
FY2022 and his LTIP granted in FY2020
with a three year performance period ended
28 February 2022 lapsed following the end
of FY2022.
Executive Remuneration Outcomes
for FY2022
Salary
As reported last year, Executive Directors’
salaries remain unchanged for FY2022.
FY2022 Bonus
In light of continued market uncertainty, no
annual bonus targets were set for the first
half of the financial year. In the second half
of the financial year, annual bonus targets
were set for colleagues (excluding Executive
Directors), however, due to the continuing
restrictions on the drinks and hospitality
industry and the impact of this on our
performance, no annual bonus in respect of
the year ended 28 February 2022 was able
to be paid to any employees.
2019 LTIP Awards
The 2019 LTIP granted to Patrick McMahon
before he joined the Board in July 2020 had
a three-year vesting period which ended
on 11 February 2022, with the performance
conditions assessed over the three financial
years ended at the end of FY2021. The
threshold level of performance was not
achieved and the award lapsed in full.
Andrea Pozzi’s LTIP granted in FY2020
with a three year performance period
ended 28 February 2022 lapsed following
the end of FY2022 as the threshold level
of performance was not achieved, as
explained above. David Forde did not hold
any awards under the 2019 LTIP.
Long-Term Incentives Awarded in FY2022
In June 2021 the Committee made awards to the Executives under the LTIP. Performance
measures and targets for the FY2022 LTIP awards were determined having regard to
the uncertain and unprecedented economic environment associated with COVID-19, its
already significant and disproportionate impact on the business and the industry compared
to the broader economy and the associated forward looking continued uncertainty.
The Committee determined that for the FY2022 LTIP, awards would vest subject to
the satisfaction of performance metrics based on earnings per share, free cash flow
and an environmental metric to give impetus to the Group’s sustainability agenda and
decarbonisation efforts, as set out below.
The vesting of the FY2022 LTIP awards will be subject to an assessment of the Company’s
underlying financial performance across the three-year performance period FY2022 –
FY2024.
Weighting Measure Further detail
45% Earnings
per share
Threshold (25% vesting)– 22c
Maximum – 27c
By the end of year 3 target range (end of FY2024) rather than
as a cumulative target.
35% Free
cash flow
conversion
Threshold (25% vesting) – 65%
Maximum – 75%
By the end of year 3 target range (end of FY2024) rather than
as a cumulative target.
20% Environmental
target
To reduce Scope 1 emissions and Scope 2 emissions* over
the three financial years ending with FY2024 as follows:
Threshold (25% vesting) – 6% reduction
Maximum – 12% reduction
*Definitions
Scope 1 – direct emissions from owned or controlled sources, which includes
emissions from company-owned or operated facilities and vehicles.
Scope 2 – Indirect emissions from the generation of purchased energy e.g.
electricity, steam, heat and cooling.
No award will vest until the end of the full three-year period, and Executive Directors’ awards
will then be subject to a further two year holding period.
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FY2021 LTIP Awards
In the Report for FY2021, we explained that
the LTIP awards for that year were subject to
an assessment of the Company’s underlying
financial performance across the three-year
performance period FY2021 – FY2023,
along with three separate performance
conditions aligned to the Company’s key
priorities for each of the three years. The
separate performance condition for FY2021
was disclosed in the FY2021 report.
The performance condition for FY2022 is
based on the Net Debt to EBITDA ratio for
FY2022 as set out below.
Net Debt to EBITDA ratio Vesting
Greater than 4.1x 0%
4.1x
1
25%
3.8x
1
100%
1. Straight line vesting between 4.1x and 3.8x
Details of the FY2023 condition will
be disclosed in the FY2023 Directors’
Remuneration Committee Report.
Governance
The Committee has defined Terms of Reference which can be found in the Investor Centre
section of the Group’s website. A copy may be obtained from the Company Secretary.
Remuneration Committee Membership and Meeting Attendance
The following Non-Executive Directors served on the Committee during the year:
Member Member since
Number of Meetings
Attended
Maximum Possible
Meetings
Helen Pitcher (Chair) 1 March 2019 13 13
Vineet Bhalla 27 October 2021 2 2
Jill Caseberry
1
1 March 2019 12 13
Jim Clerkin
2
24 October 2019 10 11
1. Jill Caseberry was unable to attend the meeting on 16 September 2021 due to a prior engagement.
2. Jim Clerkin was unable to attend the meeting on 7 December 2021 due to a prior engagement.
All members of the Committee are and were considered by the Board to be independent.
Directors’ Remuneration Committee Report
(continued)
The quorum necessary for the transaction
of business is two, each of whom must be
a Non-Executive Director. Only members
of the Committee have the right to attend
committee meetings, however, during
the year, the Chair, the Group CEO, the
Group CFO, the Group Director of Human
Resources, the interim Group Director
of Human Resources, members of the
finance team, HR and ESG teams, along
with representatives from Clifford Chance
solicitors and Deloitte, remuneration
advisers, were invited to attend meetings
(although never during the discussion of any
item affecting their own remuneration or
employment).
The Company Secretary is Secretary to the
Committee.
Implementation of the Remuneration
Policy in FY2023
Our approach to the implementation of the
Policy in FY2023 is set out on pages 120 to
125.
Rights Issue
In June 2021 the Board undertook a
Rights Issue raising £151.2m to facilitate
the Group’s recovery from the impact of
the pandemic and to materially improve
the Company’s ability to deliver long-term
value to shareholders through providing the
Group with the flexibility to take advantage
of strategic and investment opportunities.
We thank our shareholders for their support
in the process.
In accordance with standard practice we
have adjusted the number of shares subject
to outstanding share awards and, where
applicable, the exercise price, to reflect the
impact of the Rights Issue.
Gender Pay Gap Disclosure
In April 2022 we published our latest Gender
Pay Gap report for those entities with more
than 250 UK employees, namely, Matthew
Clark Bibendum Limited and Tennent
Caledonian Breweries Limited. Details can
be found on each business’s respective
website.
We are committed to promoting equality,
diversity and inclusion as we build a culture
where everyone can progress. This includes
ensuring that our colleagues are paid a
fair and equitable rate for the work they do
regardless of gender or other differences.
Going forward we will continue to focus on
areas that improve our gender pay gap.
Conclusion
I would like to express my appreciation to
our shareholders for their continued support
during FY2022 and ahead of the next AGM.
Helen Pitcher OBE
Chair of the Remuneration Committee
17 May 2022
118 C&C Group plc Annual Report 2022
Main Activities in FY2022
• Approval of the FY2021 bonus and LTIP
measures;
• Approval of the Directors’ Remuneration
Committee Report for the financial year
ended 28 February 2021;
• Reviewing and consulting with
shareholders on the revised Directors’
Remuneration Policy and incorporation of
their feedback, where applicable;
• Considering the impact of COVID-19
on the Executive and all employee
remuneration arrangements, ensuring the
alignment of executive compensation with
the wider stakeholder experience;
• Approval of the FY2022 bonus and LTIP
measures;
• Considering the Rights Issue in relation to
employee share plans;
• Considering the results and implications
of the UK gender pay gap report
and reviewing and commenting on
recommendations to address the gap and
challenges faced by the sector;
• Examining the financial and commercial
impact for adopting, as a minimum pay
Remuneration at a glance
Remuneration Outcomes as at 28 February 2022
Element David Forde Patrick McMahon
Base salary as at 28 February 2022 – as set out in last year’s Report, no changes were made
to Executive Directors’ salaries for FY2022 €690,000 €420,000
Pension (% of base salary) 5% 5%
Benefits 7.5% 7. 5%
Annual Bonus N/A
1
N/A
1
LTIP (% of max) N/A
2
N/A
2
1 As noted above, neither Executive Director was eligible to earn a bonus in respect of FY2022.
2 Neither David Forde nor Patrick McMahon had an LTIP capable of vesting by reference to performance in FY2022.
rate, the real Living Wage (as promulgated
by The Living Wage Foundation) for all
employees (rather than the UK’s National
Living Wage);
• Commencing a review to evaluate and
grade each role, leading to the creation of
a framework for consistent, transparent
and appropriate compensation and
benefits group wide;
• Considering and recommending to
the Board the terms of Ralph Findlay’s
appointment as Chair;
• Considering the remuneration
arrangements of Executive Committee
members and senior management; and
• Considering the FY2023 remuneration
structure.
External Advisers
The Committee seeks and considers advice
from independent remuneration advisers
where appropriate. During the year ended
28 February 2022, the Committee obtained
advice from Deloitte LLP. Deloitte’s fees for
this advice amounted to £14,365 (excluding
VAT) charged on a time or fixed fee basis.
Deloitte is one of the founding members
of the Remuneration Consultants’ Code of
Conduct and adheres to this Code in its
dealings. The Committee is satisfied that
the advice provided by Deloitte is objective
and independent. The Committee is
comfortable that the Deloitte engagement
team that provide remuneration advice to
the Committee do not have connections
with the Company that may impair their
independence.
Committee Evaluation
The evaluation of the Committee was
completed as part of the 2022 internal
board evaluation process. An explanation
of how this process was conducted, the
conclusions arising from it and the action
items identified are set out on page 98.
The Committee has considered this in the
context of the matters that are applicable to
the Committee.
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Directors’ Remuneration Committee Report
(continued)
Remuneration Policy
Introduction
The current Remuneration Policy for Directors was approved at the 2021 AGM. As no changes to the Policy are proposed this year, the
Policy will not be subject to a vote at the 2022 AGM. Therefore, we have not included the full Policy in this report, but have included those
parts that we think shareholders will find most useful; the full Policy is included in the Annual Report and Accounts for the year ended 28
February 2021, which is available on the Company’s website at www.candcgroup.com.
Policy Table
Executive Directors
The table below sets out the Company’s Remuneration Policy for Executive Directors.
Purpose and link to strategy Operation Maximum opportunity Performance metrics
Salary
Reflects the
individual’s role,
experience and
contribution.
Set at levels to
attract, recruit and
retain Directors of the
necessary calibre.
Salaries are set by the Committee taking
into account factors including, but not
limited to:
• scope and responsibilities of the role;
• experience and individual
performance;
• overall business performance;
• prevailing market conditions;
• pay in comparable companies; and
• overall risk of non-retention.
Typically, salaries are reviewed annually,
with any changes normally taking effect
from 1 March.
While there is no prescribed
formulaic maximum, any
increases will take into account
the outcome of pay reviews
for employees as a whole.
Larger increases may be
awarded where the Committee
considers it appropriate to
reflect, for example:
increases or changes in scope
and responsibility;
to reflect the Executive
Directors’ development and
performance in the role; or
alignment to market level.
Increases may be implemented
over such time period as
the Committee determines
appropriate.
None.
Benefits/cash allowance in lieu
Ensures that benefits
are sufficient to recruit
and retain individuals
of the necessary
calibre.
The Group seeks to bring transparency
to Directors’ reward structures through
the use of cash allowances in place of
benefits in kind. The cash allowance
can be applied to benefits such as
a company car and health benefits.
Group benefits such as death in service
insurance are also made available.
Other benefits may be provided based
on individual circumstances including
housing or relocation allowances, travel
allowance or other expatriate benefits.
Benefits and allowances are reviewed
alongside salary.
There is no prescribed
maximum monetary value of
benefits.
Benefit provision is set at a
level which the Committee
considers appropriate against
the market and relative to
internal benefit provision in
the Group and which provides
sufficient level of benefit based
on individual circumstances.
None.
120 C&C Group plc Annual Report 2022
Purpose and link to strategy Operation Maximum opportunity Performance metrics
Pension/cash allowance in lieu
Contributes towards
funding later life cost
of living.
Executive Directors may participate in
the Company’s defined contribution
pension scheme or take a cash
allowance in lieu of pension entitlement
(or a combination thereof).
A contribution and/or cash
allowance not exceeding the
level available to the majority of
the Group’s workforce.
None.
Annual bonus
Motivates employees
and incentivises
delivery of annual
performance targets
which support the
strategic direction of
the Company.
Bonus levels are determined after the
year end based on performance against
targets set by the Committee.
The Committee has discretion to
vary the bonus pay out should any
formulaic output not reflect the
Committee’s assessment of overall
business performance, or if the
Committee considers the pay-out to
be inappropriate in the context of other
relevant factors including to avoid
outcomes which could be seen as
contrary to shareholder expectations.
Up to 50% of any bonus earned will
ordinarily be paid in cash with the
remainder deferred into shares, for up to
three years.
Additional shares may be delivered in
respect of deferred bonus award shares
to reflect dividends over the deferral
period. The number of additional
shares may be calculated assuming the
reinvestment of dividends on such basis
as the Committee determines.
Malus and clawback provisions will
apply to the annual bonus. See the
“Malus and clawback” section below for
more details.
Maximum opportunity is 125%
of base salary.
Performance is ordinarily
measured over the financial
year. The Committee has
flexibility to set performance
measures and targets annually,
reflecting the Company’s
strategy and aligned with key
financial, operational, strategic
and/or individual objectives.
The majority of the bonus
will be based on financial
measures, such as profit and
cash. The balance of the bonus
will be based on financial or
strategic targets such as brand
equity and our ESG goals.
In the case of financial
measures, 25% of the bonus
will be earned for threshold
performance increasing to
50% for on-target performance
and 100% for maximum
performance.
For non-financial measures, the
amount of bonus earned will be
determined by the Committee
between 0% and 100% by
reference to its assessment of
the extent to which the relevant
metric or objective has been
met.
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Purpose and link to strategy Operation Maximum opportunity Performance metrics
LTIP
Incentivises Executive
Directors to execute
the Group’s business
strategy over the
longer term and aligns
their interests with
those of shareholders
to achieve a
sustained increase in
shareholder value.
Awards are made in the form of nil-cost
options or conditional share awards, the
vesting of which is conditional on the
achievement of performance targets (as
determined by the Committee).
Vested awards must be held for a further
two year period before sale of the shares
(other than to pay tax). This holding period
can be operated on the basis that:
• awards vest following the assessment
of the applicable performance
conditions but will not be released (so
that the participant is entitled to acquire
shares) until the end of a holding period
of two years beginning on the vesting
date; or
• the participant is entitled to acquire
shares following the assessment of
the applicable performance conditions
but that (other than as regards sales
to cover tax liabilities) the award is not
released (so that the participant is able
to dispose of those shares) until the end
of the holding period.
The Committee retains discretion to adjust
the outturn of an LTIP award, including
to override the formulaic outcome of the
award, in the event that performance
against targets does not properly reflect
the underlying performance of the
Company, or if the Committee considers
the pay-out to be inappropriate in the
context of other relevant factors including
to avoid outcomes which could be seen
as contrary to shareholder expectations.
Additional shares may be delivered in
respect of vested LTIP award shares to
reflect dividends over the vesting period
and, if relevant, the holding period. The
number of additional shares may be
calculated assuming the reinvestment
of dividends on such basis as the
Committee determines.
Awards may be made up to
150% of salary in respect of
any financial year.
In exceptional circumstances
the maximum award is 300%
of salary in respect of any
financial year.
Vesting is based on the
achievement of challenging
performance targets measured
over a period of three years.
Performance may be assessed
against financial measures
(including, but not limited to,
EPS and Cash Conversion)
and operational or strategic
measures (which may include
ESG measures) aligned with
the Company’s strategy,
provided that at least 75% of
the award is based on financial
measures.
For the achievement of
threshold performance against
a financial measure, no more
than 25% of the award will
vest, rising, ordinarily on a
straight-line basis, to 100% for
maximum performance; below
threshold performance, none of
the award will vest.
For non-financial measures,
the amount of the award that
vests will be determined by
the Committee between 0%
and 100% by reference to its
assessment of the extent to
which the relevant metric or
objective has been met.
Directors’ Remuneration Committee Report
(continued)
122 C&C Group plc Annual Report 2022
Purpose and link to strategy Operation Maximum opportunity Performance metrics
Share-based rewards – all-employee plans
Align the interests of
eligible employees
with those of
shareholders through
share ownership.
The C&C Profit Sharing Scheme is an
all-employee share scheme and has two
parts.
Part A relates to employees in Ireland
and has been approved by the Irish
Revenue Commissioners (‘the Irish
APSS’). Part B relates to employees
in the UK and is a HMRC qualifying
plan of free, partnership, matching or
dividend shares (or cash dividends) with
a minimum three year vesting period
for matching shares (‘the UK SIP’). UK
resident Executive Directors are eligible
to participate in Part B only.
There is currently no equivalent plan for
Directors resident outside of Ireland or
the UK.
Under the Company’s
Irish APSS, the maximum
value of shares that may be
allocated each year is as
permitted in accordance with
the relevant tax legislation
(currently €12,700, which
is the combined value for
the employer funded and
employee foregone elements).
Under the Company’s UK SIP
the current maximum value of
partnership shares that may be
acquired is £750 per annum,
with an entitlement to matching
shares of £750 per annum.
However, the Committee
reserves the right to increase
the maximum to the statutory
limits (being £1,800 in respect
of partnership shares, £3,600
in respect of matching shares
and £3,600 in respect of
free shares, or in any case
such greater limit as may be
specified by the tax legislation
from time to time).
No performance conditions
would usually be required in
tax-advantaged plans.
Shareholding guidelines
In-service requirement
Executive Directors are required to build and maintain a personal shareholding of at least two times’ salary.
Executive Directors are required to retain 50% of the after tax value of vested share awards until the shareholding guideline is met.
Shares subject to awards which have vested but which remain unexercised, shares subject to LTIP awards which have vested but not been
released (i.e. which are in a holding period) and shares subject to deferred bonus awards count towards the shareholding requirement on a
net of assumed tax basis.
Post-employment requirement
The Committee has adopted a post-employment requirement. Shares are subject to this requirement only if they are acquired from LTIP or
deferred bonus awards granted after 1 March 2021. For the first year after employment the Executive Director is required to retain such of
those shares as have a value equal to the “in-service” guideline, or their actual shareholding, if lower, and for a further year such of those
shares as have a value equal to half of the “in-service” guideline or their actual shareholding, if lower.
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Explanation of performance measures
Performance measures for the LTIP and annual bonus are selected by the Committee to reflect the Company’s strategy. In the case of both
the annual bonus and the LTIP, the majority of the award (at least 75% in the case of the LTIP) will be based on financial measures, with any
balance based on operational or strategic measures which reward the Executive Directors by reference to the achievement of objectives
aligned with future successful implementation of the Company’s strategy. The Committee has discretion to set performance measures
(and weightings where there is more than one measure) on an annual basis to take account of the prevailing circumstances. Measures and
weightings may vary depending upon an Executive Director’s area of responsibility.
Targets are set annually by the Committee having regard to the circumstances at the time and taking into account a number of different
factors.
To the extent provided for in accordance with any relevant amendment power under the rules of the share plans or in the terms of any
performance condition, the Committee may alter the performance conditions relating to an award or option already granted if an event
occurs (such as a material acquisition or divestment or unexpected event) which the Committee reasonably considers means that the
performance conditions would not, without alteration, achieve their original purpose. The Committee will act fairly and reasonably in making
the alteration so that the performance conditions achieve their original purpose and the thresholds remain as challenging as originally
imposed. The Committee will explain and disclose any such alteration in the next remuneration report.
Malus and clawback
In line with the UK Corporate Governance Code, malus and clawback provisions apply to all elements of performance-based variable
remuneration (i.e. annual bonus and LTIP) for the Executive Directors. The circumstances in which malus and clawback will be applied are
if there has been in the opinion of the Committee a material mis-statement of the Group’s published accounts, material corporate failure,
significant reputational damage, error in assessing a performance condition, or the Committee reasonably determines that a participant has
been guilty of gross misconduct. The clawback provisions will apply for a period of two years following the end of the performance period; in
the case of any deferred bonus award or LTIP award which is not released until the end of a holding period, clawback may be implemented
by cancelling the award before it vests/is released.
Executive Directors
Service Contracts
Details of the service contracts of the Executive Directors in office during the year are as follows:
Name Contract date Notice period Unexpired term of contract
David Forde 2 November 2020 12 months n/a
Patrick McMahon 8 July 2020 12 months n/a
Andrea Pozzi* 31 May 2017 12 months n/a
*Andrea Pozzi stepped down from the Board on 1 September 2021.
Directors’ Remuneration Committee Report
(continued)
124 C&C Group plc Annual Report 2022
Non-Executive Directors
The table below sets out the Company’s Remuneration Policy for Non-Executive Directors.
Purpose and link to strategy Operation Opportunity Performance metrics
Non-Executive Director fees
Attract and retain high calibre
individuals with appropriate
knowledge and experience
Fees paid to Non-Executive Directors are
determined and approved by the Board as
a whole. The Committee recommends the
remuneration of the Chair to the Board.
Fees are reviewed from time to time and
adjusted to reflect market positioning and
any change in responsibilities.
Non-Executive Directors are not eligible
to participate in the annual bonus plan or
share-based plans and, save as noted
below, do not receive any benefits (including
pension) other than fees in respect of their
services to the Company.
Non-Executive Directors may be eligible to
receive certain benefits as appropriate such
as the use of secretarial support, travel costs
or other benefits that may be appropriate.
If tax is payable in respect of any benefit
provided, the Company may make a further
payment to cover the tax liability.
Fees are based on the level
of fees paid to Non-Executive
Directors serving on Boards of
similar-sized listed companies
and the time commitment and
contribution expected for the
role.
The Articles of Association
provide that the ordinary
remuneration of Directors (i.e.
Directors’ fees, not including
executive remuneration) shall
not exceed a fixed amount
or such other amount as
determined by an ordinary
resolution of the Company.
The current limit was set at the
Annual General Meeting held in
2013, when it was increased to
€1.0 million in aggregate.
Not applicable.
Additional Fees
Provide compensation to Non-
Executive Directors taking on
additional responsibility
Non-Executive Directors receive a basic fee
and an additional fee for further duties (for
example chairship of a committee or Senior
Independent Director responsibilities) or time
commitments.
Not applicable.
Shareholding Guidelines
Provide alignment of interest
between Non-Executive
Directors and shareholders
Non-Executive Directors build up their
individual shareholding to 50% of their annual
base fee within 3 years of their appointment
or within 3 years from the date of approval of
the Remuneration Policy, if later.
An annual review against the guidelines is
put in place, after Q4, which would allow
25% of the fee to be invested into stock if the
current holding does not meet 50% of the
annual base fee. The fee and the share price
on the date of the fourth fee payment of the
year is the test of whether the guideline is
met.
Not applicable
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125
Letters of appointment
Each of the Non-Executive Directors in office at 28 February 2022 was appointed by way of a letter of appointment. Each appointment was
for an initial term of three years, renewable by agreement (but now subject to annual re-election by the members in General Meeting). The
letters of appointment are dated as follows:
Non-Executive Director Date of letter of appointment
Stewart Gilliland 17 April 2012 (Chair)
Vineet Bhalla 26 April 2021
Jill Caseberry 7 February 2019
Vincent Crowley 23 November 2015
Ralph Findlay 16 September 2021
Emer Finnan 4 April 2014
Helen Pitcher 7 February 2019
Jim Thompson 7 February 2019
The letters of appointment are each agreed to be terminable by either party on one month’s notice and do not contain any pre-determined
compensation payments in the event of termination of office or employment.
Directors’ Remuneration Committee Report
(continued)
126 C&C Group plc Annual Report 2022
Remuneration in detail for the Year ended 28 February 2022
Directors’ Remuneration (Audited)
The following table sets out the total remuneration for directors for the year ended 28 February 2022 and the prior year.
Single Total Figure of Remuneration – Executive Directors (Audited)
The table below reports the total remuneration receivable in respect of qualifying services by each Executive Director during the year ended
28 February 2022 and the prior year.
Salary/fees
(a)
Taxable benefits
(b)
Annual bonus
(c)
Long term
incentives
(d)
Pension related
benefits
(e)
Termination
payments
(f)
Miscellaneous
(g) Total
Year ended February 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Executive Directors
David Forde 690 230 52 17 - - - - 34 12 - - - 1,472 776 1,731
Patrick McMahon 420 255 33 19 - - - - 21 13 - - - - 474 287
Andrea Pozzi
1
188 311 14 27 - - - - 38 90 - - - - 240 428
Jonathan Solesbury
2
- 137 - 13 - - - - - 48 - 641 - 37 - 876
Total 1298 933 99 76 - - - - 93 163 - 641 - 1,509 1,490 3,322
The remuneration for Jonathan Solesbury and Andrea Pozzi was translated from Sterling using the average exchange rate for the relevant year. For Executive Directors who joined or
left in the year, salary, taxable benefits, annual bonus, long term Incentives and pension relates to the period in which they served as an Executive Director.
1. Figures for Andrea Pozzi are to 1 September 2021 (the date he left the Board).
2. Figures for Jonathan Solesbury are to 23 July 2020 (the date he left the Board) plus certain payments made to him in connection with the cessation of his employment on 31
August 2020 (as further described on page 125 in the 2021 Annual Report).
Details on the valuation methodologies applied are set out in Notes (a) to (g) below. The valuation methodologies are as required by the
Regulations and are different from those applied within the financial statements, which have been prepared in accordance with International
Financial Reporting Standards (“IFRS”).
Notes to Directors’ Remuneration Table
(a) Salaries and fees
The amounts shown are the amounts earned in respect of the financial year.
(b) Taxable benefits
The Executive Directors received a cash allowance of 7.5% of base salary. The Group provided death-in-service cover of four times annual
base salary and permanent health insurance (or reimbursement of premiums paid into a personal policy).
Patrick McMahon elected to participate in the Irish APSS during the year, an “all employee plan” for employees in Ireland. Under that plan,
the Company awarded a number of “free” shares in connection with his purchase of “contributory” shares, as permitted by the legislation.
The value of those shares at the date of the awards has been included in the taxable benefit column (€1,728). For more details on the Profit
Sharing Scheme, please see page 123.
(c) Annual bonus
No bonus scheme was implemented in FY2022 for Executive Directors due to the unpredictability of COVID-19.
(d) Long term incentives
1. The amounts shown in respect of long-term incentives are the values of awards where final vesting is determined as a result of the
achievement of performance measures or targets relating to the financial year and is not subject to achievement of further measures or
targets in future financial years.
2. The awards granted in May 2019 under the LTIP were subject to the performance conditions set out below. The threshold level of
performance was not achieved and the awards lapsed in full subsequent to the year end.
Annual Remuneration Report
Corporate
Governance
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& Strategy
Financial
Statements
127
LTIP Performance Conditions
Performance condition Weighting
Performance
target
% of element
vesting
Compound annual growth in Underlying EPS over the three year
performance period FY2020, FY2021 and FY2022 33%
Threshold 3% 25%
Maximum 8% 100%
Free cash flow Conversion 33%
Threshold 65% 25%
Maximum 75% 100%
Return on Capital Employed 33%
Threshold 9.3% 25%
Maximum 10% 100%
(e) Pensions related benefits
No Executive Director accrued any benefits under a defined benefit pension scheme. Under their service contracts, the Group’s current
Executive Directors received a cash payment of 5% of base salary in order to provide their own pension benefits as disclosed in column (e)
of the table. Andrea Pozzi’s pension provision reflects his legacy arrangements as described in the FY2021 Directors’ Remuneration Report.
(f) Termination payments
Jonathan Solesbury retired from the Board as Group Chief Financial Officer on 23 July 2020 and left the business on 31 August 2020.
Payments made to him after 23 July 2020 were included in the FY2021 Report.
(g) Miscellaneous
The miscellaneous payments were described in the FY2021 Report.
Additional Information
Fees from external appointments
None
Payments to Former Directors and Payments for Loss of Office
There were no payments to former Directors or payments for loss of office in FY2022 other than payments made to Andrea Pozzi in
connection with his ongoing employment by the Group following his stepping down from the Board with effect from 1 September 2021.
Directors’ Shareholdings and Share Interests
Shareholding guidelines
Executive Directors are required to build up (and maintain) a minimum holding of shares in the Company. Under the Policy, the Executive
Directors are expected to maintain a personal shareholding of at least two times’ salary,
Executive Directors are expected to retain 50% of the after tax value of vested share awards until at least the shareholding guideline has
been met.
Directors’ Remuneration Committee Report
(continued)
128 C&C Group plc Annual Report 2022
Executive Directors’ Interests in Share Capital of the Company (Audited)
The beneficial interests, including family interests, of the Directors and the Company Secretary in office at 28 February 2022 in the share
capital of the Company are detailed below:
28 February 2022
Total
1 March 2021
Total
Directors
David Forde 48,092 -
Patrick McMahon 87, 9 3 9 52,473
Total 136,031 52,473
The Executive Directors' progress towards satisfying the shareholding requirements is shown in the table below:
Director Shareholding Target value Value as at 28 February 2022*
David Forde 48,092 €1,380,000 €121,453
Patrick McMahon 87, 9 3 9 €840,000 €222,084
* The value is based on the number of shares multiplied by the closing share price on 28 February 2022, converted into Euro using a FX rate of 0.8355, being £2.11 (€2.53).
Company Secretary
28 February 2022
Total
1 March 2021
Total
Mark Chilton * 22,693 18,005
* Mark Chilton elected to participate in the UK SIP during the year, pursuant to which he was granted a number of matching shares, as permitted by the legislation.
Between 28 February 2022 and 12 May 2022, being the latest practicable date, Patrick McMahon acquired 242 shares under the Irish APSS.
There were no other changes in the above Directors’ or the Company Secretary’s interests between these dates.
For more details on the Profit Sharing Scheme, please see page 123.
The Directors and Company Secretary have no beneficial interests in any Group subsidiary or joint venture undertakings.
Share incentive plan interests awarded during year (Audited)
LTIP
The table below sets out the plan interests awarded to Executive Directors during the year ended 28 February 2022. Awards granted under
the LTIP are subject to performance conditions as set out on page 117 measured over a performance period ending at the end of February
2024.
Executive Director Type of award Maximum opportunity Number of shares
Face value
(at date of grant in Euros)
2
% of maximum opportunity
vesting at threshold
David Forde LTIP 150% of base salary 377, 9 5 3 1,035,000 25%
Patrick McMahon LTIP 150% of base salary 230,058 630,000 25%
Andrea Pozzi LTIP 150% of base salary 204,910 561,000 25%
1. The LTIP awards were granted on 15 June 2021 in the form of nil cost options over €0.01 ordinary shares in the Company.
2. The face value of LTIP awards is based on the number of shares under award multiplied by the closing share price on 14 June 2021 (being the day before the date of grant)
converted into Euro, being £2.352 (€2.738).
Corporate
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Financial
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129
Directors’ Interests in Options (Audited)
Interests in options over ordinary shares of €0.01 each in the Company
Directors
Date of
grant
Exercise
price Plan Exercise period
Total at
1 March 2021
(or date of
appointment if later)
Awarded
in year
Exercised
in year
Lapsed in
year
Total at
28 February
2022
David Forde 3/11/20 €0.00 Buy-out 1
1
3/11/22-3/11/30 421,318 28,309
2
- - 449,627
3/11/20 €0.00 Buy-out 2
1
3/11/23- 3/11/3 0 421,318 28,309
2
- - 449,627
2/12/20 €0.00 LTIP 2/12/23 – 2/12/30 363,357 24,415
2
- - 38 7,772
15/06/21 €0.00 LTIP 15/06/24 – 15/06/31 - 37 7, 9 5 3 - - 377,9 53
Total 1,205,993 458,986 - - 1,664,979
Patrick McMahon 11/02/19 €0.00 LTIP 11/02/22 – 28/02/29 124,794 - - (124,794) -
2/12/20 €0.00 LTIP 2/12/23 – 2/12/30 221,174 14,861
2
- - 236,035
15/06/21 €0.00 LTIP 15/06/24 – 15/06/31 - 230,058 - - 230,058
Total 345,968 244,919 - (124,794) 466,093
Mark Chilton 11/02/19 €0.00 LTIP 11/02/22 – 10/2/29 86,334 - - (86,334) -
16/06/21 €0.00 R&R 16/06/22 – 16/06/28 - 48,894 - - -
Total 86,334 48,894 - (86,334) 48,894
Key: LTIP – Long Term Incentive Plan approved in 2015;
1. During FY2021, David Forde was granted awards (“Buy-Out Awards”) to replace remuneration forfeited upon his departure from his former employer. The Buy-Out Awards were
granted in the form of nil cost options over €0.01 ordinary shares in the Company. The number of shares under award was determined by reference to the value of the forfeited
remuneration.
2. The awards granted on 3 November 2020 and 2 December 2020 were adjusted in the year to reflect the impact of the Rights Issue in line with standard practice. The adjustment
is shown as an additional number of shares “Awarded in year”.
No price was paid for any award of options. The price of the Company’s ordinary shares as quoted on the London Stock Exchange at
the close of business on 28 February 2022 was £2.11 (26 February 2021 (being the last working day): £2.58). The price of the Company’s
ordinary shares ranged between £2.03 and £2.98 during the year.
There was no movement in the interests of the Directors in options over the Company ordinary shares between 28 February 2022 and 17
May 2022.
Single Total Figure of Remuneration – Non-Executive Directors (Audited)
The table below reports the total fees receivable in respect of qualifying services by each Non-Executive Director during the year ended 28
February 2022 and the prior year. Stewart Gilliland was interim Executive Chair from 15 January 2020 until 2 November 2020, at which point
he reverted to his role as Non-Executive Chair; given his role, his remuneration for the whole year is included in the following Single Total
Figure of Remuneration Table.
Each Non-Executive Director agreed to waive their fees for the year in relation to their services on Stakeholder Engagement in FY2021 due
to the outbreak of COVID-19. Fees are the only element of the Non-Executive Directors’ remuneration in FY2021.
Salary/fees
Year ended February 2022 2021
€’000 €’000
Non-Executive Directors
Vineet Bhalla
1
54 -
Jill Caseberry 75 64
Jim Clerkin
2
46 61
Vincent Crowley
3
121 80
Emer Finnan
3
126 84
Stewart Gilliland
4
230 377
Helen Pitcher 93 82
Jim Thompson 90 71
Total 835 819
1. Vineet Bhalla was appointed to the Board on 26 April 2021.
2. Jim Clerkin left the Board on 27 October 2021.
3. An additional fee of €32,500 was paid to Vincent Crowley and Emer Finnan to reflect the significant additional time given to assisting the business on a number of projects
particularly in relation to the Rights Issue. This included but was not limited to the preparation for and attendance at 15 additional sub-committee meetings.
4. The fees paid to Stewart Gilliland for the year ending 28 February 2021 reflect his appointment as Interim Executive Chair from 16 January 2020 until 2 November 2020. The fee
paid to Stewart Gilliland for the year ending 28 February 2022 reflect his appointment as Non-Executive Chair.
Directors’ Remuneration Committee Report
(continued)
130 C&C Group plc Annual Report 2022
Fees paid to Non-Executive Directors are determined and approved by the Board as a whole. The Committee recommends the
remuneration of the Chair to the Board.
Fees are reviewed from time to time and adjusted to reflect market positioning and any change in responsibilities.
Non-Executive Directors receive a base fee and an additional fee for further duties as set out on in the following table:
Non-Executive Role / Position
Fees
€
Non-Executive Chair 230,000
Base fee 65,000
Senior Independent Director 15,000
Audit Committee Chair 25,000
Remuneration Committee Chair 20,000
ESG Committee Chair 20,000
Audit Committee member 5,000
ESG Committee member 5,000
Remuneration Committee member 5,000
Nomination Committee member 3,000
Stakeholder engagement - one segment of business 3,000
Stakeholder engagement - two segments of business 5,000
Shareholding guidelines
Non-Executive Directors are required to build up (and maintain) a minimum holding of shares in the Company of at least 50% of their base
fee, within three years of their appointment or within 3 years of the date approval of the 2021 Policy, if later.
Non-Executive Directors’ Interests in Share Capital of the Company (Audited)
The beneficial interests, including family interests, of the Non-Executive Directors in office at 28 February 2022 in the share capital of the
Company are detailed below:
28 February 2022
(or date of
retirement from
the board if
earlier)
Total
1 March 2021
(or date of
appointment
if later)
Total
Directors
Vineet Bhalla 10,000 -
Jill Caseberry 6,304 5,000
Vincent Crowley 25,216 20,000
Emer Finnan 10,028 7, 9 5 4
Stewart Gilliland 166,089 129,16 5
Helen Pitcher 8,015 -
Jim Thompson 157,78 0 157,78 0
Total 383,432 319,899
There were no changes in the above Non-Executive Directors’ share interests between 28 February 2022 and 17 May 2022.
Corporate
Governance
Business
& Strategy
Financial
Statements
131
Performance graph and table
This graph shows the value, at 28 February 2022, of £100 invested in the Company on 28 February 2012 compared to the value of £100
invested in the FTSE 250 Index. The Company became a member of the FTSE 250 Index on the London Stock Exchange on 23 December
2019 and the Committee believes that this is the most appropriate index against which to compare the performance of the Company (prior
to this the Company had its primary listing on the Irish Stock Exchange).
Chief Executive Officer
The following table sets out information on the remuneration of the Chief Executive Officer for the ten years to 28 February 2022:
Total Remuneration
€’000
Annual Bonus
(as % of maximum
opportunity)
Long term incentives
vesting
(as % of maximum
number of shares)
FY2013 Stephen Glancey 1,321 Nil 100%
FY2014 Stephen Glancey 1,152 18.75% 7%
FY2015 Stephen Glancey 980 Nil Nil
FY2016 Stephen Glancey 1,230 25% Nil
FY2017 Stephen Glancey 1,052 Nil Nil
FY2018 Stephen Glancey 994 18% Nil
FY2019 Stephen Glancey 1,777 100% Nil
FY2020 Stephen Glancey (to 15/01/20) 2,219 25% 100%
FY2020 Stewart Gilliland (from 16/01/20) 71 N/A N/A
FY2021 Stewart Gilliland (to 02/11/20) 301 N/A N/A
FY2021 David Forde (from 02/11/20) 1,731 Nil Nil
FY2022 David Forde 776 Nil Nil
The amounts set out in the above table were translated from Sterling based on the average exchange rate for the relevant year.
Directors’ Remuneration Committee Report
(continued)
300
250
200
150
100
50
C&C Group FTSE 250 Index
Total shareholder return
Feb 2020 Feb 2021 Feb 2022Feb 2019Feb 2018Feb 2017Feb 2016Feb 2015Feb 2014Feb 2013Feb 2012
132 C&C Group plc Annual Report 2022
FY2020 and FY2021: Stephen Glancey retired as Group Chief Executive Officer on 15 January 2020 and Stewart Gilliland was appointed
Interim Executive Chair from 16 January 2020 until 2 November 2020 when David Forde was appointed Chief Executive Officer. The salary,
taxable benefits, annual bonus, long term incentives and pension figures are calculated for the period in office.
Total remuneration for David Forde in FY2021 includes the Buy-Out awards granted to compensate him for remuneration forfeited to join
C&C as referred to in the FY2021 Report.
Ratio of the pay of the CEO to that of the UK lower quartile, median and upper quartile employees
The table below shows the ratio of the pay of the CEO to that of the UK lower quartile, median and upper quartile full-time equivalent
employees in FY2020, FY2021 and FY2022. For the wider workforce, the value of benefits provided in the year has not been included as the
data is not readily available. In the view of the Company, this does not have a meaningful impact on the pay ratios.
Figures for earlier years are presented on the same basis as in the Directors’ Remuneration Report for the prior year.
The UK regulations provide three methods for the calculation of the CEO Pay Ratio, A, B and C with Option A (modified) being the preferred
method as it is the most statistically accurate one. Remuneration for other employees for the purposes of the calculation is for the financial
year FY2022. In calculating the ratio, the Company determined full time equivalent annual remuneration for UK employees, employed in
the business as at 28 February 2022. Set out below is the remuneration and salary component of that remuneration for the CEO and for
employees in the 25th, 50th (median) and 75th quartiles.
Year
CEO total remuneration
(salary) €
25th percentile employee
remuneration
(salary) €
Median employee remuneration
(salary) €
75th percentile employee
remuneration
(salary) €
2020 2,218,941
6 97, 9 6 4
26,146
24,080
32,257
30,024
45,075
39,232
2021 2,031,946
531,161
23,465
22,146
29,667
27, 8 9 4
42,290
38,358
2022 776,250
690,000
26,759
25,281
34,125
31,511
45,338
41,613
Salary Only Ratios
Year Method 25th percentile ratio Median ratio 75th percentile ratio
2020 Option A 29.0:1 23.2:1 17. 8:1
2021 Option A 24.0:1 19.0:1 13.8:1
2022 Option A 27. 3:1 21.9:1 16.6:1
Total Remuneration Ratios
Year Method 25th percentile ratio Median ratio 75th percentile ratio
2020 Option A 84.9:1 68.8:1 49.2:1
2021 Option A 86.6:1 68.5:1 48.0:1
2022 Option A 29.0:1 22.7:1 17.1:1
The Company believes that the median pay ratio for FY2022 is consistent with the pay, reward and progression policies for the UK
employees. The change in the ratios between FY2021 and FY2022 are attributable to a number of factors including the FY2021 CEO
remuneration being the aggregate of the Executive Chair’s and CEO’s remuneration and a significant proportion of employees being placed
on furlough during FY2021, as a result of the COVID-19 pandemic.
Corporate
Governance
Business
& Strategy
Financial
Statements
133
Annual Percentage Change in Remuneration of Directors and Employees
The table below reports the annual percentage change in salary/fees and bonus of the Directors and employees between FY2020 and
FY2022 in accordance with the UK Regulations. The UK Regulations also require that this disclosure be included in relation to benefits
however due to the difficulty in obtaining this data, we have decided not to include benefits for the purpose of the calculation, consistent with
our approach to the CEO Pay Ratio. The “average employee” disclosure shows the average percentage change in the same remuneration
over the same period in respect of the Company’s UK full time equivalent employees, by reported numbers. We have used the Company’s
UK full time equivalent employees as the comparator group for consistency with the approach to the CEO Pay Ratio calculation.
The average employee change has been calculated by reference to the mean of employee pay. Vineet Bhalla was appointed to the Board
during FY2022 and, accordingly, has been excluded from the table below. Andrea Pozzi and Jim Clerkin left the Board during FY2022 and,
accordingly, have been excluded from the table below.
Average
Employee
David
Forde
4
Patrick
McMahon
4
Stewart
Gilliland
3
Jill
Caseberry
Vincent
Crowley
5
Emer
Finnan
5
Helen
Pitcher
Jim
Thompson
Salary/
Fees
FY2020 –
FY2021
1,2
(4.2%) N/A N/A 35.6% ( 7. 2%) ( 7.0%) (8.7%) (3.5%) 2.9%
FY2021 –
FY2022
1.6% 0.0% 0.0% (38.9%) 17. 2 % 50.6% 49.4% 13.4% 26.8%
Annual
Bonus
FY2020 –
FY2021
N/A N/A N/A N/A N/A N/A N/A N/A N/A
FY2021 –
FY2022
0.6% N/A N/A N/A N/A N/A N/A N/A N/A
1. Due to the impact of COVID-19, a significant proportion of employees were placed on furlough during FY2021, resulting in a reduction in the salaries they earned.
2. Each Director took a voluntary reduction in salary in FY2021 due to the impact of COVID-19 which had an impact on the fees given for additional services. Jim Thompson’s fee
increased during FY2021 due to his appointment as Chair of the ESG Committee in September 2020.
3. The increase in Stewart Gilliland’s salary/fee between FY2020 and FY2021 was not attributable to an increase in the remuneration paid for a role, but rather a change in role.
Stewart was interim Executive Chair until 2 November 2020 when David Forde was appointed Chief Executive Officer, at which point Stewart reverted back to his position as
Non-Executive Chair. Similarly, the decrease in Stewart Gilliland’s salary/fee between FY2021 and FY2022 was not attributable to a decrease in the remuneration paid for a role,
but rather the change in role as outlined above.
4. Each of David Forde and Patrick McMahon was appointed to the board during FY2021. For the purposes of the table above, their salary earned as a Director during that year has
been annualised to determine the percentage change between FY2021 and FY2022. No bonus was earned by either Director in respect of FY2021 or FY2022.
5. An additional fee of €32,500 was paid to Vincent Crowley and Emer Finnan in FY2022 to reflect the significant additional time given to assisting the business on a number of
projects particularly in relation to the Rights Issue.
Implementation of the Remuneration Policy in FY2023
Based on the continuation of the existing approach, the Committee intends to take the following approach to the implementation of the
Policy for FY2023:
Salary
In line with the wider workforce, the Committee has agreed that executive salaries will increase by 3.5%.
Annual Bonus
The maximum opportunity will continue to be 100% of base salary. The operation of the annual bonus will continue broadly unchanged,
reverting back to being based on full year targets, with 75% of the metrics for any bonus will be based on financial measures and the
remainder on non-financial or strategic goals, including ESG measures.
Long-Term Incentives
The current intention is that awards of LTIPs will be made in late May / early June 2022. The Committee has yet to determine the
performance measures, which may include EPS, free cash flow and return on capital employed along with an ESG based measure (with
financial measures accounting for at least 75% of the awards). The Committee has determined that before the measures are set, it should
review the first quarter’s trading and the latest assessment of any continuing measures to control the pandemic. The measures will be
confirmed in the regulatory announcement when the awards are made.
Directors’ Remuneration Committee Report
(continued)
134 C&C Group plc Annual Report 2022
Non-Executive Directors
Following a review, the Board has agreed that non-executive base fees will increase by 3.1% in FY2023.
Chair Fee
On 16 September 2021, we announced the appointment of Ralph Findlay as a director and Chair designate. Ralph Findlay joined the Board
on 1 March 2022 as a Non-Executive Director and will succeed Stewart Gilliland as Chair following the 2022 AGM. As a Non-Executive
Director, Ralph Findlay receives a fee of €65,000, which takes account of the 3.1% increase as explained above, and on his appointment as
Chair will receive a fee of €250,000, which is slightly higher than that paid to Stewart Gilliland, but takes into account that the chair fee had
not increased for ten years.
Shareholder Voting at 2021 Annual General Meeting
The following table sets out the votes at our most recent AGM in respect of the Report and the Policy.
Directors’ Remuneration Report
AGM For Against Withheld
2021 279,246,638 8, 817, 526 4,316
Directors’ Remuneration Policy
AGM For Against Withheld
2021 273,330,524 14,729,936 4,153
The Company is committed to ongoing shareholder dialogue and takes shareholder views into consideration when formulating remuneration
policy and practice. To the extent that there are substantial numbers of votes against resolutions in relation to directors’ remuneration, the
Company will seek to understand the reasons for any such vote and will provide details of any actions in response to such a vote.
The Company is incorporated in Ireland and is therefore not subject to the UK company law requirement to submit its Directors’
Remuneration Policy (‘Policy’) to a binding vote. Nonetheless, in line with our commitment to best practice, at the AGM in July 2021, our
Policy was approved by our shareholders on an advisory basis along with the 2021 Annual Remuneration Report.
This report was approved by the Board and signed on its behalf by
Helen Pitcher OBE
Chair of the Remuneration Committee
17 May 2022
Corporate
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Financial
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135
Statement of Directors’ Responsibilities
The Directors are responsible for
preparing the Annual Report and the
Group and Company financial statements,
in accordance with applicable law and
regulations.
Company law requires the Directors to
prepare Group and Company financial
statements for each financial year. Under
that law, the Directors are required to
prepare the Group financial statements
in accordance with International Financial
Reporting Standards (‘IFRSs’) as adopted
by the EU, and have elected to prepare
the Company financial statements in
accordance with Irish Law (Irish Generally
Accepted Accounting Practice), including
FRS 101 ‘Reduced Disclosure Framework’
(‘FRS 101’).
Under Irish Company law, the Directors
must not approve the financial statements
unless they are satisfied that they give a true
and fair view of the assets, liabilities and
financial position of the Group and parent
company as at the end of the financial year,
and the profit or loss for the Group for the
financial year, and otherwise comply with
Companies Act 2014.
In preparing each of the Group and
Company financial statements the Directors
are required to:
• select suitable accounting policies and
apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
• state that the Group financial statements
comply with IFRS as adopted by the EU
and as regards the Company, comply with
FRS 101 together with the requirements of
Irish Company Law; and
• prepare the financial statements on
the going concern basis, unless it is
inappropriate to presume that the Group
and Company will continue in business.
The Directors are also required by the
Transparency (Directive 2004/109/EC0)
Regulations 2007 and the Transparency
rules of the Central Bank of Ireland to
include a management report containing a
fair review of the business and the position
of the Group and the parent Company
and a description of the principal risks and
uncertainties facing the Group.
The Directors are responsible for adequate
accounting records which disclose with
reasonable accuracy at any time the assets,
liabilities, financial position and profit or loss
of the Company, and which will enable them
to ensure that the financial statements of
the Group are prepared in accordance with
applicable IFRS as adopted by the European
Union and comply with the provisions of
Irish Company Law, and, as regards to the
Group financial statements, Article 4 of
the European Communities (International
Financial Reporting Standards and
Miscellaneous Amendments) Regulations
2005 (the ‘IAS Regulation’). They are also
responsible for safeguarding the assets
of the Company and the Group, and
hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
The Directors have appointed appropriate
accounting personnel, including a
professionally qualified Finance Director, in
order to ensure that those requirements are
met.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website (www.candcgroupplc.
com). Legislation in Ireland concerning the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
Responsibility Statement As
Required By The Transparency
Directive And UK Corporate
Governance Code
Each of the Directors, whose names and
functions are listed on pages 88 and 89 of
this Annual Report, confirm that, to the best
of each person’s knowledge and belief:
• So far as they are aware, there is no
relevant audit information of which the
Company’s statutory auditor is unaware;
• They have taken all steps that they ought
to have taken as Directors in order to
make themselves aware of any relevant
audit information and to establish that the
Company’s statutory auditor is aware of
that information.
• The Group Financial Statements,
prepared in accordance with IFRS as
adopted by the European Union and the
Company financial statements prepared in
accordance with FRS 101 give a true and
fair view of the assets, liabilities, financial
position of the Group and Company at 28
February 2022 and of the profit or loss of
the Group for the year then ended;
• The Directors’ Report contained in the
Annual Report includes a fair review of
the development and performance of the
business and the position of the Group
and Company, together with a description
of the principal risks and uncertainties that
they face; and
• The Annual Report and Financial
Statements, taken as a whole, provides
the information necessary to assess
the Group’s performance, business
model and strategy and is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Company’s position and
performance, business model and
strategy.
Signed
On behalf of the Board
David Forde Patrick McMahon
Group Chief
Executive Officer
Group Chief
Financial Officer
17 May 2022
136 C&C Group plc Annual Report 2022
Report on the audit of the financial statements
Opinion
We have audited the financial statements of C&C Group plc (‘the
Company’) and its subsidiaries (‘the Group’) for the year ended 28
February 2022, which comprise:
• the Consolidated Income Statement and the Consolidated
Statement of Comprehensive Income for the year then ended;
• the Consolidated Balance Sheet and the Company Balance Sheet
as at 28 February 2022;
• the Consolidated Cash Flow Statement for the year then ended;
• the Consolidated Statement of Changes in Equity and the
Company Statement of Changes in Equity for the year then
ended; and
• the notes forming part of the financial statements, including the
Statement of Accounting Policies set out on pages 154 to 170.
The financial reporting frameworkthat has been applied
in their preparation is Irish Law and International Financial
ReportingStandards (IFRS) as adopted by the European
Unionand,as regards the Company financial statements,
Accounting Standards including FRS 101 Reduced Disclosure
Framework issued in the United Kingdom by the Financial Reporting
Council.
In our opinion:
• the Group financial statements give a true and fair view of the
assets, liabilities and financial position of the Group as at 28
February 2022 and of the Group’s profit for the year then ended;
• the Company financial statements give a true and fair view of the
assets, liabilities and financial position of the Company as at 28
February 2022;
• the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union;
• the Company financial statements have been properly prepared
in accordance with FRS 101 Reduced Disclosure Framework; and
as applied in accordance with the provisions of the Companies
Act 2014;
• the Group financial statements and Company financial statements
have been properly prepared in accordance with the requirements
of the Companies Act 2014 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Group and
Company in accordance with ethical requirements that are relevant
to our audit of financial statements in Ireland, including the Ethical
Standard issued by the Irish Auditing and Accounting Supervisory
Authority (IAASA) as applied to listed entities, and we have
Independent Auditor’s Report
to the Members of C&C Group Plc
fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation
of the directors’ assessment of the Group and Company’s ability to
continue to adopt the going concern basis of accounting included:
Risk assessment procedures
• Obtained an understanding of management’s process for the use
of the going concern basis of accounting;
• Considering whether events or conditions existed that may cast
doubt on the entity’s ability to continue as a going concern for a
period not less than 12 months from the approval of the financial
statements.
Management’s process for assessing going concern
• In conjunction with our walkthrough of the Group’s financial
statement close process, we engaged with management early to
ensure key factors were considered in their assessment including
controls;
• Obtained management’s board-approved forecasted cash flows
and covenant calculations for the going concern period which
covers a period of at least 12 months from the date the financial
statements are authorised for issue along with the Group’s
assessment models for specific stressed scenarios;
• Using our understanding of the business and through inspection
and testing, evaluated and determined, whether the forecasting
model and methods adopted by management in assessing going
concern were appropriately sophisticated to be able to make an
assessment for the Group; and
• Considered the consistency of information obtained from other
areas of the audit such as the forecasts used for impairment
assessments.
Assumptions
• Considered past historical accuracy of management’s forecasting;
• Tested the assumptions included in the model and stressed
scenarios, noting that the model was prepared on a top-
down basis, driven by volumes sold within each business unit
and channel with different assumptions around reduction in
revenue and cost inflation, we reviewed and challenged the key
assumptions, corroborating to underlying available data;
• Tested the forecast models for each scenario to ensure that they
were mathematically accurate; and
• Considered industry reports and market data for indicators of
contradictory evidence, including a review of profit warnings within
the sector.
Corporate
Governance
Business
& Strategy
Financial
Statements
137
Debt facilities / liquidity
• Performed a detailed review of all borrowing facilities to assess
their continued availability to the Group through the going concern
assessment period and to ensure completeness of covenants
identified by management; and
• Verified the covenant waivers in place covering the August 2022
and February 2023 measurement dates. As a result of the Equity
Raise, the Group’s banking covenants were renegotiated to
increase the threshold of the Group’s Net Debt/Adjusted EBITDA
covenant to not exceed 4.5x and to reduce the Interest cover
covenant to be not less than 2.5x for the August 2022 assessment
date after which the Group returns to its original debt covenants of
Net Debt/Adjusted EBITDA covenant to not exceed 3.5x and the
Interest cover covenant to be not less than 3.5x.
Stress testing and Management’s plans for future actions
• Performed sensitivity analysis assuming inflationary increases
to operating costs in line with analyst forecasts and general
economic sentiment, a change in revenue mix and reduction in
revenue given the potential for changes in consumer behaviour
as a result of the COVID-19 pandemic, which indicated that there
was still liquidity headroom under these scenarios;
• Assessed the plausibility of management’s stressed scenarios
by evaluating the Group’s actual performance in early FY23 and
considering industry outlook analysis; and
• Evaluated management’s ability to undertake mitigating actions
to reduce cash outflows during the going concern assessment
period to determine whether such actions are feasible.
Disclosures
Reviewed the Group’s going concern disclosures in the financial
statements to ensure they are in accordance with International
Financial Reporting Standards.
Our key observations
We have observed that the Group has quickly recovered from the
pandemic, returning to profitability in the latter part of the current
year and generating operating cash flows of €33.0 million in the
year ended 28 February 2022. The Group is not expected to be
significantly impacted by Covid-19 in the going concern assessment
period. Further, the Group has access to significant liquidity. The
majority of the Group’s long-term funding commitments mature after
July 2024. At 28 February 2022, the Group has unrestricted cash
and cash equivalents of €64.7 million and unused committed debt
facilities of up to €374 million from a revolving bank credit facility
expiring in July 2024.
Conclusion
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group
and parent company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements
are authorised for issue.
In relation to the Group and Company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’
statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report. However, because not all future events or conditions can
be predicted, this statement is not a guarantee as to the Group’s or
the Company’s ability to continue as a going concern.
Overview of our audit approach
Audit
scope
• We performed an audit of the complete financial
information of 12 components and performed audit
procedures on specific balances for a further 3
components
• We performed specified procedures at a further 7
components that were determined by the Group audit
team in response to specific risk factors
• The components where we performed either full or
specific audit procedures accounted for 94.3% of the
Group’s Profit before Tax from continuing operations,
99.6% of the Group’s Net Revenue and 95.8% of the
Group’s Total Assets
• Components represent business units across the
Group considered for audit scoping purposes
Key audit
matters
• Going concern – presented in the ‘Conclusions
relating to going concern’ section above
• Recoverability of on-trade receivable balances and
advances to customers
• Impairment assessment of goodwill and intangible
brand assets
• Assessment of the valuation of property, plant and
equipment (PP&E)
• Revenue recognition
Materiality • Overall Group materiality was assessed to be €3.85
million which represents approximately 5% of the
Group’s Normalised Earnings based on the average
profit before tax and pre-exceptional items for the
years ended 28 February 2019 to 28 February 2022
excluding 28 February 2021. We refer to this materiality
basis as ‘Normalised Earnings’ throughout. In our prior
year audit, we adopted a materiality of €3.7 million
based on 0.5% of the Group’s Net Revenue.
What has
changed?
• In the current year, our auditor’s report includes an
amendment to the key audit matter Assessment of
the valuation of property, plant and equipment (PP&E),
where this key audit matter has been narrowed to
exclude impairment assessment of equity accounted
investments as the significant equity accounted
investment is ‘Held For Sale’ at the year end.
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
138 C&C Group plc Annual Report 2022
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Key observations communicated to the
Audit Committee
Recoverability of on-trade receivable
balances and advances to customers (Trade
receivables 2022: €147.5m, 2021: €75.9m,
advances to customers 2022: €43.0m, 2021:
€42.1m)
The Group has a risk through exposure to
on-trade receivable balances and advances
to customers who may experience financial
difficulty given the ongoing COVID-19 pandemic
and the withdrawal of government wage
subsidies during the year.
Refer to the Audit Committee Report (page
102); and Statement of Accounting Policies
(pages 167 and 170); and Note 15 of the
Consolidated Financial Statements (pages 203
to 204).
We have evaluated the process and key controls,
designed and implemented by management,
related to assessing recoverability of on-trade
receivable balances and advances to customers.
We have reviewed the model used by
management in calculating the expected credit
losses to ensure that it is compliant with IFRS 9
and adequately captures the additional risks in
the current environment. We are satisfied that a
consistent methodology tailored for local nuances
has been applied in calculating expected credit
losses.
We have considered management’s assumptions
around the impact of the current environment
on the debtor portfolios. Additionally, we have
benchmarked the expected credit losses using
information such as credit default swaps for
comparable groups operating in the same sector
and found these to be reasonable.
Given the inherent level of uncertainty and
the sensitivity of judgements and estimates,
we reviewed all related disclosures of the key
assumptions used and judgements made in
estimating the Expected Credit Loss (ECL).
We completed our planned
audit procedures with no
exceptions noted.
Our observations included our
assessment of management’s
methodology for calculating
expected credit losses in
accordance with IFRS 9. We
focused on the significant
judgements made by
management, benchmarked
key assumptions and the
appropriate disclosure of these
in the financial statements.
Corporate
Governance
Business
& Strategy
Financial
Statements
139
Risk Our response to the risk
Key observations communicated to the
Audit Committee
Impairment assessment of goodwill &
intangible brand assets (2022: €656.5m,
2021: €646.0m)
The Group holds significant amounts of goodwill
& intangible brand assets on the balance
sheet. In line with the requirements of IAS 36:
‘Impairment of Assets’ (‘IAS 36’), management
tests goodwill balances annually for impairment,
and also tests intangible assets where there are
indicators of impairment.
The annual impairment testing was significant
to our audit because of the financial quantum
of the assets it supports as well as the fact
that the testing relies on a number of critical
judgements, estimates and assumptions by
management. Judgemental aspects include
cash-generating unit (‘CGU’) determination
for goodwill purposes, assumptions of future
profitability, revenue growth, margins and
forecast cash flows, and the selection of
appropriate discount rates, all of which may be
subject to management override.
Refer to the Audit Committee Report (page
102); Statement of Accounting Policies (pages
161 to 162 and 169 to 170); and Note 12 of the
Consolidated Financial Statements (pages 194
to 199).
We have evaluated the process and key controls,
designed and implemented by management,
related to the impairment assessment of goodwill
& intangible brand assets.
Valuations specialists within our team performed
an independent assessment against external
market data of key inputs used by management
in calculating appropriate discount rates,
principally risk-free rates, country risk premia and
inflation rates.
We carefully considered the determination
of the Group’s 6 CGUs, and flexed our audit
approach relative to our risk assessment
and the level of excess of value-in-use over
carrying amount in each CGU for goodwill
purposes and in each model for the impairment
assessment for intangible brand assets. For all
models, we assessed the historical accuracy
of management’s estimates, corroborated
key assumptions and benchmarked growth
assumptions to external economic forecasts.
We evaluated management’s sensitivity analyses
and performed our own sensitivity calculations to
assess the level of excess of value-in-use over the
goodwill and intangible brand carrying amount
and whether a reasonably possible change in
assumptions could cause the carrying amount to
exceed its recoverable amount.
We considered the adequacy of management’s
disclosures in respect of impairment testing
and whether the disclosures appropriately
communicate the underlying sensitivities, in
particular the requirement to disclose further
sensitivities for CGUs and intangible brands
where a reasonably possible change in a key
assumption would cause an impairment.
The above procedures were performed by the
Group audit team.
We completed our planned
audit procedures with no
exceptions noted.
Our observations included our
assessment of management’s
impairment model methodology
and then for each CGU and
intangible brand model:
• whether the discount rates
lay within an acceptable
range;
• the level of headroom of the
present value of cash flows
over the CGU and asset
carrying amounts;
• analysis of the 5-year forecast
EBIT growth rate when
viewed against the prior
year and current year actual
growth;
• the results of our sensitivity
analyses on the outcome
of the value-in-use
models which indicated
management’s conclusions
were appropriate; and
• all disclosures are appropriate
to the requirements of IAS 36.
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
140 C&C Group plc Annual Report 2022
Risk Our response to the risk
Key observations communicated to the
Audit Committee
Assessment of the valuation of property,
plant and equipment (PP&E) (2022: €146.0m,
2021: €139.3m)
The Group carries its land and buildings at
estimated fair value, its plant and machinery
using a depreciated replacement cost approach
and motor vehicles and other equipment at cost
less accumulated depreciation and impairment
losses.
During the year, all land and buildings and plant
and machinery were subject to independent
expert valuations.
We considered the valuation of these assets to
be a risk area due to the size of the balances
and the lack of comparable market data and
observable inputs such as market based
assumptions, plant replacement costs and plant
utilisation levels due to the specialised nature
of the Group’s assets. The valuation of PP&E
involves significant judgement and therefore is
susceptible to management override.
Refer to the Audit Committee Report (page
102); Statement of Accounting Policies (pages
158 to 159 and 169); and note 11 of the
Consolidated Financial Statements (pages 189
to 193).
We have evaluated the process and key controls,
designed and implemented by management,
related to assessing the valuation of property,
plant and equipment.
For PP&E, we inspected the independent expert
valuation reports to assess the integrity of the
data and key assumptions underpinning the
valuations.
Our specialist valuation team performed an
independent assessment on the reasonableness
of the key assumptions and judgements
underlying the valuations.
We corroborated the key assumptions and
considered consistency to market data and
observable inputs.
We ensured the related valuation adjustments
were correctly reflected and we re-calculated
depreciation considering the useful lives of the
assets.
We considered the adequacy of management’s
disclosures in respect of the valuation
and whether the disclosures appropriately
communicate the underlying sensitivities.
All of the above procedures were performed
predominantly by the Group audit team.
We completed our planned
audit procedures with no
exceptions noted.
Our observations included:
• an overview of the risk;
• an outline of the procedures
performed;
• the judgements we
focused on including the
appropriateness of the
depreciated replacement
cost methodology; and
• the results of our testing on
the outcome of the valuations
and in respect of the related
disclosures.
Corporate
Governance
Business
& Strategy
Financial
Statements
141
Risk Our response to the risk
Key observations communicated to the
Audit Committee
Revenue recognition (2022: €1,438.1m, 2021:
€736.9m)
The Group generates revenue from a variety
of geographies and across a large number
of separate legal entities spread across the
Group’s two business segments.
The Group’s revenue particularly on supply,
complex and non-standard customer contract
agreements may not have been accounted for
correctly. In this regard we focused our risk on
revenue generated in connection with certain
of the Group’s arrangements with third parties
entered into in order to utilise excess capacity
and other material complex arrangements with
customers.
Revenue is an important element of how the
Group measures its performance, and revenue
recognition is therefore inherently susceptible to
the risk of management override.
Refer to the Audit Committee Report (page
102); Statement of Accounting Policies (page
164 ); and note 1 of the Consolidated Financial
Statements (pages 171 to 174).
We considered the appropriateness of the
Group’s revenue recognition accounting policies;
in particular, those related to supply, complex and
non-standard customer contracts.
For the purpose of our audit, the procedures we
carried out included the following:
• We have evaluated the systems and key
controls, designed and implemented by
management, related to revenue recognition.
• We considered the appropriateness of the
Group’s revenue recognition policy.
• We discussed with management the key
assumptions, estimates and judgements
related to recognition, measurement,
classification of revenue and related disclosures
in accordance with IFRS 15: Revenue.
• In addition, we have discussed significant and
complex customer contracts, discounts and
the treatment of marketing contributions to
ensure that accounting policies are applied
correctly.
• We performed journal entry testing and
verification of proper cut-off at year-end.
We completed our planned
audit procedures with no
exceptions noted.
Our observations included:
• an overview of the risk;
• an outline of the procedures
performed; and
• the judgements we focused
on and the results of our
testing.
Our application of materiality
We apply the concept of materiality in planning and performing the
audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent of
our audit procedures.
We determined materiality for the Group and Company to be €3.85
million, which is approximately 5% of the Group’s Normalised
Earnings based on the average Profit before Tax and pre-exceptional
items for the years ending 28 February 2019 to 28 February 2022
excluding 28 February 2021, (2021: €3.7 million based on 0.5% of
the Group’s Net Revenue). We believe that Normalised Earnings
provides us with the most appropriate performance metric on which
to base our materiality calculation as we consider it to be the most
relevant performance measure to the Group’s equity and debt
stakeholders in the context of the Group which has not yet returned
to a normalised level of profits.
During the course of our audit, we reassessed initial materiality and
considered that no further changes to materiality were necessary.
Performance materiality
The application of materiality at the individual account or balance
level. It is set at an amount to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment
of the Group’s overall control environment, our judgement was
that performance materiality was 50% (2021: 50%) of our planning
materiality, namely €1.93 million (2021: €1.85 million). We have
set performance materiality at this percentage based on our
assessment of the risk of misstatements, both corrected and
uncorrected, consistent with the prior year.
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
142 C&C Group plc Annual Report 2022
Reporting threshold
An amount below which identified misstatements are considered as
being clearly trivial.
We agreed with the Audit Committee that we would report to them
all uncorrected audit differences in excess of €0.193 million (2021:
€0.18 million), which is set at 5% of planning materiality, as well
as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
An overview of the scope of our audit report
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our
allocation of performance materiality determine our audit scope for
each entity within the Group. Taken together, this enables us to form
an opinion on the Consolidated Financial Statements.
In determining those components in the Group to which we perform
audit procedures, we utilised size and risk criteria when assessing
the level of work to be performed at each entity.
In assessing the risk of material misstatement to the Group financial
statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, we selected 15
(2021: 18) components covering entities across Ireland, UK and the
US, which represent the principal business units within the Group.
Of the 15 (2021: 18) components selected, we performed an audit
of the complete financial information of 12 (2021: 10) components
(“full scope components”) which were selected based on their size
or risk characteristics. For the remaining 3 (2021: 8) components
(“specific scope components”), we performed audit procedures on
specific accounts within that component that we considered had the
potential for the greatest impact on the significant accounts in the
financial statements either because of the size of these accounts or
their risk profile.
In addition to the 15 (2021: 18) components discussed above, we
selected a further 7 (2021: 6) components where we performed
procedures at the component level that were specified by the Group
audit team in response to specific risk factors.
The reporting components where we performed audit procedures
accounted for 99.6% (2021: 98.9%) of the Group’s Profit/loss before
Tax, 99.6% (2021: 99.6%) of the Group’s Net Revenue and 95.9%
(2021: 99.5%) of the Group’s Total Assets.
For the current year, the full scope components contributed 91.8%
(2021: 85.0%) of the Group’s Profit /loss before Tax, 99.6% (2021:
97.0%) of the Group’s Net Revenue and 95.8% (2021: 97.3%) of the
Group’s Total Assets. The specific scope component contributed
2.5% (2021: 13.7%) of the Group’s Profit/loss before Tax, 0.0%
(2021: 0.0%) of the Group’s Net Revenue and 0.0% (2021: 0.5%) of
the Group’s Total Assets. The components where we performed
specified procedures that were determined by the Group audit team
in response to specific risk factors contributed 5.3% (2021: 0.2%) of
the Group’s Profit/loss before Tax, 0.0% (2021: 2.6%) of the Group’s
Net Revenue and 0.1% (2021: 1.7%) of the Group’s Total Assets. The
audit scope of these components may not have included testing of
all significant accounts of the component but will have contributed
to the coverage of significant accounts tested for the Group.
Of the remaining components that together represent 0.4% (2021:
1.1%) of the Group’s Profit/loss before Tax, none are individually
greater than 5% (2021: 5%) of the Group’s Profit/loss before Tax.
For these components, we performed other procedures, including
analytical review, testing of consolidation journals and intercompany
eliminations and foreign currency translation recalculations to
respond to any potential risks of material misstatement to the Group
financial statements.
The charts below illustrate the coverage obtained from the work
performed by our audit teams.
Profit before tax
91.8% Full scope
components
2.5% Specific scope
components
5.3% Specified
procedures
0.4% Other
procedures
99.6% Full scope
components
0.0% Specific scope
components
0.0% Specified
procedures
0.4% Other
procedures
95.8% Full scope
components
0.0% Specific scope
components
0.1% Specified
procedures
4.1% Other
procedures
Net Revenue
Total Assets
Corporate
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Financial
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143
Profit before tax
91.8% Full scope
components
2.5% Specific scope
components
5.3% Specified
procedures
0.4% Other
procedures
99.6% Full scope
components
0.0% Specific scope
components
0.0% Specified
procedures
0.4% Other
procedures
95.8% Full scope
components
0.0% Specific scope
components
0.1% Specified
procedures
4.1% Other
procedures
Net Revenue
Total Assets
Involvement with component teams
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be undertaken at each
of the components by us, as the primary audit engagement team,
or by component auditors from other EY global network firms
operating under our instruction. Where the work was performed
by component auditors, we determined the appropriate level of
involvement to enable us to determine that sufficient audit evidence
had been obtained as a basis for our opinion on the Group as a
whole.
We issued detailed instructions to each component auditor in scope
for the Group audit, with specific audit requirements and requests
across key areas. During the current year’s audit cycle, the Group
audit team performed remote file reviews at Belfast, Glasgow and
MCB. These visits involved discussing the audit approach and any
issues arising with the component teams and holding discussions
with local management and attending closing meetings.
The Group audit team interacted regularly with the component
teams, where appropriate, during various stages of the audit,
reviewed and evaluated the work performed by these teams,
including review of key reporting documents, in accordance with
the ISAs (Ireland) and were responsible for the overall planning,
scoping and direction of the Group audit process. Senior members
of the Group audit team also participated in component and
divisional planning, interim and closing meeting calls during which
the planning and results of the audits were discussed with the
component auditors, local management and Group management.
This, together with the additional procedures performed at Group
level, gave us appropriate evidence for our opinion on the Group
financial statements.
Other conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following information in
the annual report, in relation to which the ISAs (Ireland) require us
to report to you whether we have anything material to add or draw
attention to:
• the disclosures in the annual report (set out on pages 34 to 43)
that describe the principal risks and explain how they are being
managed or mitigated;
• the directors’ confirmation (set out on page 35) in the annual
report that they have carried out a robust assessment of the
principal risks facing the Group and the Company, including those
that would threaten its business model, future performance,
solvency or liquidity.
• the directors’ statement (set out on pages 43 to 44) in the financial
statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting in preparing the
financial statements and the directors’ identification of any material
uncertainties to the Group’s and the Company’s ability to continue
to do so over a period of at least twelve months from the date of
approval of the financial statements;
• whether the directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
6.8.3(3) is materially inconsistent with our knowledge obtained in
the audit; or
• the directors’ explanation (set out on pages 44 to 45) in the annual
report as to how they have assessed the prospects of the Group
and the parent company, over what period they have done so
and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that
the Group and the parent company will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Other information
The Directors are responsible for the other information. The other
information comprises the information included in the Annual Report
other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If we identify such
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
144 C&C Group plc Annual Report 2022
material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement
in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the other
information and to report any uncorrected material misstatements of
the other information where we conclude that those items meet the
following conditions:
• Fair, balanced and understandable (set out on page 96) – the
statement given by the Directors that they consider the Annual
Report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary
for shareholders to assess the Group’s and the Company’s
performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
• Audit Committee reporting (set out on pages 100 to 105) – the
section describing the work of the Audit Committee does not
appropriately address matters communicated by us to the Audit
Committee or is materially inconsistent with our knowledge
obtained in the audit; or
• Directors’ statement of compliance with the UK Corporate
Governance Code (set out on page 91) – the parts of the
Directors’ statement required under the Listing Rules relating to
the Company’s compliance with the UK Corporate Governance
Code containing provisions specified for review by the auditor
in accordance with Listing Rule 6.8.6 do not properly disclose
a departure from a relevant provision of the UK Corporate
Governance Code.
Opinions on other matters prescribed by the Companies
Act 2014
In our opinion, based solely on the work undertaken in the course of
the audit, we report that:
• the information given in the Directors’ Report, other than those
parts dealing with the non-financial statement pursuant to the
requirements of S.I. No. 360/2017 on which we are not required
to report in the current year, is consistent with the financial
statements; and
• the Directors’ Report, other than those parts dealing with the
non-financial statement pursuant to the requirements of S.I. No.
360/2017 on which we are not required to report in the current
year, has been prepared in accordance with the Companies Act
2014.
We have obtained all the information and explanations which, to the
best of our knowledge and belief, are necessary for the purposes of
our audit.
In our opinion the accounting records of the Company were sufficient
to permit the financial statements to be readily and properly audited
and the Company Balance Sheet is in agreement with the accounting
records.
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the directors’ report.
The Companies Act 2014 requires us to report to you if, in our opinion,
the disclosures of directors’ remuneration and transactions required
by sections 305 to 312 of the Act, which relate to disclosures of
directors’ remuneration and transactions, are not complied with by the
Company. We have nothing to report in this regard.
We have nothing to report in respect of section 13 of the European
Union (Disclosure of Non-Financial and Diversity Information by
certain large undertakings and groups) Regulations 2017, which
require us to report to you if, in our opinion, the Company has not
provided in the non-financial statement the information required by
Section 5(2) to (7) of those Regulations, in respect of 28 February
2021.
Respective responsibilities
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement set
out on page 136, the directors are responsible for the preparation
of the financial statements in accordance with the applicable
financial reporting framework that give a true and fair view, and
for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group and the parent Company’s ability to continue as
going concerns, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Group or the parent
Company or to cease operations, or has no realistic alternative but to
do so.
Corporate
Governance
Business
& Strategy
Financial
Statements
145
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (Ireland) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
The objectives of our audit, in respect to fraud, are; to identify and
assess the risks of material misstatement of the financial statements
due to fraud; to obtain sufficient appropriate audit evidence
regarding the assessed risks of material misstatement due to fraud,
through designing and implementing appropriate responses; and to
respond appropriately to fraud or suspected fraud identified during
the audit. However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with governance of
the entity and management.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group across the various
jurisdictions globally in which the Group operates. We determined
that the most significant are those that relate to the form and
content of external financial and corporate governance reporting
including company law, tax legislation, employment law and
regulatory compliance.
• We understood how C&C Group plc is complying with those
frameworks by making enquiries of management, internal audit,
those responsible for legal and compliance procedures and the
Company Secretary. We corroborated our enquiries through our
review of the Group’s Compliance Policies, board minutes, papers
provided to the Audit Committee and correspondence received
from regulatory bodies.
• We assessed the susceptibility of the Group’s financial statements
to material misstatement, including how fraud might occur, by
meeting with management, including within various parts of
the business, to understand where they considered there was
susceptibility to fraud. We also considered performance targets
and the potential for management to influence earnings or the
perceptions of analysts. Where this risk was considered to be
higher, we performed audit procedures to address each identified
fraud risk. These procedures included testing manual journals and
were designed to provide reasonable assurance that the financial
statements were free from fraud or error.
• Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations.
Our procedures included a review of board minutes to identify
any non-compliance with laws and regulations, a review of the
reporting to the Audit Committee on compliance with regulations,
enquiries of internal and external legal counsel and management.
A further description of our responsibilities for the audit of the
financial statements is located on the IAASA’s website at: http://
www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/
Description_of_auditors_responsibilities_for_audit.pdf.
This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Audit Committee following an AGM held
on 6 July 2017 to audit the financial statements for the year ending
28 February 2018 and subsequent financial periods. The period of
total uninterrupted engagement including previous renewals and
reappointments of the firm is 5 years.
The non-audit services prohibited by IAASA’s Ethical Standard were
not provided to the Group and we remain independent of the Group
in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
The purpose of our audit work and to whom we owe our
responsibilities
Our report is made solely to the Company’s members, as a body,
in accordance with section 391 of the Companies Act 2014. Our
audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members, as a
body, for our audit work, for this report, or for the opinions we have
formed.
Pat O’Neill
for and on behalf of
Ernst & Young
Chartered Accountants and Statutory Audit Firm
Dublin
17 May 2022
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
146 C&C Group plc Annual Report 2022
Year ended 28 February 2022 Year ended 28 February 2021
Before
exceptional items
Exceptional items
(note 5) Tota l
Before
exceptional items
Exceptional items
(note 5) Tota l
Notes €m €m €m €m €m €m
Revenue 1 1, 7 9 6 .1 - 1 , 7 9 6 .1 1 ,022 .8 - 1 ,022 .8
Excise duties (358 .0 ) - (35 8.0 ) (285.9 ) - (285.9 )
Net revenue 1 1, 4 3 8 .1 - 1 , 4 3 8 .1 73 6. 9 - 73 6. 9
Operating costs 2 (1, 3 9 0 . 2 ) 10 . 6 (1 ,379.6 ) (796.5 ) (25. 2 ) (8 2 1. 7 )
Group operating profit/(loss) 1 4 7. 9 10 . 6 58.5 (5 9.6 ) (25.2 ) (8 4. 8 )
Profit on disposal 5 - 4.5 4.5 - 5.8 5.8
Finance income 6 - 0.2 0.2 - - -
Finance expense 6 (16 .1 ) (6 .7 ) (22. 8 ) (1 9.5 ) ( 7. 9 ) (2 7. 4 )
Share of equity accounted investments’
profit/(loss) after tax 13 2 .6 2 .7 5.3 (6 .1 ) (8.8 ) (14 . 9 )
Profit/(loss) before tax 34.4 11. 3 4 5 .7 (85 .2 ) (3 6 .1 ) (12 1. 3 )
Income tax (expense)/credit 7 (6. 2 ) (2 .4 ) (8.6 ) 14 . 4 2.4 16 . 8
Group profit/(loss) for the
financial year 28.2 8.9 3 7. 1 (70. 8 ) (33.7 ) (104.5 )
Basic earnings/(loss) per share
(cent) 9 9.9 (3 1 .1 )
Diluted earnings/(loss) per share
(cent) 9 9.9 (3 1 .1 )
All of the results are related to continuing operations.
Consolidated Income Statement
For the financial year ended 28 February 2022
Corporate
Governance
Business
& Strategy
Financial
Statements
147
2022 2021
Notes €m €m
Other Comprehensive Income:
Items that may be reclassified to Income Statement in subsequent years:
Foreign currency translation differences arising on the net investment in foreign operations 6 11 . 9 (17. 4 )
Foreign currency recycled on disposal of subsidiary 6 (0. 2 ) -
(Loss)/gain relating to cash flow hedges 24 (0 .1 ) 0.3
Items that will not be reclassified to Income Statement in subsequent years:
Revaluation of property, plant & equipment 11 2.5 0.9
Deferred tax on revaluation of property, plant and equipment 22 (0.6 ) (0. 2 )
Actuarial gain on retirement benefits 23 32. 8 13 .4
Deferred tax charge on actuarial gain on retirement benefits 22 (4. 3 ) (1. 6 )
Share of equity accounted investments’ Other Comprehensive Income 13 2.2 (0.4 )
Net gain/(loss) recognised directly within Other Comprehensive Income 44.2 (5.0 )
Group profit/(loss) for the financial year 3 7. 1 (104.5 )
Total comprehensive income/(expense) for the financial year 8 1. 3 (109.5 )
Consolidated Statement of Comprehensive Income
For the financial year ended 28 February 2022
148 C&C Group plc Annual Report 2022
2022 2021
Notes €m €m
ASSETS
Non-current assets
Property, plant & equipment 11 2 14 . 0 20 4.0
Goodwill & intangible assets 12 6 56.5 6 46.0
Equity accounted investments/financial assets 13 1. 3 6 3 .1
Retirement benefits 23 3 7. 6 10 . 4
Deferred tax assets 22 2 7. 0 24 .6
Derivative financial assets 10 4.3 -
Trade & other receivables 15 4 3.0 41. 8
Current assets
Inventories 14 16 8 . 2 1 21. 3
Trade & other receivables 15 18 6 . 3 10 2 . 8
Cash 6 4.7 10 7. 7
Assets held for sale 16 65.8 13 . 9
TOTAL ASSETS 1, 4 6 8 . 7 1, 3 3 5 . 6
EQUITY
Capital and reserves
Equity share capital 25 4.0 3. 2
Share premium 25 3 47. 2 17 1. 3
Treasury shares 25 (3 6.0 ) (36.5 )
Other reserves 25 98.3 8 3 .1
Retained income 285.5 225. 0
Total Equity 69 9.0 4 4 6 .1
LIABILITIES
Non-current liabilities
Lease liabilities 19 59.8 6 0.7
Interest bearing loans & borrowings 20 2 19 . 4 420. 3
Retirement benefits 23 - 5. 5
Provisions 18 3.9 6.5
Deferred tax liabilities 22 3 0.2 17. 3
Current liabilities
Lease liabilities 19 2 0.2 18 . 9
Derivative financial liabilities 24 0 .1 -
Trade & other payables 17 3 8 6 .1 296.2
Interest bearing loans & borrowings 20 3 6.6 4 9 .7
Provisions 18 8.2 6.2
Current income tax liabilities 5.2 5. 8
Liabilities directly associated with the assets held for sale - 2. 4
Total liabilities 76 9.7 88 9.5
TOTAL EQUITY & LIABILITIES 1, 4 6 8 . 7 1, 3 3 5 . 6
On behalf of the Board
S Gilliland D Forde DATE
Chair Chief Executive Officer 17 May 2022
Consolidated Balance Sheet
As at 28 February 2022
Corporate
Governance
Business
& Strategy
Financial
Statements
149
2022 2021
Notes €m €m
CASH FLOWS FROM OPERATING ACTIVITIES
Group profit/(loss) for the year 3 7. 1 (104.5 )
Finance income 6 (0.2 ) -
Finance expense 6 22 .8 2 7. 4
Income tax expense/(credit) 7 8.6 (1 6.8 )
(Profit)/loss on share of equity accounted investments 13 (5 .3 ) 14 . 9
Impairment of intangible asset 12 0.6 0.3
Impairment of equity accounted investments 5,13 6.4 9 .1
(Revaluation)/ impairment of property, plant & equipment 5 (0.6 ) 1. 2
Depreciation of property, plant & equipment 11,19 29. 2 28. 2
Amortisation of intangible assets 12 2.6 2.6
Profit on disposal 5 (4 . 5 ) (5.8 )
Net profit on disposal of property, plant & equipment (1. 6 ) (0.4 )
Rights Issue costs recorded as exceptional 5 2.6 -
Charge for equity settled share-based payments 4 1. 5 0. 8
Pension contributions: adjustment from charge to payment 23 0.3 0. 5
(Increase)/decrease in inventories (4 3 .6 ) 18 . 2
(Increase)/decrease in trade & other receivables (84.0 ) 3 9.6
Increase/(decrease) in trade & other payables 89.6 (9 7. 2 )
(Decrease)/increase in provisions (0.9 ) 3.5
Interest and similar costs paid (24. 4 ) (23 .4 )
Income taxes (paid)/refunded (3. 2 ) 7. 2
Net cash inflow/(outflow) from operating activities 3 3.0 (94. 6 )
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment 11 (14 . 9 ) (8 .4 )
Purchase of intangible assets 12 (2 . 2 ) (1. 6 )
Net proceeds on disposal of property, plant & equipment 2.3 1. 0
Sale of business – net of cash disposed 10 12 . 9 6.7
Cash outflow re acquisition of equity accounted investments/financial assets 13 (0.3 ) (6.9 )
Net cash outflow from investing activities (2. 2 ) (9. 2 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options/equity interests 0.7 0. 3
Proceeds from Rights Issue 5 17 6 . 3 -
Drawdown of debt 49.5 570 .9
Repayment of debt (2 7 1. 7 ) (4 6 4.0 )
Payment of lease liabilities 19 (2 1. 9 ) (19 . 0 )
Payment of issue costs 20 - (1. 4 )
Payment of Rights Issue costs 5 (9. 2 ) -
Dividends paid 8 - (0. 4 )
Net cash (outflow)/inflow from financing activities (76 .3 ) 86 .4
Net decrease in cash (4 5. 5 ) (1 7. 4 )
Reconciliation of opening to closing cash
Cash at beginning of year 1 0 7. 7 12 3 . 4
Translation adjustment 2.5 1. 7
Net decrease in cash (4 5. 5 ) (1 7. 4 )
Cash at end of financial year 64 .7 1 0 7. 7
A reconciliation of cash to net debt is presented in note 21 to the financial statements.
Consolidated Cash Flow Statement
For the financial year ended 28 February 2022
150 C&C Group plc Annual Report 2022
Equity share
capital
Share
premium
Other capital
reserves*
Cash flow
hedge
reserve
Share-based
payments
reserve
Currency
translation
reserve
Revaluation
reserve
Treasury
shares
Retained
income Total
€m €m €m €m €m €m €m €m €m €m
At 29 February 2020 3.2 17 1. 0 25 .8 0.3 5.8 5 9.0 11. 5 (3 6.6 ) 315 . 4 555.4
Loss for the financial year - - - - - - - - (104.5 ) (104.5 )
Other comprehensive income/(expense) - - - 0. 3 - (17. 4 ) 0.9 - 11. 2 (5.0 )
Total comprehensive income/(expense) - - - 0.3 - (17. 4 ) 0.9 - (93. 3 ) (109.5 )
Dividends on ordinary shares (note 8) - - - - - - - - 0. 2 0.2
Exercised share options (note 25) - 0.3 - - - - - - - 0.3
Reclassification of share-based payments
reserve - - - - (3.3 ) - - - 3.3 -
Reclassification of cash flow hedge reserve - - - (0.6 ) - - - - 0.6 -
Sale of treasury shares/purchase of shares to
satisfy employee share entitlements (note 25) - - - - - - - 0 .1 (0 .1 ) -
Equity accounted investment adjustment (note
13) - - - - - - - - (1 .1 ) (1 .1 )
Equity settled share-based payments (note 4) - - - - 0. 8 - - - - 0.8
Total transactions with owners - 0.3 - (0.6 ) (2 .5 ) - - 0 .1 2.9 0. 2
At 28 February 2021 3.2 17 1. 3 25.8 - 3. 3 41. 6 12 . 4 (3 6.5 ) 225 .0 4 4 6 .1
Profit for the financial year - - - - - - - - 3 7. 1 3 7.1
Other comprehensive income/(expense) - - - (0 .1 ) - 11 . 7 2.5 - 3 0 .1 44.2
Total comprehensive income/(expense) - - - (0 .1 ) - 11 . 7 2.5 - 6 7. 2 8 1. 3
Ordinary Share Capital Issued (note 25) 0.8 17 5 . 5 - - - - - - - 17 6 . 3
Share issue costs (note 5) - - - - - - - - (6.6 ) (6.6 )
Exercised share options (note 25) - 0.4 - - - - - - - 0.4
Reclassification of share-based payments
reserve - - - - (0 .4 ) - - - 0.4 -
Sale of treasury shares/purchase of shares to
satisfy employee share entitlements (note 25) - - - - - - - 0.5 (0.5 ) -
Equity settled share-based payments (note 4) - - - - 1. 5 - - - - 1. 5
Total transactions with owners 0. 8 17 5 . 9 - - 1.1 - - 0.5 (6 .7 ) 17 1 . 6
At 28 February 2022 4 .0 3 4 7. 2 25.8 (0 .1 ) 4 .4 53.3 14 . 9 (3 6.0 ) 285.5 699.0
*Other capital reserves include Other undenominated reserve of €0.9 m and the capital reserve of €2 4.9 m
Consolidated Statement of Changes in Equity
For the financial year ended 28 February 2022
Corporate
Governance
Business
& Strategy
Financial
Statements
151
2022 2021
Notes €m €m
ASSETS
Non-current assets
Financial assets 13 1,158.2 985.4
1,158.2 985.4
Current assets
Trade & other receivables 15 114.7 118.6
Cash 0.1 0.7
114.8 119. 3
TOTAL ASSETS 1,273.0 1,104.7
EQUITY
Equity share capital 25 4.0 3.2
Share premium 25 1,048.2 872.3
Other reserves 25 4.2 3.1
Retained income 21.5 44.7
Total equity 1,077. 9 923.3
LIABILITIES
Non-current liabilities
Interest bearing loans & borrowings 20 143.4 139.7
143.4 139.7
Current liabilities
Interest bearing loans & borrowings 20 (0.9) 4.7
Trade & other payables 17 52.6 37.0
51.7 41.7
Total liabilities 195.1 181.4
TOTAL EQUITY & LIABILITIES 1,273.0 1,104.7
As permitted by section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its separate Income
Statement in the Financial Statements and from filing it with the Registrar of Companies. The Company’s loss for the financial year is €17.0m
(FY2021: €8.8m). In the current financial year, there were no dividends received from subsidiaries (FY2021: €76.6m).
On behalf of the Board
S Gilliland D Forde DATE
Chair Chief Executive Officer 17 May 2022
Company Balance Sheet
As at 28 February 2022
152 C&C Group plc Annual Report 2022
Equity share
capital Share premium
Other
undenominated
reserve
Share-based
payments
reserve
Retained
income Tot al
€m €m €m €m €m €m
Company
At 29 February 2020 3.2 872.0 0.9 4.7 50.0 930.8
Loss for the financial year - - - - (8.8) (8.8)
Total comprehensive expense - - - - (8.8) (8.8)
Dividend on ordinary shares (note 8) - - - - 0.2 0.2
Exercised share options (note 25) - 0.3 - - - 0.3
Reclassification of share-based payments reserve - - - (3.3) 3.3 -
Equity settled share-based payments (note 4) - - - 0.8 - 0.8
Total transactions with owners - 0.3 - (2.5) 3.5 1.3
At 28 February 2021 3.2 872.3 0.9 2.2 44.7 923.3
Loss for the financial year - - - - (17. 0) (17.0)
Total comprehensive expense - - - - (17.0 ) (17.0)
Ordinary Share Capital Issued (note 25) 0.8 175.5 - - - 176.3
Share issue costs (note 5) - - - - (6.6) (6.6)
Exercised share options (note 25) - 0.4 - - - 0.4
Reclassification of share-based payments reserve - - - (0.4) 0.4 -
Equity settled share-based payments (note 4) - - - 1.5 - 1.5
Total transaction with owners 0.8 175.9 - 1.1 (6.2) 171.6
At 28 February 2022 4.0 1,048.2 0.9 3.3 21.5 1,077.9
Company Statement of Changes in Equity
For the financial year ended 28 February 2022
Corporate
Governance
Business
& Strategy
Financial
Statements
153
Significant accounting policies
tax resident in Ireland
year ended 28 February 2022 consolidate the individual financial
statements of the Company and all subsidiary undertakings
(together referred to as “the Group”) together with the Group’s share
of the results and net assets of equity accounted investments for the
year ended 28 February 2022.
The Company and Group financial statements, together the
“financial statements”, were authorised for issue by the Directors on
17 May 2022.
The accounting policies applied in the preparation of the financial
statements for the year ended 28 February 2022 are set out below.
Except if mentioned otherwise these have been applied consistently
for all periods presented in these financial statements and by all
Group entities.
Statement of compliance
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS), as adopted
by the EU and as applied in accordance with Companies Act 2014.
The individual financial statements of the Company have been
prepared in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework (FRS 101). In accordance with
Section 304 of the Companies Act 2014, the Company is availing of
the exemption from presenting its individual Income Statement to
the Annual General Meeting and from filing it with the Registrar of
Companies.
In these financial statements, the Company has applied the
exemptions available under FRS 101 in respect of the following
disclosures:
• A cash flow statement and related notes;
• Disclosures in respect of transactions with wholly owned
subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs; and
• Disclosures in respect of the compensation of Key Management
Personnel.
As the financial statements of the Group include the equivalent
disclosures, the Company has also taken exemptions under FRS
101 available in respect of the following disclosures:
• IFRS 2 Share-Based Payments in respect of Group equity settled
share-based payments.
Statement of Accounting Policies
For the year ended 28 February 2022
Changes in accounting policies and disclosures
IFRS as adopted by the EU applied by the Company and Group in
the preparation of these financial statements are those that were
effective for accounting periods ending on or before 28 February
2022. The IASB have issued the following standards, policies,
interpretations and amendments which were effective for the Group
for the first time in the year ended 28 February 2022:
Interest Rate Benchmark Reform – Phase 2 – Amendments to
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The amendments provide temporary reliefs which address the
financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR). The
amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes
to cash flows that are directly required by the reform, to be treated
as changes to a floating interest rate, equivalent to a movement in
a market rate of interest.
• Permit changes required by IBOR reform to be made to hedge
designations and hedge documentation without the hedging
relationship being discontinued.
• Provide temporary relief to entities from having to meet the
separately identifiable requirement when an RFR instrument is
designated as a hedge of a risk component.
The Group has completed a review of the implications for the Group
as a result of the move from LIBOR to SONIA, it has found that all
contracts and agreements have been updated accordingly. As such
the basis of interest calculations which previously referenced LIBOR
will be correct from 1 January 2022 and no further work is required.
These amendments had no impact on the consolidated financial
statements of the Group. The Group intends to use the practical
expedients in future periods if they become applicable.
Covid-19-Related Rent Concessions beyond 30 June 2021 –
Amendments to IFRS 16
On 28 May 2020, the IASB issued COVID-19 Related Rent
Concessions - amendment to IFRS 16 Leases. The amendments
provide relief to lessees from applying IFRS 16 guidance on lease
modification accounting for rent concessions arising as a direct
consequence of the COVID-19 pandemic. As a practical expedient,
a lessee may elect not to assess whether a COVID-19 related rent
concession from a lessor is a lease modification. A lessee that makes
this election accounts for any change in lease payments resulting
from the COVID-19 related rent concession in the same way it would
account for the change under IFRS 16 if the change were not a lease
modification.
154 C&C Group plc Annual Report 2022
The amendment was intended to apply until 30 June 2021, but as
the impact of the COVID-19 pandemic is continuing, on 31 March
2021, the IASB extended the period of application of the practical
expedient to 30 June 2022. The amendment applies to annual
reporting periods beginning on or after 1 April 2021, however earlier
application is permitted. This amendment had no material impact on
the consolidated financial statements of the Group.
IFRS and IFRIC interpretations being adopted in subsequent
years
A number of new standards, amendments to standards and
interpretations are not yet effective for the year ended 28 February
2022 and have not been applied in preparing these consolidated
financial statements.
These following new standards, amendments and interpretations are
either not expected to have a material impact on the consolidated
financial statements once applied or are still under assessment by
the Group.
Accounting standard/interpretation (Effective date)
Reference to the Conceptual Framework – Amendments to IFRS
3 (1 January 2022)
• In May 2020, the IASB issued Amendments to IFRS 3 Business
Combinations - Reference to the Conceptual Framework.
The amendments are intended to replace a reference to the
Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual
Framework for Financial Reporting issued in March 2018 without
significantly changing its requirements. The IASB also added
an exception to the recognition principle of IFRS 3 to avoid the
issue of potential ‘day 2’ gains or losses arising for liabilities and
contingent liabilities that would be within the scope of IAS 37
or IFRIC 21 Levies, if incurred separately. At the same time, the
IASB decided to clarify existing guidance in IFRS 3 for contingent
assets that would not be affected by replacing the reference to
the Framework for the Preparation and Presentation of Financial
Statements.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2022 and apply prospectively.
Property, Plant and Equipment: Proceeds before Intended Use –
Amendments to IAS 16 (1 January 2022)
• In May 2020, the IASB issued Property, Plant and Equipment —
Proceeds before Intended Use, which prohibits entities deducting
from the cost of an item of property, plant and equipment, any
proceeds from selling items produced while bringing that asset
to the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an
entity recognises the proceeds from selling such items, and the
costs of producing those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on
or after 1 January 2022 and must be applied retrospectively to items
of property, plant and equipment made available for use on or after the
beginning of the earliest period presented when the entity first applies
the amendment. The amendments are not expected to have a material
impact on the Group.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to
IAS 37 (1 January 2022)
• In May 2020, the IASB issued amendments to IAS 37 to specify
which costs an entity needs to include when assessing whether
a contract is onerous or loss-making. The amendments apply a
“directly related cost approach”. The costs that relate directly to
a contract to provide goods or services include both incremental
costs and an allocation of costs directly related to contract activities.
General and administrative costs do not relate directly to a contract
and are excluded unless they are explicitly chargeable to the
counterparty under the contract.
The amendments are effective for annual reporting periods beginning
on or after 1 January 2022. The Group will apply these amendments
to contracts for which it has not yet fulfilled all its obligations at the
beginning of the annual reporting period in which it first applies the
amendments.
IFRS 1 First-time Adoption of International Financial Reporting
Standards – Subsidiary as a first-time adopter (1 January 2022)
• As part of its 2018-2020 annual improvements to IFRS standards
process, the IASB issued an amendment to IFRS 1 First-time
Adoption of International Financial Reporting Standards. The
amendment permits a subsidiary that elects to apply paragraph
D16(a) of IFRS 1 to measure cumulative translation differences using
the amounts reported by the parent, based on the parent’s date of
transition to IFRS. This amendment is also applied to an associate
or joint venture that elects to apply paragraph D16(a) of IFRS 1.
The amendment is effective for annual reporting periods beginning
on or after 1 January 2022 with earlier adoption permitted. The
amendments are not expected to have a material impact on the
Group.
IFRS 9 Financial Instruments – Fees in the ‘10 per cent’ test for
derecognition of financial liabilities (1 January 2022)
• As part of its 2018-2020 annual improvements to IFRS standards
process the IASB issued amendment to IFRS 9. The amendment
clarifies the fees that an entity includes when assessing whether the
terms of a new or modified financial liability are substantially different
from the terms of the original financial liability. These fees include
only those paid or received between the borrower and the lender,
including fees paid or received by either the borrower or lender on
the other’s behalf. An entity applies the amendment to financial
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liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the entity first applies the
amendment.
The amendment is effective for annual reporting periods beginning
on or after 1 January 2022 with earlier adoption permitted. The
Group will apply the amendments to financial liabilities that are
modified or exchanged on or after the beginning of the annual
reporting period in which the entity first applies the amendment.
The amendments are not expected to have a material impact on the
Group.
IAS 41 Agriculture – Taxation in fair value measurements
• As part of its 2018-2020 annual improvements to IFRS standards
process the IASB issued amendment to IAS 41 Agriculture. The
amendment removes the requirement in paragraph 22 of IAS 41
that entities exclude cash flows for taxation when measuring the
fair value of assets within the scope of IAS 41.
An entity applies the amendment prospectively to fair value
measurements on or after the beginning of the first annual reporting
period beginning on or after 1 January 2022 with earlier adoption
permitted. The amendments are not expected to have a material
impact on the Group.
Disclosure of Accounting Policies - Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement
(“PS”) 2 (1 January 2023)
• In February 2021, the IASB issued amendments to IAS 1 and IFRS
Practice Statement 2 Making Materiality Judgements, in which it
provides guidance and examples to help entities apply materiality
judgements to accounting policy disclosures. The amendments
aim to help entities provide accounting policy disclosures that are
more useful by replacing the requirement for entities to disclose
their ‘significant’ accounting policies with a requirement to disclose
their ‘material’ accounting policies and adding guidance on how
entities apply the concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods
beginning on or after 1 January 2023 with earlier application
permitted. Since the amendments to the Practice Statement 2
provide non-mandatory guidance on the application of the definition
of material to accounting policy information, an effective date
for these amendments is not necessary. The Group is currently
assessing the impact of the amendments to determine the impact
they will have on the Group’s accounting policy disclosures.
Definition of Accounting Estimates - Amendments to IAS 8 (1
January 2023)
• In February 2021, the IASB issued amendments to IAS 8,
in which it introduces a definition of ‘accounting estimates’.
The amendments clarify the distinction between changes
in accounting estimates and changes in accounting policies
and the correction of errors. Also, they clarify how entities use
measurement techniques and inputs to develop accounting
estimates.
The amendments are effective for annual reporting periods beginning
on or after 1 January 2023 and apply to changes in accounting
policies and changes in accounting estimates that occur on or after
the start of that period. Earlier application is permitted as long as
this fact is disclosed. The amendments are not expected to have a
material impact on the Group.
Amendments to IAS 1: Classification of Liabilities as Current or
Non-current (1 January 2023)
• In January 2020, the IASB issued amendments to paragraphs 69
to 76 of IAS 1 to specify the requirements for classifying liabilities
as current or non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of the reporting period
- That classification is unaffected by the likelihood that an entity will
exercise its deferral right
- That only if an embedded derivative in a convertible liability is itself
an equity instrument would the terms of a liability not impact its
classification.
The amendments are effective for annual reporting periods beginning
on or after 1 January 2023 and must be applied retrospectively.
However in July 2021, IASB tentatively decided to defer the effective
date of the amendments to no earlier than 1 January 2024. The
amendments are currently under assessment but are not expected to
have a material impact on the Group.
IFRS 17 Insurance Contracts (1 January 2023)
• In May 2017, the IASB issued IFRS 17. It is expected to be effective
for reporting periods beginning on or after 1 January 2023, with
presentation of comparative figures required.
The Group will be unaffected by this standard given it does not issue
insurance contracts.
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12
• In May 2021, the Board issued amendments to IAS 12, which
narrow the scope of the initial recognition exception under IAS 12,
so that it no longer applies to transactions that give rise to equal
taxable and deductible temporary differences.
The amendments apply to changes in accounting policies and
changes in accounting estimates that occur on or after the start of
the effective date. Earlier application is permitted. The amendments
are currently under assessment but are not expected to have a
material impact on the Group.
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
156 C&C Group plc Annual Report 2022
Significant accounting policies
The significant accounting policies applied by the Group in the
preparation of these financial statements are as follows:
Basis of preparation
The Group and the individual financial statements of the Company
are prepared on the going concern and historical cost basis, except
for, retirement benefits, the revaluation of certain items of property,
plant & equipment, share-based payments at date of grant and
derivative financial instruments. The accounting policies have been
applied consistently by Group entities and for all periods presented.
The financial statements are presented in Euro millions to one
decimal place.
(i) Going concern basis
The Directors have adopted the going concern basis in preparing
the financial statements after assessing the Group’s principal risks
including the risks associated with COVID-19.
Following the Rights Issue that the Group successfully completed
in June 2021 in which the Group raised £151m (€176m) and as a
consequence of COVID-19, the debt covenants for 31 August 2022
were renegotiated to increase the threshold of the Group's Net
Debt/Adjusted EBITDA covenant to not exceed 4.5x and to reduce
the Interest cover covenant to be not less than 2.5x. Restrictions
including a minimum liquidity requirement of €150.0m each month
and a monthly gross debt limit of €700.0m also apply. The Group
is on track to meet these amended covenants, which end in
August 2022 and revert to the traditional covenant metrics (Net
Debt: Adjusted EBITDA not exceeding 3.5:1 and Interest Cover not
less than 3.5:1) for its FY2023 full year results. In fact, the Group
is back within its traditional covenant metrics as at 28 February
2022. However the restrictions will continue to apply until the Group
demonstrates compliance with the traditional covenant metrics at
its FY2023 full year results, unless it can show Net Debt: Adjusted
EBITDA not exceeding 3:1 and Interest Cover not less than 4:1 for
its FY2023 half year results, in which case the restrictions will end at
that point.
The proceeds from the Rights Issue of £151m (€176m), coupled
with a return to profitability and cash generation following the easing
of government restrictions around COVID-19 in our core markets
and disciplined balance sheet management has led to net debt
excluding leases and liquidity of €191m and €439m respectively at
year end compared with €362m and €315m respectively in FY2021.
The Group delivered a leverage of 3.4x Net Debt/EBITDA as at 28
February 2022 and as previously noted is back within its traditional
covenant metrics.
The Group returned to profitability in May 2021 following the
easing of government restrictions around COVID-19 in our core
markets, with trading ahead of plan. However, renewed Government
restrictions on the hospitality industry around the key Christmas
trading period adversely impacted performance. With the lifting once
again of restrictions towards the latter stages of FY2022, the Group’s
on-trade performance improved, providing a platform for a clean
start to FY2023. Cost inflation pressures have grown over recent
months and in response, the Group implemented a series of price
increases which, alongside the previously announced €18.0m cost
reduction programme and cost hedge positions taken, affords the
Group a degree of protection from the inflationary environment as
we enter into FY2023.
The Directors assessed the Group’s cash flow forecasts for the
period ending 31 August 2023 (the going concern “assessment
period”). The Cashflows included various stress testing scenarios
around higher costs, an evolving inflationary environment and
reduced volumes, in part associated with the impact of the
ongoing conflict in Ukraine, but even at FY2022 profit levels,
which were significantly curtailed as a consequence of the
COVID-19 restrictions, the Group would have sufficient headroom
to covenants. The Group's cash flow forecasts assume the
continuation of trading over the assessment period with no
lockdowns or the reintroduction of COVID-19 restrictions.
Overall conclusion
The headroom on the covenants within the financing facilities
have been reviewed in detail by management and assessed by
the Directors. Given the successful Rights Issue in June 2021, the
return to profitability in the Group’s core markets, the price increases
implemented, cost hedge positions taken and the disposal of the
Group’s share of Admiral Taverns in FY2023; the Group's cashflow
forecasts demonstrate significant headroom on the covenants
within the financing facilities. Given the quantum of headroom, the
Directors have concluded that the covenants will be satisfied and
therefore consider it appropriate to adopt the going concern basis of
accounting with no material uncertainties as to the Group’s ability to
continue to do so.
Basis of consolidation
The Group’s financial statements consolidate the financial
statements of the Company and all subsidiary undertakings
together with the Group’s share of the results of equity accounted
investments for the year ended 28 February 2022.
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(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls
an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The financial statements
of subsidiaries are included in the consolidated financial statements
from the date on which control commences until the date on which
control ceases.
On 30 April 2004, the Group, previously headed by C&C Group
International Holdings Limited, underwent a reorganisation by virtue
of which C&C Group International Holdings Limited’s shareholders
in their entirety exchanged their shares for shares in C&C Group plc
a newly formed company, which then became the ultimate parent
company of the Group. Notwithstanding the change in the legal
parent of the Group, this transaction has been accounted for as a
reverse acquisition and the consolidated financial statements are
prepared on the basis of the new legal parent having been acquired
by the existing Group except that the capital structure shown is that
of the legal parent.
Non-controlling interests represents the portion of the equity of a
subsidiary not attributable either directly or indirectly to the Parent
Company and are presented separately in the Income Statement
and within equity in the Balance Sheet distinguished from Parent
Company shareholders’ equity, when relevant.
Acquisitions of non-controlling interests are accounted for as
transactions with equity holders in their capacity as equity holders
and therefore no goodwill is recognised as a result of such
transactions. On an acquisition by acquisition basis, the Group
recognises any non-controlling interest in the acquiree either at fair
value or at the non-controlling interest’s proportionate share of the
acquiree’s net assets. If the Group loses control over a subsidiary,
it derecognises the related assets (including Goodwill), liabilities,
non-controlling interest and other components of equity, while any
resultant gain or loss is recognised in the Income Statement. Any
investment retained is recognised at fair value.
(ii) Investments in associates and jointly controlled entities
(equity accounted investments)
The Group’s interests in equity accounted investments comprise
interests in associates and joint ventures. Associates are those
entities in which the Group has significant influence, but not control
or joint control, over the financial and operating policies. A joint
venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the
joint venture. Joint control is the contractually agreed sharing of
control of the arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the parties
sharing control. The Group’s investments in its joint ventures are
accounted for using the equity method from the date joint control is
deemed to arise until the date on which joint control ceases to exist
or when the interest becomes classified as an asset held for sale.
The Income Statement reflects the Group’s share of profit after tax
of the related joint ventures. Investments in joint ventures are carried
in the Balance Sheet at cost, adjusted in respect of post-acquisition
changes in the Group’s share of net assets, less any impairment
in value. If necessary, impairment losses on the carrying amount
of an investment are reported within the Group’s share of equity
accounted investments results in the Income Statement.
Interests in associates are accounted for using the equity method.
They are initially recognised at cost, which includes transaction
costs. Subsequent to initial recognition, the consolidated financial
statements include the Group’s share of the profit or loss and Other
Comprehensive Income of associates, until the date on which
significant influence ceases. Dividends receivable from associates
reduce the carrying amount of the investment.
(iii) Transactions eliminated on consolidation
All intercompany balances and transactions, including unrealised
gains arising from inter-group transactions, have been eliminated
in full. Unrealised losses are eliminated in the same manner as
unrealised gains except to the extent that they provide evidence of
impairment.
Unrealised gains arising from transactions with equity accounted
investments are eliminated against the investment to the extent of
the Group’s interest in the investment.
(iv) Company Financial Statements
Investments in subsidiaries are carried at cost less provision for
impairment. Dividend income is recognised when the right to receive
payment is established.
Property, plant and equipment (note 11)
Property (comprising freehold land & buildings) is recognised
at estimated fair value with the changes in the value of the
property reflected in Other Comprehensive Income in the case
of a revaluation gain, to the extent it does not reverse previously
recognised losses, or as an impairment loss in the Income
Statement to the extent it does not reverse previously recognised
revaluation gains. The fair value is based on estimated market
value at the valuation date, being the estimated amount for which a
property could be exchanged in an arm’s length transaction, to the
extent that an active market exists. Such valuations are determined
based on benchmarking against comparable transactions for
similar properties in similar locations as those of the Group or on
the use of valuation techniques including the use of market yields
on comparable properties. If no active market exists or there are no
other observable comparative transactions, the fair value may be
determined using a valuation technique known as a Depreciated
Replacement Cost approach.
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
158 C&C Group plc Annual Report 2022
Plant & machinery is carried at its revalued amount. In view of the
specialised nature of the Group’s plant & machinery and the lack
of comparable market-based evidence of a similar plant sold, upon
which to base a market approach of fair value, the Group uses a
Depreciated Replacement Cost approach to determine a fair value
for such assets.
Depreciated Replacement Cost is assessed, firstly, by the
identification of the gross replacement cost for each class of plant
& machinery. A depreciation factor derived from both the physical
and functional obsolescence of each class of asset, taking into
account estimated residual values at the end of the life of each class
of asset, is then applied to the gross replacement cost to determine
the net replacement cost. An economic obsolescence factor, which
is derived based on current and anticipated capacity or utilisation
of each class of plant & machinery as a function of total available
production capacity, is applied to determine the Depreciated
Replacement Cost.
Motor vehicles & other equipment are stated at cost less
accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset. When parts of an item of property, plant
& equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant & equipment.
Subsequent costs are included in an asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will
flow to the Group.
Property, plant & equipment, other than freehold land and assets
under construction, which are not depreciated, were depreciated
using the following rates which are calculated to write-off the value
of the asset, less the estimated salvage value of 5% for other plant &
machinery and 15% for storage tanks, over its expected useful life:
Land & Buildings
Land n/a
Buildings – ROI, US, Portugal 2 - 6% straight-line
Buildings – UK 2 - 3% straight-line
Plant & Machinery
Storage tanks 2 - 7% straight-line
Other plant & machinery 6 - 32% reducing
balance
Motor vehicles & other equipment
Motor vehicles 15% straight-line
Other equipment incl returnable
bottles, cases and kegs
5 - 25% straight-line
Judgement is involved in the depreciation policy applied to certain
fixed assets where there is considered to be a salvage value. The
Group considers that such assets have a salvage value equal to
5% of cost for other plant & machinery and 15% for storage tanks,
based on the expected scrap value of the associated assets.
The salvage value and useful lives of property, plant & equipment
are reviewed and adjusted if appropriate at each reporting date
to take account of any changes that could affect prospective
depreciation charges and asset carrying values. When determining
useful economic lives, the principal factors the Group takes into
account are the intensity at which the assets are expected to be
used, expected requirements for the equipment and technological
developments.
On disposal of property, plant & equipment, the cost or valuation
and related accumulated depreciation and impairments are removed
from the Balance Sheet and the net amount, less any proceeds, is
taken to the Income Statement and any amounts included within the
revaluation reserve transferred to the retained income reserve.
The carrying amounts of the Group’s property, plant & equipment
are reviewed at each balance sheet date to determine whether there
is any indication of impairment. An impairment loss is recognised
when the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount (being the greater of fair value less
costs to sell and value in use). Impairment losses are debited directly
to equity under the heading of revaluation reserve to the extent of
any credit balance existing in the revaluation reserve account in
respect of that asset with the remaining balance recognised in the
Income Statement.
Certain property, plant & equipment is remeasured to fair value at
regular intervals. In these cases, the revaluation surplus is credited
directly to Other Comprehensive Income and accumulated in
equity under the heading of revaluation reserve, unless it reverses
a revaluation decrease on the same asset previously recognised as
an expense, where it is first credited to the Income Statement to the
extent of the previous write down.
Leases (note 11 and note 19)
The Group enters into leases for a range of assets, principally
relating to freehold land & buildings, plant & machinery and motor
vehicles & other equipment. These leases have varying terms,
renewal rights and escalation clauses.
A contract contains a lease if it is enforceable and conveys the
right to control the use of a specified asset for a period of time in
exchange for consideration, which is assessed at inception.
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Group as a lessee
(i) Right-of-use assets
The Group recognises a right-of-use asset at the commencement
date for contracts containing a lease. The commencement date is
the date at which the asset is made available for use by the Group.
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets
includes the lease liability adjusted for any payments made at or
before the commencement date, initial direct costs incurred, lease
incentives received and an estimate of the cost to dismantle or
restore the underlying asset or the site on which it is located at the
end of the lease term. The right-of-use asset is depreciated over
the lease term or, where a purchase option is reasonably certain to
be exercised, over the useful economic life of the asset in line with
depreciation rates for owned property, plant & equipment. The right-
of-use asset is tested periodically for impairment if any impairment
indicator is considered to exist.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The commencement date is the
date at which the asset is made available for use by the Group.
Lease payments include fixed payments less any lease incentives
receivable, variable payments that are dependent on a rate or
index known at the commencement date, payments for an optional
renewal period and purchase and termination option payments,
if the Group is reasonably certain to exercise those options.
Management applies judgement in determining whether it is
reasonably certain that a renewal, termination or purchase option
will be exercised.
The lease liability is initially measured at the present value of the
future lease payments, discounted using the incremental borrowing
rate or the interest rate implicit in the lease, if this is readily
determinable, over the remaining lease term. Incremental borrowing
rates are calculated using a portfolio approach, based on the risk
profile of the entity holding the lease and the term and currency of
the lease.
After initial recognition, the lease liability is measured at amortised
cost using the effective interest method. It is remeasured when there
is a change in future lease payments or when the Group changes its
assessment of whether it is reasonably certain to exercise an option
within the contract. A corresponding adjustment is made to the
carrying amount of the right-of-use asset.
The Group chooses whether or not to include certain non-lease
components, such as maintenance costs, in the measurement of
the right-of-use asset and lease liability on an underlying asset class
as afforded by the practical expedients in the standard. Where the
non-lease components are not included, the costs are separated
from lease payments and are expensed as incurred.
(iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases (i.e. those leases that have a lease term of 12
months or less from the commencement date and do not contain
a purchase option). It also applies the lease of low-value assets
recognition exemption to leases where the underlying asset value is
low. Lease payments on short-term leases and leases of low-value
assets are recognised as an expense on a straight-line basis over
the lease term.
Business combinations (note 10)
Upon making any investment, the Group is required to determine
whether any control exists and hence whether the business
acquired is accounted for as a subsidiary. If control is not deemed to
exist then the investment is accounted for as either a joint venture,
associate or financial asset depending on the relevant agreement.
This determination is made based on an assessment of the Group’s
power to affect the activities of the investment and the extent to
which it has exposure to variable returns and the ability to affect
such returns. This assessment is based principally on shareholder
agreements and representation of the Group on the investment’s
management committee as well as any relevant other side
agreements.
Where an investment is made to the extent that the Group is
deemed to have control over the investee, the investment is
accounted for as a business combination using the acquisition
method. In applying the acquisition method, the Group determines
the cost of acquisition, being the fair value of consideration
transferred, and also determines the fair value of identifiable assets
and liabilities acquired.
Where the consideration to be transferred is contingent on future
events the consideration is initially recorded at fair value with any
changes recognised in the Income Statement. The only exception
to this is where the consideration transferred meets the definition
of an equity instrument, in which case the consideration is not
remeasured, and the settlement is accounted for within equity.
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
160 C&C Group plc Annual Report 2022
Goodwill is initially measured at cost, being the excess of the
aggregate of the cost of acquisition, non-controlling interests and
any previous interest held over the fair value of the net identifiable
assets acquired and liabilities assumed. If the fair value of the
net assets acquired is in excess of the aggregate consideration
transferred, the Group reassesses whether it has correctly identified
all of the assets acquired and all of the liabilities assumed and
reviews the procedures used to measure the amounts to be
recognised at the acquisition date. If the reassessment still results in
an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in the Income
Statement immediately.
Goodwill (note 12)
As at the date of acquisition any goodwill acquired is allocated
to each cash-generating unit (CGU) (which may comprise more
than one cash-generating unit) expected to benefit from the
combination’s synergies. Impairment is determined by assessing the
recoverable amount of the CGU to which the goodwill relates. These
CGUs represent the lowest level within the Group at which goodwill
is monitored for internal management purposes.
Where goodwill forms part of a CGU and part of the operation within
that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured on the basis of the
relative values of the operation disposed of and the proportion of the
business segment retained.
Goodwill relating to associates and joint ventures is included in the
carrying amount of the investment and is neither amortised nor
individually tested for impairment. Where indicators of impairment
of an investment arise in accordance with the requirements of IAS
36, the carrying amount is tested for impairment by comparing its
recoverable amount with its carrying amount.
Intangible assets (other than goodwill) (note 12)
An intangible asset, which is a non-monetary asset without a
physical substance, is capitalised separately from goodwill as part
of a business combination at cost (fair value at date of acquisition)
to the extent that it is probable that the expected future economic
benefits attributable to the asset will flow to the Group and that its
fair value can be reliably measured. Acquired brands and other
intangible assets are deemed to be identifiable and recognised
when they are controlled through contractual or other legal rights, or
are separable from the rest of the business, regardless of whether
those rights are transferable or separable from the Group or from
other rights and obligations.
Subsequent to initial recognition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated
impairment losses. The carrying values of intangible assets
considered to have an indefinite useful economic life are
reviewed for indicators of impairment regularly and are subject to
impairment testing on an annual basis unless events or changes
in circumstances indicate that the carrying values may not be
recoverable and impairment testing is required earlier.
Software costs incurred with respect to new systems and costs
incurred in acquiring software and licences that will contribute to
future period financial benefits through revenue generation and/or
cost reduction are capitalised. Costs capitalised include external
direct costs of materials and service and direct payroll and payroll
related costs of employees’ time spent on the development side of
the project.
Cloud software license agreements to use cloud software are
treated as service contracts and expensed in the Income Statement,
unless the Group has both the contractual right to take possession
of the software anytime without significant penalty, and the ability to
run the software independently of the host vendor.In such cases,
the license agreement is capitalised as software within intangible
assets.
The amortisation charge on intangible assets considered to have
finite lives is calculated to write-off the book value of the asset over
its useful life on a straight-line basis on the assumption of zero
residual value.
The useful lives of the Group’s intangible assets are as follows:
Trade relationship re Tennent’s acquisition 20 years
Trade relationship re Wallaces acquisition 10 years
Trade relationship re Gleeson acquisition 15 years
Trade relationship re Matthew Clark and
Bibendum acquisition
15 years
Software and licence costs 5 - 8 years
Impairment of non-financial assets
Further disclosures relating to impairment of non-financial assets are
also provided in the following notes:
• Goodwill and intangible assets with indefinite lives: Note 12
• Intangible assets: Note 12
• Property, plant and equipment: Note 11
• Investments in associates and joint ventures: Note 13
The Group assesses at each reporting date, whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Group
estimates the asset’s recoverable amount. An asset’s recoverable
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amount is the higher of an asset’s or CGU’s fair value less costs of
disposal and its value in use. The recoverable amount is determined
for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or
groups of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model
is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other available
fair value indicators.
Impairment losses of continuing operations are recognised in
the Income Statement in expense categories consistent with the
function of the impaired asset, except for properties previously
revalued with the revaluation taken to Other Comprehensive
Income. For such properties, the impairment is recognised in
Other Comprehensive Income up to the amount of any previous
revaluation.
For assets excluding goodwill, an assessment is made at each
reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have
decreased. If such indication exists, the Group estimates the asset’s
or CGU’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised
in the Income Statement unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation
increase.
Goodwill is subject to impairment testing on an annual basis and at
any time during the year if an indicator of impairment is considered
to exist. In the year in which a business combination is effected
and where some or all of the goodwill allocated to a particular
cash-generating unit arose in respect of that combination, the
cash-generating unit is tested for impairment prior to the end of
the relevant annual period. Where the carrying value exceeds the
estimated recoverable amount (being the greater of the fair value
less costs of disposal and value-in-use), an impairment loss is
recognised by writing down goodwill to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset. The recoverable amount of goodwill
is determined by reference to the cash-generating unit to which the
goodwill has been allocated. Impairment losses arising in respect of
goodwill are not reversed once recognised.
Intangible assets with indefinite useful economic lives are
reviewed for indicators of impairment regularly and are subject to
impairment testing on an annual basis unless events or changes
in circumstances indicate that the carrying values may not be
recoverable and impairment testing is required earlier.
Retirement benefit obligations (note 23)
The Group operates a number of defined contribution and defined
benefit pension schemes.
Obligations to the defined contribution pension schemes are
recognised as an expense in the Income Statement as the related
employee service is received. Under these schemes, the Group has
no obligation, either legal or constructive, to pay further contributions
in the event that the fund does not hold sufficient assets to meet its
benefit commitments.
The liabilities and costs associated with the Group’s defined benefit
pension schemes, all of which are funded and administered under
trusts which are separate from the Group, are assessed on the
basis of the projected unit credit method by professionally qualified
actuaries and are arrived at using actuarial assumptions based
on market expectations at the reporting date. The discount rates
employed in determining the present value of the schemes’ liabilities
are determined by reference to market yields, at the reporting date,
on high-quality corporate bonds of a currency and term consistent
with the currency and term of the associated post-employment
benefit obligations. The fair value of scheme assets is based on
market price information, measured at bid value for publicly quoted
securities.
The resultant defined benefit pension net surplus or deficit is shown
within either non-current assets or non-current liabilities on the face
of the Balance Sheet and comprises the total for each plan of the
present value of the defined benefit obligation less the fair value of
plan assets out of which the obligations are to be settled directly.
The assumptions (disclosed in note 23) underlying these valuations
are updated at each reporting period date based on current
economic conditions and expectations (discount rates, salary
inflation and mortality rates) and reflect any changes to the terms
and conditions of the post retirement pension plans. The deferred
tax liabilities and assets arising on pension scheme surpluses
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
162 C&C Group plc Annual Report 2022
and deficits are disclosed separately within deferred tax assets or
liabilities, as appropriate.
When the benefits of a defined benefit scheme are improved,
the portion of the increased benefit relating to the past service of
employees is recognised as an expense immediately in the Income
Statement.
The expected increase in the present value of scheme liabilities
arising from employee service in the current period is recognised
in arriving at operating profit or loss together with the net
interest expense/(income) on the net defined benefit liability/
(asset). Differences between the actual return on plan assets and
the interest income, experience gains and losses on scheme
liabilities, together with the effect of changes in the current or
prior assumptions underlying the liabilities are recognised in Other
Comprehensive Income. The amounts recognised in the Income
Statement and Other Comprehensive Income and the valuation of
the defined benefit pension net surplus or deficit are sensitive to the
assumptions used.
Company
The Company has no direct employees and is not the sponsoring
employer for any of the Group’s defined benefit pension schemes.
Income tax (note 7 and note 22)
Current income tax
Current tax expense represents the expected tax amount to be
paid in respect of taxable income for the current year and is based
on reported profit and the expected statutory tax rates, reliefs,
and allowances applicable in the jurisdictions in which the Group
operates. Current tax for the current and prior years, to the extent
that it is unpaid, is recognised as a liability in the Balance Sheet.
Deferred tax
Deferred tax is provided on the basis of the Balance Sheet
liability method on all temporary differences at the reporting date.
Temporary differences are defined as the difference between the
tax bases of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets and liabilities are not
subject to discounting and are measured at the tax rates that are
expected to apply in the period in which the asset is recovered or
the liability is settled based on tax rates and tax laws that have been
enacted or substantively enacted at the balance sheet date.
Deferred tax assets and liabilities are recognised for all temporary
differences except where they arise from:
• The initial recognition of goodwill or an asset or a liability in a
transaction that is not a business combination and affects neither
the accounting profit or loss nor the taxable profit or loss at the
time of the transaction, or,
• Taxable temporary differences associated with investments in
subsidiaries where the timing of the reversal of the temporary
difference is subject to the Group’s control and it is probable that
a reversal will not be recognised in the foreseeable future.
Deferred tax assets in respect of deductible temporary differences
are recognised only to the extent that it is probable that taxable
profits or taxable temporary differences will be available against
which to offset these items. The recognition or non-recognition of
deferred tax assets as appropriate also requires judgement as it
involves an assessment of the future recoverability of those assets.
The recognition of deferred tax assets is based on management’s
judgement and estimate of the most probable amount of future
taxable profits and taking into consideration applicable tax
legislation in the relevant jurisdiction. The carrying amounts of
deferred tax assets are subject to review at each reporting date and
are reduced to the extent that future taxable profits are considered
to be insufficient to allow all or part of the deferred tax asset to be
utilised.
The Group offsets deferred tax assets and deferred tax liabilities only
if it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis,
or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Deferred tax and current tax are recognised as a component of the
tax expense in the Income Statement except to the extent that they
relate to items recognised directly in Other Comprehensive Income
or equity (for example, certain derivative financial instruments
and actuarial gains and losses on defined benefit pension
schemes), in which case the related tax is also recognised in Other
Comprehensive Income or equity.
Company financial assets
The change in legal parent of the Group on 30 April 2004, as
disclosed in detail in that year’s annual report, was accounted for as
a reverse acquisition. This transaction gave rise to a financial asset in
the Company’s accounts, which relates to the fair value at that date
of its investment in subsidiaries. Financial assets are reviewed for
impairment if there are any indications that the carrying value may
not be recoverable.
Share options granted to employees of subsidiary companies are
accounted for as an increase in the carrying value of the investment
in subsidiaries and the share-based payment reserve.
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Revenue recognition
IFRS 15 Revenue from Contracts with Customers (IFRS 15)
establishes a five-step model to account for revenue arising from
contracts with customers. Under IFRS 15, revenue comprises an
amount that reflects the consideration to which an entity expects
to be entitled to in exchange for transferring goods or services to
a customer, these are exclusive of value added tax, after allowing
for discounts, rebates, allowances for customer loyalty and other
pricing related allowances and incentives. Provision is made for
returns where appropriate. The Group recognises revenue in the
amount of the price expected to be received for goods and services
supplied at a point in time or over time, as contractual performance
obligations are fulfilled, and control of goods and services passes
to the customer. Where revenue is earned over time as contractual
performance obligations are satisfied, the percentage-of-completion
method remains the primary method by which revenue recognition
is measured.
The Group manufactures and distributes branded cider, beer, wine,
spirits and soft drinks in which revenue is recognised at a point in
time when control is deemed to pass to the customer upon leaving
the Group’s premises or upon delivery to a customer depending on
the terms of sale. Contracts do not contain multiple performance
obligations (as defined by IFRS 15).
Across the Group, goods are often sold with discounts or rebates
based on cumulative sales over a period. The variable consideration
is only recognised when it is highly probable that it will not be
subsequently reversed and is recognised using the most likely
amount or expected value methods, depending on the individual
contract terms. In the application of appropriate revenue recognition,
judgement is exercised by management in the determination of the
likelihood and quantum of such items based on experience and
historical trading patterns.
The Group is deemed to be a principal to an arrangement when
it controls a promised good or service before transferring them to
a customer; and accordingly recognises the revenue on a gross
basis. The Group is determined to be an agent to a transaction, in
circumstances where the Group arranges for the provision of goods
or services by another third party, based on the principal of control;
the net amount retained after the deduction of any costs to the
principal is recognised as revenue.
Excise duty
Excise duty is levied at the point of production in the case of the
Group’s manufactured products and at the point of importation in
the case of imported products in the relevant jurisdictions in which
the Group operates. As the Group’s manufacturing and warehousing
facilities are revenue approved and registered excise facilities, the
excise duty liability generally crystallises on transfer of product from
duty in suspense to duty paid status which normally coincides with
the point of sale. The duty number disclosed represents the cash
cost of duty paid on the Group’s products. Where goods are bought
duty paid, and subsequently sold, the duty element is not included
in the duty line within Net revenue but is included within the cost of
goods sold.
Net revenue
Net revenue is defined by the Group as revenue less excise duty
paid by the Group.
Exceptional items
The Group has adopted an accounting policy and Income Statement
format that seeks to highlight specific significant items of income
and expense within the Group results for the year. The Directors
believe this provides a more useful analysis. These significant items
are determined based on the following qualitative and quantitative
framework. The Group considers items which are significant either
because of their size or their nature, and which are non-recurring.
For items to be considered significant, it must initially meet at least
one of the following criteria:
• Non-recurring items – these are events/transactions that are
infrequent and unusual, or one-off in nature. These include items
such as restructuring and integration projects, litigation costs and
settlements, impairment of assets, COVID-19, acquisition related
costs, and gains/losses from the sale of assets or businesses.
• Inconsistent items – these are items which are inconsistent
amounts year on year (where applicable) such as revaluation
gains/losses.
• For an item to be deemed exceptional, it must have a significant
effect on C&C’s profitability and should therefore be separately
disclosed. For the purposes of FY2022 year-end, the Group
determined a material amount that would influence the economic
decisions of a user of the financial statements.
If an item meets at least one of the criteria, the Directors then
exercise judgement evaluated based on the above criteria as to
whether the item meets the Group definition of significant.
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
164 C&C Group plc Annual Report 2022
Finance income and expenses
Finance income comprises interest income on funds invested and
any gains on hedging instruments that are recognised in the Income
Statement. Interest income is recognised as it accrues in the Income
Statement, using the effective interest method.
Finance expenses comprise interest expense on borrowings,
interest expense on sale of trade receivables, bank guarantee
fees, amortisation of borrowing issue costs, losses on hedging
instruments that are recognised in the Income Statement, ineffective
portion of changes in the fair value of cash flow hedges and
unwinding the discount on provisions and leases. All borrowing
costs are recognised in the Income Statement using the effective
interest method.
Research and development
Expenditure on research that is not related to specific product
development is recognised in the Income Statement as incurred.
Expenditure on the development of new or substantially improved
products or processes is capitalised if the product or process is
technically feasible and commercially viable.
Government grants
Grants are recognised at their fair value when there is a reasonable
assurance that the grant will be received, and all attaching
conditions have been complied with.
Capital grants received and receivable by the Group are credited to
government grants and are amortised to the Income Statement on
a straight-line basis over the expected useful lives of the assets to
which they relate.
Revenue grants are recognised as income over the periods
necessary to match the grant on a systematic basis to the costs that
it is intended to compensate.
Assets held for sale
Non-current assets, or disposal groups comprising of assets and
liabilities, are classified as held-for-sale if it is highly probable that
they will be recovered primarily through sale rather than through
continuing use. Such assets, or disposal groups, are generally
measured at the lower of their carrying amount and fair value less
costs to sell. Any impairment loss on a disposal group is allocated
first to goodwill, and then to the remaining assets and liabilities
on a pro rata basis, except that no loss is allocated to inventories,
financial assets, deferred tax assets or employee benefit assets,
which continue to be measured in accordance with the Group’s
other accounting policies as applicable.
Impairment losses on initial classification as held-for-sale and
subsequent gains and losses on remeasurement are recognised in
the Income Statement. Once classified as held-for-sale, intangible
assets and property, plant and equipment are no longer amortised
or depreciated, and any equity accounted investee is no longer
equity accounted.
Discontinued operations
A discontinued operation is a component of the Group’s business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which; represents a separate major
line of business or geographic area of operations; is part of a single
co-ordinated plan to dispose of a separate major line of business
or geographic area of operations; or is a subsidiary acquired
exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of
disposal or when the operation meets the criteria to be classified
as held-for-sale. When an operation is classified as a discontinued
operation, the comparative Income Statement and Other
Comprehensive Income is represented as if the operation had been
discontinued from the start of the comparative year.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal organisational and management structure of the Group and
the internal financial information provided to the Chief Operating
Decision-Maker, the executive Directors, who are responsible for
the allocation of resources and the monitoring and assessment of
performance of each of the operating segments.
Following a business review and organisational structure change
in FY2022, this has transitioned from four segment operating
model (Ireland, Great Britain, Matthew Clark and Bibendum and
International) to a two segment operating model. The Group has
determined that its reportable segments are Ireland and Great
Britain. The reportable segments reflect the way financial information
is reviewed by the Group’s CODM.
The previous reportable segments, as disclosed in the Group’s
FY2021 annual report have been realigned to follow the Group’s
new operating segments and how the business will be managed
internally going forward. The Group has restated the operating
segment information for the year ended 28 February 2021
accordingly.
The analysis by segment includes both items directly attributable to
a segment and those, including central overheads that are allocated
on a reasonable basis to those segments in internal financial
reporting packages.
For further information on operating segments see note 1.
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Foreign currency translation
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”).
The consolidated financial statements are presented in Euro, which
is the presentation currency of the Group and both the presentation
and functional currency of the Company.
Transactions in foreign currencies are translated into the functional
currency of each entity at the foreign exchange rate ruling at the
date of the transaction. Non-monetary assets carried at historic
cost are not subsequently retranslated. Monetary assets and
liabilities denominated in foreign currencies at the reporting date
are translated into functional currencies at the foreign exchange
rate ruling at that date. Foreign exchange movements arising
on translation are recognised in the Income Statement with the
exception of all monetary items designated as a hedge of a net
investment in a foreign operation, which are recognised in the
consolidated financial statements in Other Comprehensive Income
until the disposal of the net investment, at which time they are
recognised in the Income Statement for the year.
The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on consolidation, are translated
to Euro at the foreign exchange rates ruling at the reporting date.
The revenues and expenses of foreign operations are translated to
Euro at the average exchange rate for the financial period where
that represents a reasonable approximation of actual rates. Foreign
exchange movements arising on translation of the net investment
in a foreign operation, including those arising on long-term intra-
group loans for which settlement is neither planned nor likely
to happen in the foreseeable future and as a consequence are
deemed quasi equity in nature, are recognised directly in Other
Comprehensive Income in the consolidated financial statements in
the foreign currency translation reserve. The portion of exchange
gains or losses on foreign currency borrowings or derivatives used
to provide a hedge against a net investment in a foreign operation
that is designated as a hedge of those investments, is recognised
directly in Other Comprehensive Income to the extent that they are
determined to be effective. The ineffective portion is recognised
immediately in the Income Statement for the year.
Any movements that have arisen since 1 March 2004, the date of
transition to IFRS, are recognised in the currency translation reserve
and are recycled through the Income Statement on disposal of the
related business. Translation differences that arose before the date
of transition to IFRS as adopted by the EU in respect of all non-Euro
denominated operations are not presented separately.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost includes all expenditure incurred in acquiring the inventories
and bringing them to their present location and condition and is
based on the first-in first-out principle.
In the case of finished goods and work in progress, cost includes
direct production costs and the appropriate share of production
overheads plus excise duties, where appropriate. Net realisable
value is the estimated selling price in the ordinary course of
business, less estimated costs necessary to complete the sale.
Provision is made for slow-moving or obsolete stock where
appropriate.
Provisions
A provision is recognised in the Balance Sheet when the Group
has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are measured at the
Directors’ best estimate of the expenditure required to settle the
obligation at the balance sheet date and are discounted to present
value at an appropriate rate if the effect of the time value of money is
deemed material. The carrying amount of the provision increases in
each period to reflect the passage of time and the unwinding of the
discount. The increase in the provision due to the passage of time is
recognised in the Income Statement within finance expense.
A contingent liability is not recognised but is disclosed where the
existence of the obligation will only be confirmed by future events or
where it is not probable that an outflow of resources will be required
to settle the obligation or where the amount of the obligation cannot
be measured with reasonable reliability. Contingent assets are not
recognised but are disclosed where an inflow of economic benefits
is probable. Provisions are not recognised for future operating
losses; however, provisions are recognised for onerous contracts
where the unavoidable cost exceeds the expected benefit.
Due to the inherent uncertainty with respect to such matters, the
value of each provision is based on the best information available
at the time, including advice obtained from third party experts, and
is reviewed by the Directors on a periodic basis with the potential
financial exposure reassessed. Revisions to the valuation of a
provision are recognised in the period in which such a determination
is made, and such revisions could have a material impact on the
financial performance of the Group.
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
166 C&C Group plc Annual Report 2022
Share-based payments
The Group operates a number of Share Option Schemes,
Performance Share Plans and cash settled award schemes, listed
below:
• Executive Share Option Scheme (the ‘ESOS’),
• Long-Term Incentive Plan (the ‘LTIP’),
• Recruitment and Retention Plan,
• Deferred Bonus Plan (‘DBP’), and
• Partnership and Matching Share Schemes.
Equity settled share-based payment transactions
Group share schemes allow certain employees to acquire shares
in the Company. The fair value of share entitlements granted is
recognised as an employee expense in the Income Statement
with a corresponding increase in equity, while the cost of acquiring
shares on the open market to satisfy the Group’s obligations under
the Partnership and Matching Share Schemes is recognised in the
Income Statement as incurred.
All awards are subject to non-market vesting conditions only, the
details of which are set out in note 4.
The expense for the share entitlements shown in the Income
Statement is based on the fair value of the total number of
entitlements expected to vest and is allocated to accounting periods
on a straight-line basis over the vesting period. The cumulative
charge to the Income Statement at each reporting date reflects
the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately
vest. It is reversed only where entitlements do not vest because all
non-market performance conditions have not been met or where
an employee in receipt of share entitlements leaves the Group
before the end of the vesting period and forfeits those options in
consequence.
The proceeds received by the Company net of any directly
attributable transaction costs on the vesting of share entitlements
met by the issue of new shares are credited to share capital and
share premium when the share entitlements are exercised. Amounts
included in the share-based payments reserve are transferred to
retained income when vested options are exercised, forfeited post-
vesting or lapse.
The dilutive effect of outstanding options, to the extent that they
are to be settled by the issue of new shares and to the extent that
the vesting conditions would have been satisfied if the end of the
reporting period was the end of the contingency period, is reflected
as additional share dilution in the determination of diluted earnings
per share.
Financial instruments
Trade & other receivables
Trade receivables are initially recognised at fair value (which usually
equals the original invoice value) and are subsequently measured
at amortised cost less loss allowance for impairment losses. The
Group applies the simplified approach permitted by IFRS 9 Financial
Instruments to measure expected credit losses for trade receivables,
which requires expected lifetime losses to be recognised from
initial recognition of the receivables. The carrying amount of these
receivables approximates their fair value as these are short-term in
nature; hence, the maximum exposure to credit risk at the reporting
date is the carrying value of each class of receivable.
Trade receivables are derecognised when the rights to receive cash
flows from the asset have expired or the Group has transferred
its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material
delay to a third party under a ‘pass-through’ arrangement; and
either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Cash
Cash in the Balance Sheet comprises of cash at bank and in hand
and short-term deposits with an original maturity of three months or
less. Bank overdrafts that are repayable on demand and form part
of the Group’s cash management are included as a component of
cash for the purpose of the statement of cash flows.
Advances to customers
Advances to customers, which can be categorised as either an
advance of discount or a repayment/annuity loan conditional on the
achievement of contractual sales targets, are initially recognised at
fair value, amortised to the Income Statement (and classified within
sales discounts as a reduction in revenue) over the relevant period
to which the customer commitment is made, and subsequently
carried at amortised cost less an impairment allowance. Where
there is a volume target the amortisation of the advance is included
in sales discounts as a reduction to revenue. Regarding advances
to customers, the Group applies the general approach to measure
expected credit losses which requires a loss provision to be
recognised based on twelve month or lifetime expected credit
losses, provided a significant increase in credit risk has occurred
since initial recognition. The Group Credit Committee reviews debt
collection trends and commercial market information to assess any
significant change in credit risk.
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Trade & other payables
Trade & other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest rate method.
Interest-bearing loans & borrowings
Interest-bearing loans & borrowings are recognised initially at fair
value less attributable transaction costs and are subsequently
measured at amortised cost with any difference between the
amount originally recognised and redemption value being
recognised in the Income Statement over the period of the
borrowings on an effective interest rate basis. Where the early
refinancing of a loan results in a significant change in the present
value of the expected cash flows, the original loan is derecognised
and the replacement loan is recognised at fair value. The difference
between the original loan and the fair value of the replacement loan
is recognised in finance costs in the year.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date that
a derivative contract is entered into, and they are subsequently
remeasured to their fair value at the end of each reporting period.
The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument and,
if so, the nature of the item being hedged. The Group designates
certain derivatives as hedges of a particular risk associated with the
cash flows of recognised assets and liabilities and highly probable
forecast transactions (cash flow hedges). The gains or losses
related to derivatives not used as effective hedging instruments are
recognised in the Income Statement.
At inception of the hedge relationship, the Group documents the
economic relationship between hedging instruments and hedged
items, including whether changes in the cash flows of the hedging
instruments are expected to offset changes in the cash flows
of hedged items. The Group documents its risk management
objective and strategy for undertaking its hedge transactions. The
fair values of derivative financial instruments designated in hedge
relationships are disclosed in note 24. Movements in the hedging
reserve in shareholders’ equity are shown in note 24. The full fair
value of a hedging derivative is classified as a non-current asset
or liability when the remaining maturity of the hedged item is more
than 12 months; it is classified as a current asset or liability when
the remaining maturity of the hedged item is less than 12 months.
The Group only trades derivatives for hedging activities. The Group
documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or
cash flows of hedged items.
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in the fair value of derivatives that
are designated and qualify as cash flow hedges is recognised in
the cash flow hedge reserve within equity. The gain or loss relating
to the ineffective portion is recognised immediately in the Income
Statement as finance expenses.
The Group uses forward contracts to hedge forecast transactions,
the Group generally designates the full change in fair value of the
forward contract, i.e. the forward rate including forward points, as
the hedging instrument. Gains or losses relating to the effective
portion of the change in fair value of the entire forward contract are
recognised in the cash flow hedge reserve within equity.
Amounts accumulated in equity are reclassified in the periods
when the hedged item affects profit or loss. Where the hedged item
subsequently results in the recognition of a non-financial asset (such
as inventory), the deferred hedging gains and losses are included
within the initial cost of the asset. The deferred amounts are
ultimately recognised in profit or loss, since the hedged item affects
profit or loss (for example, through operating costs).
When a hedging instrument expires, or is sold or terminated, or
when a hedge no longer meets the criteria for hedge accounting,
any cumulative deferred gain or loss in equity at that time remains
in equity until the forecast transaction is no longer expected to
occur, the cumulative gain or loss that were reported in equity are
immediately reclassified to profit or loss.
Cash flow hedge reserve
The cash flow hedge reserve is used to recognise the effective
portion of gains or losses on derivatives that are designated and
qualify as cash flow hedges, as described in note 24. Amounts are
subsequently either transferred to the initial cost of inventory or
reclassified to profit or loss as appropriate.
Net investment hedging
Any gain or loss on the effective portion of a hedge of a net
investment in a foreign operation using a foreign currency
denominated monetary liability is recognised in Other
Comprehensive Income while the gain or loss on the ineffective
portion is recognised immediately in the Income Statement.
Cumulative gains and losses remain in Other Comprehensive
Income until disposal of the net investment in the foreign operation
at which point the related differences are transferred to the Income
Statement as part of the overall gain or loss on disposal.
Share capital/premium
Ordinary shares are classified as equity instruments. Incremental
costs directly attributable to the issuance of new shares are shown
in equity as a deduction from the gross proceeds.
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
168 C&C Group plc Annual Report 2022
Treasury shares
Equity share capital issued under its Joint Share Ownership Plan,
which is held in trust by an Employee Trust is classified as treasury
shares on consolidation until such time as the Interests lapse and
the shares are cancelled or disposed of by the Trust.
Own shares acquired under share buyback programme
The cost of ordinary shares purchased by a subsidiary of the Group
on the open market is recorded as a deduction from equity on the
face of the Group Balance Sheet. When these shares are cancelled,
an amount equal to the nominal value of any shares cancelled is
included within other undenominated capital fund and the cost is
deducted from retained earnings.
Dividends
Final dividends on ordinary shares are recognised as a liability in
the financial statements only after they have been approved at an
Annual General Meeting of the Company. Interim dividends on
ordinary shares are recognised when they are paid.
Significant Judgements and Estimates
The preparation of the consolidated financial statements in
conformity with IFRS as adopted by the EU requires management
to make certain estimates, assumptions and judgements that affect
the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. The significant judgements,
estimates and assumptions used by management may differ from
the actual outcome of the transaction and consequently the realised
value of the associated assets and liabilities may vary. The Group
has considered the impact of climate change on the consolidated
financial statements, including the carrying value of assets, the
useful economic life of assets, and provisions. The significant
judgements and estimates which have been applied, and which are
expected to have a material impact, are as follows:
Significant judgements
Income Taxes
The Group is subject to income tax in a number of jurisdictions,
and judgement is required in determining the worldwide provision
for taxes. There are many transactions and calculations during
the ordinary course of business, for which the ultimate tax
determination is uncertain and the complexity of the tax treatment
may be such that the final tax charge may not be determined until
a formal resolution has been reached with the relevant tax authority
which may take extended time periods to conclude. The ultimate
tax charge may, therefore, be different from that which initially is
reflected in the Group’s consolidated tax charge and provision and
any such differences could have a material impact on the Group’s
income tax charge and consequently financial performance.
The determination of the provision for income tax is based on
management’s understanding of the relevant tax law and judgement
as to the appropriate tax charge, and management believe that
all assumptions and estimates used are reasonable and reflective
of the tax legislation in jurisdictions in which the Group operates.
Where the final tax charge is different from the amounts that were
initially recorded, such differences are recognised in the income tax
provision in the period in which such determination is made.
Deferred tax assets in respect of deductible temporary differences
are recognised only to the extent that it is probable that taxable
profits or taxable temporary differences will be available against
which to offset these items. The recognition or non-recognition of
deferred tax assets as appropriate also requires judgement as it
involves an assessment of the future recoverability of those assets.
The recognition of deferred tax assets is based on management’s
judgement and estimate of the most probable amount of future
taxable profits and taking into consideration applicable tax
legislation in the relevant jurisdiction.
Valuation of property, plant and equipment
The Group values its freehold land & buildings and plant &
machinery at market value/Depreciated Replacement Cost
and consequently, carries out an annual valuation. The Group
engages external valuers to value the Group’s property, plant &
machinery at a minimum every three years or as at the date of
acquisition for assets acquired as part of a business combination.
An external valuation was conducted at 28 February 2022 by
PricewaterhouseCoopers LLP to value the freehold land & buildings
and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark
(Glasgow) and Portugal sites.
The key assumptions used to determine the fair value of the freehold
land & buildings and plant & machinery and sensitivity analyses are
provided in note 11.
Sources of estimation uncertainty
Recoverable amount of goodwill
The impairment testing process requires management to make
significant estimates regarding the future cash flows expected to
be generated by cash-generating units to which goodwill has been
allocated. Future cash flows relating to the eventual disposal of
these cash-generating units and other factors may also be relevant
to determine the fair value of goodwill. Management periodically
evaluates and updates the estimates based on the conditions
which influence these variables. The assumptions and conditions
for determining impairments of goodwill reflect management’s best
assumptions and estimates (discount rates, terminal growth rates,
Corporate
Governance
Business
& Strategy
Financial
Statements
169
Statement of Accounting Policies
For the year ended 28 February 2022 (continued)
forecasted volume, net revenue, operating profit) but these items
involve inherent uncertainties described above, many of which are
not under management’s control. The Group also considered the
potential impact of climate change. This is an area of estimation and
judgement. As a result, the accounting for such items could result
in different estimates or amounts if management used different
assumptions or if different conditions occur in future accounting
periods.
The inputs to the value in use calculations are disclosed in note 12.
Incremental borrowing rates on leases
Management use estimation in determining the incremental
borrowing rates for leases which has a significant impact on the
lease liabilities and right-of-use assets recognised. The incremental
borrowing rates includes several key components such as, a
reference rate (incorporating currency, economic environment and
term of lease); a financing spread adjustment, an entity specific
adjustment (if applicable) and a lease specific adjustment (if
applicable, for example, a property lease compared to vehicle/other
leases, and the term of the lease).
Please refer to note 19 for the carrying amounts of the right-of-use
assets and the lease liability impacted.
Pension valuation
Significant estimates are used in the determination of the pension
obligation, the amounts recognised in the Income Statement and
Statement of Other Comprehensive Income and the valuation of
the defined benefit pension net surplus or deficit are sensitive to
the assumptions used. The assumptions underlying the actuarial
valuations (including discount rates, rates of increase in future
compensation levels, mortality rates, salary and pension increases,
future inflation rates and healthcare cost trends), from which the
amounts recognised in the consolidated financial statements are
determined, are updated annually based on current economic
conditions and for any relevant changes to the terms and conditions
of the pension and post-retirement plans. These assumptions can
be affected by (i) the discount rate, changes in the rates of return
on high-quality corporate bonds; (ii) for future compensation levels,
future labour market conditions and (iii) for healthcare cost trend
rates, the rate of medical cost inflation in the relevant regions.
The weighted average actuarial assumptions used and sensitivity
analysis in relation to the significant assumptions employed in the
determination of pension and other post-retirement liabilities are
contained in note 23 to the consolidated financial statements.
Whilst management believes that the assumptions used are
appropriate, differences in actual experience or changes in
assumptions may affect the obligations and expenses recognised
in future accounting periods. The assets and liabilities of defined
benefit pension schemes may exhibit significant period-on-
period volatility attributable primarily to changes in bond yields
and longevity. In addition to future service contributions, cash
contributions may be required to remediate past service deficits. A
sensitivity analysis of the change in these assumptions is provided in
note 23.
Expected credit losses
The Group applies the simplified approach permitted by IFRS
9 Financial Instruments to measure expected credit losses for
trade receivables, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
Further to the impact of COVID-19 on the Group, estimates have
been made around the credit losses expected to be incurred on the
Group’s financial assets – principally being trade receivables and
trade loans. In determining the expected credit losses, the loss rates
are determined based on the grouping of trade receivables sharing
the same credit risk characteristics and past due days.
Regarding advances to customers, the Group applies the general
approach to measure expected credit losses which requires a
loss provision to be recognised based on twelve month or lifetime
expected credit losses, provided a significant increase in credit risk
has occurred since initial recognition.
Please refer to note 15 for the impact of the expected credit loss
approach on the Group’s trade receivables and advances to
customers.
Provision for obsolete stock
As a result of COVID-19, the Group has provided for obsolete
inventory with respect to inventory which has no alternate use or
right of return to the supplier and/or where inventory has become
obsolete due to COVID-19 restrictions in the on-trade.
Please refer to note 14 for details in relation to the provision for
obsolete stock.
170 C&C Group plc Annual Report 2022
1. SEGMENTAL REPORTING
The Group’s business activity is the manufacturing, marketing and distribution of branded beer, cider, wine, spirits and soft drinks. Two
operating segments have been identified in the current financial year; Ireland and Great Britain. In FY2021, the Group reported under four
segments (Ireland, GB, MCB and International), however following a business review and organisational structure change in FY2022, this
has been reduced to two for FY2022. The Group has restated the operating segment information for the year ended 28 February 2021 to
conform with the current year presentation.
The Group continually reviews and updates the manner in which it monitors and controls its financial operations resulting in changes in
which information is classified and reported to the Chief Operating Decision Maker (“CODM”). The CODM, identified as the Executive
Directors, assesses and monitors the operating results of segments separately via internal management reports in order to effectively
manage the business and allocate resources.
The identified business segments are as follows:
(i) Ireland
This segment includes the financial results from sale of the Group’s own branded products across the island of Ireland, principally Bulmers,
Magners, Tennent’s, Five Lamps, Clonmel 1650, Heverlee, Dowd’s Lane, Seven Summits hard seltzer, Roundstone Irish Ale, Linden Village,
Finches and Tipperary Water. The Group also operates the Bulmers Ireland drinks distribution business, a leading distributor of third party
drinks to the licenced on and off-trade in Ireland. The Group distributes San Miguel, Tsingtao and Budweiser Brewing Group beer brands
across the island of Ireland. Since July 2020, the Group has also distributed the Budweiser brand on an exclusive basis. Our primary
manufacturing plant is located in Clonmel, Co. Tipperary, with major distribution and administration centres in Dublin and Culcavy, Northern
Ireland.
(ii) Great Britain (GB)
This segment includes the financial results from sale of the Group’s own branded products in Scotland, with Tennent’s, Caledonia Best,
Heverlee and Magners the main brands. This division includes the sale of the Group’s portfolio of owned cider brands across the rest
of GB, including Magners, Orchard Pig, K Cider and Blackthorn which are distributed in partnership with Budweiser Brewing Group. In
addition, the division includes the Tennent’s drinks distribution business in Scotland. The Group also distributes selected Budweiser Brewing
Group brands in Scotland and the Tsingtao and Menabrea international beer brands across the UK. Our primary manufacturing plant and
administration centre is located at the Wellpark Brewery in Glasgow.
In addition, this segment includes the financial results from the Matthew Clark and Bibendum distribution businesses. Matthew Clark is the
largest independent distributor to the UK on-trade drinks sector. It offers an unrivalled range of products, including beers, wines, spirits,
cider and soft drinks. Matthew Clark and Bibendum also have a number of exclusive distribution agreements for third party products (mainly
wines but also including spirits) into the UK market and also has a limited range of own brand wines. Bibendum is one of the largest wine,
spirits and craft beer distributors and wholesalers to the UK on-trade and off-trade, with a particular focus on wine.
Together the Tennent’s, Matthew Clark and Bibendum distribution businesses operate a nationwide distribution network serving the
independent free trade and national accounts.
Further, this segment includes the financial results from the sale and distribution of the Group’s own branded products, principally Magners
and Tennent’s outside of the UK and Ireland. The Group exports to over 40 countries globally, notably in continental Europe, Asia and
Australia. The Group operates mainly through local distributors in these markets and regions.
This segment also includes the sale of the Group’s cider and beer products in the US and Canada. In April 2021, the business divested our
wholly-owned US subsidiary, Vermont Hard Cider Company and its Woodchuck suite of brands.
The Group’s analysis by segment includes both items directly attributable to a segment and those, including central overheads, which are
allocated on a reasonable basis in presenting information to the CODM.
Inter-segmental revenue is not material and thus not subject to separate disclosure.
Notes forming part of the financial statements
Corporate
Governance
Business
& Strategy
Financial
Statements
171
Notes forming part of the financial statements
(continued)
(a) Analysis by reporting segment
2022 2021*
Revenue Net revenue Operating profit Revenue Net revenue Operating loss
€m €m €m €m €m €m
Ireland 338.3 224.3 16.7 269.8 16 6.1 (4.9)
Great Britain 1,457.8 1,213.8 31.2 753.0 570.8 (54.7)
Total before exceptional items 1,796.1 1,438.1 47.9 1,022.8 736.9 (59.6)
Exceptional items (note 5) - - 10.6 - - (25.2)
Group operating profit/(loss) 1,796.1 1,438.1 58.5 1,022.8 736.9 (84.8)
Profit on disposal (note 5) 4.5 5.8
Finance income (note 6) 0.2 -
Finance expense (note 6) (16.1) (19.5)
Finance expense exceptional items (note 5) (6.7) (7.9 )
Share of equity accounted investments’ profit/
(loss) before exceptional items (note 13) 2.6 (6.1)
Share of equity accounted investments’
exceptional items (note 5) 2.7 (8.8)
Profit/(loss) before tax 45.7 (121.3)
* The Group has restated the operating segment information for the year ended 28 February 2021 to conform with the current year presentation.
The exceptional items in the current financial year are a €10.6m credit, of which €9.2m relates to Ireland and €1.4m relates to Great Britain.
Of the exceptional items in the prior financial year charge of €25.2m, €8.3m loss related to Ireland and a €16.9m loss related to Great Britain.
Profit on disposal of €4.5m in the current financial year relates to Great Britain. Profit on disposal of €5.8m in the prior financial year related to
Ireland.
The share of equity accounted investments’ profit after tax before exceptional items of €2.6m (FY2021: €6.1m loss) relates to Great Britain.
The share of equity accounted investments’ exceptional items of €2.7m (FY2021: €8.8m loss) relates to Great Britain.
Total assets for the year ended 28 February 2022 amounted to €1,468.7m (FY2021: €1,335.6m).
(b) Other operating segment information
2022 2021*
Tangible and
intangible
expenditure
Lease additions
Depreciation
/amortisation /
impairment /
revaluation
Tangible and
intangible
expenditure
Lease additions
Depreciation /
amortisation /
impairment/
revaluation
€m
€m
€m €m
€m
€m
Ireland 7.3 4.1 6.2 1.9 0.9 6.1
Great Britain 5.9 19.0 25.6 12.2 11.0 26.2
Total 13.2 23.1 31.8 14.1 11.9 32.3
* The Group has restated the operating segment information for the year ended 28 February 2021 to conform with the current year presentation.
1. SEGMENTAL REPORTING (continued)
172 C&C Group plc Annual Report 2022
(c) Geographical analysis of revenue and net revenue
Revenue Net revenue
2022 2021 2022 2021
€m €m €m €m
Ireland 338.3 269.8 224.3 16 6.1
Great Britain 1,439.0 726.1 1,195.1 544.6
International* 18.8 26.9 18.7 26.2
Total 1,796.1 1,022.8 1,438.1 736.9
* International as a geographic region consists of multiple countries that in aggregate represent 1% of Group revenue.
The geographical analysis of revenue and net revenue is based on the location of the third party customers.
(d) Geographical analysis of non-current assets
Ireland Great Britain International Total
€m €m €m €m
28 February 2022
Property, plant & equipment 73.4 135.9 4.7 214.0
Goodwill & intangible assets 157. 6 473.7 25.2 656.5
Equity accounted investments/financial assets 0.4 0.7 0.2 1.3
Total 231.4 610.3 30.1 871.8
Ireland Great Britain International Total
€m €m €m €m
28 February 2021
Property, plant & equipment 68.5 130.2 5.3 204.0
Goodwill & intangible assets 15 8.1 462.7 25.2 646.0
Equity accounted investments/financial assets 0.4 62.5 0.2 63.1
Total 227.0 655.4 30.7 913.1
The geographical analysis of non-current assets, with the exception of goodwill & intangible assets, is based on the geographical location of
the assets. The geographical analysis of goodwill & intangible assets is allocated based on the country of destination of sales at the date of
acquisition.
(e) Disaggregated net revenue
In the following table, net revenue is disaggregated by principal activities and products. Principal activities and products is the primary
basis on which management reviews its businesses across the Group. To aid in more useful analysis of the Group’s business performance,
the Group has introduced Branded and Distribution for the year ended 28 February 2022 to better reflect how the business is managed
commercially and the distinct revenue sources which drive its performance as a brand-led distributor in the UK and Ireland.
Principal activities and products 2022
Net revenue Ireland Great Britain Tota l
€m €m €m
Branded* 78.3 170.1 248.4
Distribution**
139.8 1,005.5
1,145.3
Co pack/Other 6.2 38.2 44.4
Total Group from continuing operations 224.3 1,213.8 1,438.1
* Branded defined as being brands either fully owned by C&C or sold by C&C as part of a long-term distribution deal, whereby C&C are responsible for the marketing as well as
sale of the brand in the associated geography.
** Distribution defined as third-party brands sold through our distribution businesses and brands where C&C act as an exclusive agent for a brand in a specific geography.
1. SEGMENTAL REPORTING (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
173
Notes forming part of the financial statements
(continued)
Principal activities and products 2021***
Net revenue Ireland Great Britain Total
€m €m €m
Branded* 48.6 133.4 182.0
Distribution** 114.0 394.2 508.2
Co pack/Other 3.5 43.2 46.7
Total Group from continuing operations 16 6.1 570.8 736.9
* Branded defined as being brands either fully owned by C&C or sold by C&C as part of a long-term distribution deal, whereby C&C are responsible for the marketing as well as
sale of the brand in the associated geography.
** Distribution defined as third-party brands sold through our distribution businesses and brands where C&C act as an exclusive agent for a brand in a specific geography.
*** The Group has restated the disaggregated net revenue information for the year ended 28 February 2021 to conform with the current year presentation.
2. OPERATING COSTS
2022 2021
Before
exceptional
items
Exceptional
items
(note 5) Total
Before
exceptional
items
Exceptional
items
(note 5) Total
€m €m €m €m €m €m
Raw material cost of goods sold/bought in finished
goods 1,108.9 - 1,108.9 562.1 - 562.1
Inventory write-down/(recovered) (note 14) 1.1 (4.1) (3.0) 0.9 5.8 6.7
Employee remuneration (note 3) 125.5 0.6 126.1 101.6 6.8 108.4
Direct brand marketing 17.7 - 17.7 13.5 - 13.5
Other operating, selling and administration costs 102.4 (11.1) 91.3 86.6 2.7 89.3
Foreign exchange 0.5 - 0.5 (0.6) - (0.6)
Depreciation (note 11) (note 19) 29.2 - 29.2 28.2 - 28.2
Amortisation (note 12) 2.6 - 2.6 2.6 - 2.6
Net (profit)/loss on disposal of property, plant &
equipment 0.2 (1.8) (1.6) 0.3 (0.7) (0.4)
Auditor’s remuneration (a) 1.5 - 1.5 1.3 - 1.3
Impairment of intangible assets (note 12) 0.6 - 0.6 - 0.3 0.3
Impairment of equity accounted investment (note 13) - 6.4 6.4 - 9.1 9.1
Net (revaluation)/impairment of property, plant &
machinery (note 11) - (0.6) (0.6) - 1.2 1.2
Total operating expenses 1,390.2 (10.6) 1,379.6 796.5 25.2 821.7
(a) Auditor’s remuneration: The remuneration of the Group’s statutory auditor, being the Irish firm of the principal auditor of the Group, Ernst &
Young, Chartered Accountants is as follows:
EY Ireland 2022
Other EY Offices
2022 Total 2022 EY Ireland 2021
Other EY Offices
2021 Total 2021
€m €m €m €m €m €m
Audit of the Group financial statements 0.4 -
0.4 0.5
- 0.5
Audit of subsidiaries 0.4 0.3
0.7 0.4
0.4 0.8
Non-audit services
0.4 - 0.4 -
- -
Total
1.2 0.3 1.5 0.9
0.4 1.3
The audit fee for the audit of the financial statements of the Company was less than €0.1m in the current and prior financial year. There were
€0.4m of non-audit fees paid to Ernst & Young during the current financial year (FY2021: €nil) in respect of services in connection with the
Rights Issue.
1. SEGMENTAL REPORTING (continued)
174 C&C Group plc Annual Report 2022
(b) Cyber security expenses: On 19 April 2021, the Group announced that it had experienced a cyber security incident within its Matthew
Clark and Bibendum (MCB) operations. In response, certain IT systems and applications used in those business units were pro-actively shut
down and were securely restored over the course of a number of weeks. By the end of May 2021, MCB was again using their IT systems
and applications. The cyber security incident affected MCB only, with other Group business and production sites unaffected throughout the
period.
The Group incurred €2.6m of costs in FY2022 as a direct result of the cyber security incident in April. These costs primarily related to
specialist advisory fees incurred to investigate and respond to the incident (€1.1m) and subsequent improvements and additional protection
tools to enhance the security of the IT systems (€1.5m). Following the incident affecting Matthew Clark and Bibendum IT systems in
April 2021, the Group has reviewed its information security and cyber preparedness policies and procedures, enhanced its Information
Technology systems and controls, including the appointment of a Technology and Transformation Director and Group Head of IT. As a
demonstration of the Group's commitment to tackling cyber security, it is currently pursuing Cyber Essentials Plus accreditation from the
National Cyber Security Centre (NCSC).
3. EMPLOYEE NUMBERS & REMUNERATION COSTS
The average number of persons employed by the Group (including Executive Directors) during the year, analysed by category, was as
follows:
2022 2021
Number Number
Sales & marketing 435 519
Production & distribution 1,454 1,536
Administration 852 895
Total 2,741 2,950
The actual number of persons employed by the Group as at 28 February 2022 was 2,822 (FY2021: 2,653).
The aggregate remuneration costs of these employees can be analysed as follows:
2022 2021
€m €m
Wages, salaries and other short-term employee benefits, net of government grants (a) 106.7 82.9
Restructuring costs (note 5) 0.6 6.8
Social welfare costs 10.3 10.7
Retirement benefits – defined benefit schemes (note 23) 0.7 0.9
Retirement benefits – defined contribution schemes, including pension related expenses 5.5 5.8
Equity settled share-based payments (note 4) 1.5 0.8
Other non-equity settled share-based payments and PRSI accrued with respect to share-based payments 0.8 0.5
Charged to the Income Statement 126.1 108.4
Actuarial gain on retirement benefits recognised in Other Comprehensive Income (note 23) (32.8) (13.4)
Total employee benefits 93.3 95.0
Directors’ remuneration
2022 2021
€m €m
Directors’ remuneration (note 28) 4.1 2.0
2. OPERATING COSTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
175
Notes forming part of the financial statements
(continued)
(a) Government grants and assistance
In the current financial year, wages and salaries amounting to €106.7m (FY2021: €82.9m) are stated net of wage subsidies received by the
Group from the Irish and UK governments. These wage subsidies are offset against the related wages and salaries expense over the period
in which they were incurred. During FY2022, the Group availed of wage subsidies of €1.7m from the Irish government and €2.9m (£2.5m)
from the UK government.
2022 2021
€m €m
Temporary Wage Subsidy Scheme (Ireland) - 1.3
Employment Wage Subsidy Scheme (Ireland) 1.7 2.9
Coronavirus Job Retention Scheme (UK) 2.9 21.9
Grants related to income 4.6 26.1
The Group has availed of the Irish and UK government schemes as a direct consequence of the COVID-19 pandemic. The Group has
availed of the Temporary Wage Subsidy Scheme from 1 April 2020 to 31 August 2020 and the Employment Wage Subsidy Scheme from
1 September 2020 to 7 June 2021 in Ireland and the Coronavirus Job Retention Scheme in the UK from 1 April 2020 to 14 July 2021. The
Group no longer avails of any wage subsidy schemes.
The Temporary Wage Subsidy Scheme was available to employers who lost a minimum of 25% of turnover as a result of the COVID-19
pandemic and who kept employees on their payroll during this time. The scheme was replaced by the Employment Wage Subsidy Scheme
from 1 September 2020 with similar conditions to the preceding scheme, but with a turnover decline of 30% required compared to a similar
period in FY2020.
In the UK, the Group availed of the Coronavirus Job Retention Scheme. Up to 30 June 2020, the scheme only applied to furloughed
employees and employees still working in the Group were not eligible. From 1 July 2020, the UK government introduced a flexible furlough
scheme where employees can work part time and an employer can claim subsidies which are passed on to employees for the hours not
worked. In order to be eligible for the scheme, employees must have been on at least a three week furlough period prior to 10 June 2020.
In the current financial year, the Group was in compliance with all the conditions of the respective schemes. The grant income received has
been offset against the related costs in operating costs in the Income Statement.
Government assistance
In addition, the Group received financial assistance by way of commercial rates waivers and deferrals of tax liabilities from the Irish and UK
governments.
In Ireland the Group benefitted from a commercial rates waiver of €0.3m in FY2022 (FY2021: €1.0m).
Under the warehousing of tax liabilities legislation introduced by the Financial Provisions (COVID-19) (No. 2) Bill 2020 and Finance Act 2020
(Act 26 of 2020), VAT liabilities of €11.0m (FY2021: €19.1m) and payroll tax liabilities of €3.2m (FY2021: €1.3m) relating to FY2022 have been
deferred. Payments made to the Irish tax authorities in respect of deferred tax liabilities during FY2022 totalled €14.5m for VAT and €2.1m for
payroll taxes. No comparable payments were made in FY2021.
At the end of FY2022, the deferred VAT liabilities totalled €15.6m (FY2021: €19.1m) and deferred payroll liabilities totalled €2.5m (FY2021:
€1.3m), mainly related to new FY2022 deferrals. It is envisaged that the deferred balances will be paid in full by September 2022, subject to
any unforeseen COVID-19 implications over this time.
In the UK, no additional tax liabilities were deferred during FY2022 (FY2021: €57.0m (£49.6m)). Payments made to the UK tax authorities in
respect of deferred tax liabilities during FY2022 totalled €32.7m (£27.9m) for VAT (FY2021: €nil (£nil)) and €15.0m (£12.8m) for Excise Duties
(FY2021: €40.3m (£36.1m)).
3. EMPLOYEE NUMBERS & REMUNERATION COSTS (continued)
176 C&C Group plc Annual Report 2022
VAT liabilities of €0.2m (£0.1m) were deferred at the end of FY2022 (FY2021: €32.2m). Excise duty liabilities of €10.5m (£8.8m) were deferred
at the end of FY2022 (FY2021: €24.8m), included in the Euro equivalent closing balances is a retranslation loss of €1.4m. Both the deferred
VAT liabilities and the deferred excise duties are mainly related to new FY2022 deferrals and will be repaid in FY2023.
4. SHARE-BASED PAYMENTS
Equity settled awards
The Group has an established equity settled Executive Share Option Scheme (“ESOS”) in place under which options to purchase shares
in C&C Group plc are granted to certain Executive Directors and members of management. Under the terms of the scheme, the options are
exercisable at the market price prevailing at the date of the grant of the option.
Options were granted in June 2017, November 2017 and May 2018 under this scheme. The vesting of these awards is based on compound
annual growth in underlying EPS over the three year performance period, commencing in the financial year when an award is granted. If
compound annual growth in underlying EPS over the performance period is 2% per annum, then 25% of the awards vest. If the compound
annual growth in underlying EPS over the performance period is 6% per annum then 100% of the awards vest. There is straight-line vesting
between both points and no reward for below threshold performance. Options granted in 2017 have achieved their performance conditions
and therefore vested in full. Options granted in 2018 did not meet their performance conditions in FY2021 and therefore were deemed to
have lapsed in the prior year.
The Group also has an established Long-Term Incentive Plan (“LTIP”) under the terms of which options to purchase shares in C&C Group
plc are granted at nominal cost to certain Executive Directors and members of management. All such awards granted from June 2017 to
December 2019 are subject to the following three performance conditions:
• 33% of the award is subject to compound annual growth in underlying EPS over the three year performance period. If compound annual
growth in underlying EPS over the performance period is 3% per annum then 25% of the awards vest. If the compound annual growth in
underlying EPS over the performance period is 8% per annum then 100% of the awards vest.
• 33% of the award is subject to the performance condition that the Free Cash Flow Conversion ratio (‘FCF’) of the Group (excluding the
impact of exceptional items) would be 65% conversion, on average, over the three year performance period, at which case 25% of this
element of the award would vest. If the FCF is 75% on average, then 100% of this element of the award would vest.
• 33% of the award is subject to a Return on Capital Employed (“ROCE”) target. If the ROCE is 9.3% then 25% of this element of the award
would vest. If the ROCE is 10% then 100% of this element of the award would vest.
In all three components of the performance conditions of the LTIP there is straight-line vesting between both points and no reward for below
threshold performance. Options granted in 2017 have achieved their performance conditions and therefore vested in full. The performance
conditions for options granted in May 2018, February 2019, May 2019 and December 2019 were deemed to be no longer capable of
achieving their performance conditions and were therefore deemed to have lapsed in the prior year.
The vesting of LTIP awards granted in December 2020 will be subject to an assessment of the Group’s underlying financial performance
across the three-year period FY2021 – FY2023. Each award will also be subject to the following three separate performance conditions:
• 30% of the award was subject to FY2021 liquidity, which was defined as the Group’s cash on hand plus availability from the Group’s
Revolving Credit Facility as at 28 February 2021. If liquidity was €250.0m, 25% of this element of the award would have vested and if
liquidity was €300.0m, 100% of this element of the award would have vested. This condition was achieved in full in relation to FY2021
liquidity.
• 35% of the award is subject to FY2022 Net Debt to FY2022 EBITDA ratio, with a minimum threshold of 4.1 and a maximum threshold of
3.8 required. This condition was achieved in full in relation to FY2022 Net Debt to FY2022 EBITDA ratio.
• 35% of the award is subject to FY2023 financial measures. The details of these measures will be determined by the Board by no later than
the start of the FY2023 performance period. The targets will be disclosed in the Group’s FY2023 Annual Report.
Threshold vesting in respect of any year will be no more than 25%, but subject to the overriding three-year financial performance
assessment. No award will vest until the end of the full three year performance period, and Executive Directors’ awards will then be subject
to a further two-year holding period.
3. EMPLOYEE NUMBERS & REMUNERATION COSTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
177
Notes forming part of the financial statements
(continued)
The vesting of LTIP awards granted in June 2021 will be subject to the following performance conditions assessed across the three-year
performance period FY2022 - FY2024. In each case, threshold vesting will be 25% of the maximum.
• 45% of the award is subject to certain EPS targets being met, with a minimum threshold set of 22c and a maximum of 27c. This is to be
achieved by the end of the year 3 target range (end of FY2024) rather than as a cumulative target.
• 35% of the award is subject to the performance condition that the Free Cash Flow Conversion ratio (‘FCF’) of the Group (excluding the
impact of exceptional items) would be a minimum threshold of 65% conversion and a maximum threshold of 75% by the end of the year 3
target range (end of FY2024) rather than as a cumulative target.
• 20% of the award is subject to the performance condition that certain environmental targets are met. To give impetus to the Group's de-
carbonisation efforts, a target has been set to reduce its Scope 1 emissions (being direct emissions from owned or controlled sources,
which includes emissions from company-owned or operated facilities and vehicles) and Scope 2 emissions (being indirect emissions from
the generation of purchased energy e.g. electricity, steam, heat and cooling) over the three financial years ending with FY2024, with a
threshold of a 6% reduction set and a maximum of a 12% reduction.
Following the appointment of David Forde as Group Chief Executive Officer, the Group made an award of 842,636 shares to David
on 3 November 2020 (“Buy-Out Awards”). These shares were to compensate David for remuneration which he forfeited from his
previous employment upon joining the Group. Reflecting the fact that the forfeited remuneration bought out was guaranteed cash-based
remuneration, the closing share price on the day before the date of grant was used to calculate the number of shares to ensure the value
was equal to the remuneration forfeited. The award will vest in respect of 50% of the shares in November 2022 (“Buy-Out 1”) and 50% of
the shares in November 2023 (“Buy-Out 2”). After sales of shares to cover tax, David Forde will be required to retain 50% of the shares
acquired in satisfaction of the Group’s Executive Director shareholding requirement.
In June 2010, the Group established a Recruitment and Retention Plan (“R&R”) under the terms of which options to purchase shares in
C&C Group plc at nominal cost are granted to certain members of management, excluding Executive Directors.
The performance conditions and/or other terms and conditions for awards granted under this plan are specifically approved by the Board of
Directors at the time of each individual award, following a recommendation by the Remuneration Committee. Performance conditions vary
per award but include, some or all, of the following conditions; continuous employment, performance targets linked to the business unit to
which the recipient is aligned or a requirement to have a personal shareholding in the Company at the end of the performance period.
Obligations arising under the Recruitment and Retention Plan will be satisfied by the purchase of existing shares on the open market. Upon
settlement, any difference between the amount included in the share-based payment reserve account and the cash paid to purchase the
shares is recognised in retained income via the Statement of Changes in Equity.
The Group also has a Deferred Bonus Plan (“DBP”) under the terms of which options to purchase shares in C&C Group plc at nominal
cost are granted to certain members of management. Awards under this plan are subject to a continuous employment performance
condition only.
In November 2011, the Group set up Partnership and Matching Share Schemes for all ROI and UK based employees of the Group
under the approved profit sharing schemes referred to below. Under these schemes, employees can invest in shares in C&C Group plc
(partnership shares) that will be matched on a 1:1 basis by the Company (matching shares) subject to Revenue approved limits. Both the
partnership and matching shares are held on behalf of the employee by the Scheme trustee, Link Group Limited. The shares are purchased
on the open market on a monthly basis at the market price prevailing at the date of purchase with any remaining cash amounts carried
forward and used in the next share purchase. The shares are held in trust for the participating employee, who has full voting rights and
dividend entitlements on both partnership and matching shares. Matching shares may be forfeited and/or tax penalties may apply if the
employee leaves the Group or removes their partnership shares within the Revenue-stipulated vesting period. The Revenue stipulated
vesting period for matching shares awarded under the ROI scheme is three years and under the UK scheme is up to five years.
The Group held 696,476 matching shares (1,392,646 partnership and matching) in trust at 28 February 2022 (FY2021: 564,152 matching
shares (1,128,304 partnership and matching shares held)).
4. SHARE-BASED PAYMENTS (continued)
178 C&C Group plc Annual Report 2022
In FY2020 the Group, recognising that some employees of Matthew Clark and Bibendum (“MCB”), which the Group acquired in FY2019,
had previously lost money in a share scheme operated by the previous owners of MCB and prior to MCB being acquired by the Group,
committed to allocating to those employees, C&C Group plc shares in May 2021, equivalent in value to the amount they had lost in the share
scheme of the previous owners of MCB. The employees must also be investing in the Group’s partnership and matching share scheme
to qualify for the award. In the current financial year, these awards were granted with immediate vesting to participants who were still
employees of the Group on the date of grant.
Award valuation
The fair values assigned to the equity settled awards granted were computed in accordance with a Black Scholes valuation methodology.
As per IFRS 2 Share-based Payment, non-market or performance related conditions were not taken into account in establishing the fair
value of equity instruments granted, instead these non-market vesting conditions are taken into account by adjusting the number of equity
instruments included in the measurement of the transaction amount so that, ultimately the amount recognised for time and services received
as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest, unless the failure to
vest is due to failure to meet a market condition.
The main assumptions used in the valuations for equity settled share-based payment awards granted in the current and prior financial years
were as follows:
LTIP options
granted
Jun 21
LTIP options
granted
Dec 20
Buy-Out
1 options
granted
Nov 20
Buy-Out
2 options
granted
Nov 20
R&R
options
granted
Jun 21
R&R
options granted
May 21
R&R
options
granted
Nov 20
R&R
options
granted
Oct 20
DBP options
granted
Oct 20
Fair value at date of grant €2.70 €2.47* €1.51* €1.51* €2.70 €2.90 €1.51* €1.85* €1.85*
Exercise price - - - - - - - - -
Risk free interest rate 0.16% - - - 0.02% - - - -
Expected volatility 38.9% 36.8% 38.3% 34.6% 44.7% n/a 41.0% 37.8% 37. 8%
Expected term until exercise
–years 3 3 2 3 1 Immediate 1.5 2 2
Dividend yield - - - - - - - - -
* The Group completed a successful Rights Issue in June 2021 at a discounted price of £1.86. The number of options/equity Interests granted and the fair value at date of grant
were rebased following the Rights Issue.
Expected volatility is calculated by reference to historic share price movements prior to the date of grant over a period of time commensurate
with the expected term until exercise. The dividends which would be paid on a share reduces the fair value of an award since, in not owning
the underlying shares, a recipient does not receive the dividend income on these shares. Due to the Group not paying dividends in the
current financial year dividend yield has been set to zero. For LTIP, DBP and the Buy-Out awards, the participants are entitled to receive
dividends, and therefore the dividend yield has been set to zero to reflect this.
4. SHARE-BASED PAYMENTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
179
Notes forming part of the financial statements
(continued)
Details of the share entitlements and share options granted under these schemes together with the share option expense are as follows:
Grant date Vesting period
Number of
options/ equity
Interests
granted*
Number
deemed
outstanding
at 28 February
2022**
Grant
price
Market
value at
date
of grant
Fair value at
date of grant*
Expense
/ (income)
in Income
Statement
2022
Expense
/ (income)
in Income
Statement
2021
€ € € €m €m
Executive Share Option Scheme
1 June 2017 3 years 840,568 156,699 3.40 3.364 0.307 - -
13 November 2017 3 years 24 6,211 - 2.93 2.880 0.219 - -
31 May 2018 3 years 939,466 - 2.99 2.99 0.255 - (0.1)
Long-Term Incentive Plan
1 August 2017 3 years 500,534 93,522 - 3.069 2.876 - 0.1
13 November 2017 3 years 164,140 - - 2.880 2.880 - 0.1
31 May 2018 3 years 626,311 - - 2.990 2.990 - (0.6)
11 February 2019 3 years 478,343 - - 3.05 3.05 - (0.4)
23 May 2019 3 years 605,249 - - 3.71 3.71 - (0.3)
12 December 2019 3 years 293,961 - - 4.66 4.66 - (0.1)
2 December 2020 3 years 824,888 824,888 - 2.54 2.47 0.7 0.2
15 June 2021 3 years 812,921 812,921 - 2.74 2.70 0.5 -
Buy-Out Award
3 November 2020 2-3 years 899,254 899,254 - 1.685 1.51 0.6 0.2
Recruitment & Retention Plan
30 October 2015 2 years 490,871 7,6 89 - 3.60 3.20 - -
12 May 2016 1.5-2.5 years 194,003 - - 4.041 3.54 - -
1 August 2017 1.8 years 65,585 17,75 0 - 2.8172 2.64 - -
11 February 2019 2-3 years 477, 0 81 6,008 - 3.05 2.47 – 2.77 (0.7) 0.4
12 December 2019 2.5 years 476,052 204,255 - 4.66 4.00 (0.2) 0.8
18 February 2020 2 years 6 0,171 6 0,171 - 4.52 3.91 0.1 0.1
22 October 2020 2 years 17, 8 26 17, 8 2 6 - 1.98 1.85 - -
3 November 2020 1.5 years 149,041 149,041 - 1.61 1.51 0.2 0.1
27 May 2021**** Immediate 196,963 139,255 - 2.93 2.90 - 0.3
15 June 2021 1 year 170,230 170,230 - 2.74 2.70 0.3 -
Deferred Bonus Plan
11 February 2019 2 years 14,420 - - 3.05 2.88 - -
22 October 2020 2 years 17, 8 26 17, 8 2 6 - 1.98 1.85 - -
9,561,915 3,577,335 1.5 0.8
Partnership and Matching Share Schemes 1,392,646*** 0.7 0.7
* The Group completed a successful Rights Issue in June 2021 at a discounted price of £1.86. The number of options/equity Interests granted and the fair value at date of grant
were rebased following the Rights Issue.
** Excludes awards that are deemed to be not capable of achieving their performance conditions as at 28 February 2022.
*** Includes both partnership and matching shares.
**** Previously named ‘MCB compensation awards’.
The amount charged to the Income Statement includes a credit of €0.9m (FY2021: €1.5m), being the reversal of previously expensed
charges on equity settled option schemes where the non-market performance conditions were deemed no longer capable of being
achieved or the employee has left the Group.
4. SHARE-BASED PAYMENTS (continued)
180 C&C Group plc Annual Report 2022
A summary of activity under the Group’s equity settled share option schemes with the weighted average exercise price of the share options
is as follows:
2022 2021
Number of
options/ equity
Interests
Weighted average
exercise price
Number of
options/ equity
Interests
Weighted average
exercise price
€ €
Outstanding at beginning of year 3,160,858 0.30 4,788,136 1.00
Granted 1,380,647* - 1,788,653 -
Exercised (265,749) 1.61 (1,002,587) 0.29
Forfeited/lapsed (698,421) - (2,413,344) 1.47
Outstanding at end of year 3,577,335 0.15 3,16 0,858 0.30
* The granted value of shares includes the shares allotted in FY2022 as a result of the number of options/equity Interests granted and the fair value at date of grant being rebased
following the Rights Issue.
The aggregate number of share options/equity Interests exercisable at 28 February 2022 was 420,923 (FY2021: 469,977).
The unvested share options/equity Interests (excluding those awards which are not deemed capable of vesting) outstanding at 28 February
2022 have a weighted average vesting period outstanding of 1.4 years (FY2021: 1.9 years). The weighted average contractual life outstanding
of vested and unvested share options/equity Interests (excluding those which are not deemed capable of vesting) is 5.9 years (FY2021: 6.6
years).
The weighted average market share price at date of exercise of all share options/equity Interests exercised during the year was £2.55 or
€2.97 euro equivalent (FY2021: €2.48); the average share price for the year was £2.45 or €2.87 euro equivalent (FY2021: €2.41); and the
market share price as at 28 February 2022 was £2.11 or €2.52 euro equivalent (28 February 2021: £2.58 or €2.96 euro equivalent).
5. EXCEPTIONAL ITEMS
2022 2021
€m €m
COVID-19 (a) 17. 5 (4.6)
Restructuring costs (b) 1.2 (8.1)
Impairment of equity accounted investment (c) (6.4) (9.1)
Reversal of impairment/(impairment) of property, plant & equipment (d) 0.6 (1.2)
Rights Issue costs (e) (2.6) -
Other (f) 0.3 (2.2)
Operating profit/(loss) exceptional items 10.6 (25.2)
Profit on disposal (g) 4.5 5.8
Finance income (h) 0.2 -
Finance expense (i) (6.7) (7. 9 )
Share of equity accounted investments’ exceptional items (c) 2.7 (8.8)
Included in profit/(loss) before tax 11.3 (36.1)
Income tax (charge)/credit (j) (2.4) 2.4
Included in profit/(loss) after tax 8.9 (33.7)
4. SHARE-BASED PAYMENTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
181
Notes forming part of the financial statements
(continued)
(a) COVID-19
The Group has continued to account for the ongoing COVID-19 pandemic as an exceptional item and has realised an exceptional credit of
€17.5m from operating activities at 28 February 2022 (FY2021: charge of €4.6m). The Group reviewed the recoverability of its debtor book
and advances to customers and booked a credit of €7.9m with respect to its provision against trade debtors (FY2021: €6.1m) and a credit of
€5.5m with respect to its provision for advances to customers (FY2021: charge of €1.2m). The Group also realised an exceptional credit of
€4.1m with respect to inventory (FY2021: charge of €5.8m), this related to inventory that had previously been deemed at risk of obsolescence
in FY2021, all as a consequence of the COVID-19 restrictions.
In the prior financial year, the Group also incurred costs of €1.7m with respect to a provision for lost kegs, €0.3m with respect to the write
off of an IT intangible asset where the project was not completed due to COVID-19 and a net credit of €0.6m with respect to the release of a
trade provision. Other costs of €2.3m were incurred, which included site improvement costs, impairment of brand dispense equipment and
an excess holiday accrual all directly linked to the pandemic.
(b) Restructuring costs
A credit of €1.2m relating to restructuring costs was incurred in the current financial year. This included severance costs of €0.6m, all of
which arose as a consequence of the optimisation of the delivery networks in England and Scotland. In addition, the Group realised a credit
of €1.8m in relation to the profit on disposal of a property, as a direct consequence of the optimisation project.
Restructuring costs of €8.1m were incurred in the prior financial year. These included severance costs of €6.8m, of which €4.9m was
incurred with respect to the restructuring of the Group as a consequence of the COVID-19 pandemic and €1.9m arose as a consequence
of the optimisation of the delivery networks in England and Scotland. The Group also incurred additional costs of €2.0m with respect to the
optimisation of the delivery networks in England and Scotland which was offset by a credit of €0.7m relating to the profit on disposal of a
property as a direct consequence of the optimisation project.
(c) Equity accounted investments’ exceptional items
On 17 May 2022, the Group announced the sale of its joint venture investment in Admiral Taverns, to Proprium Capital Partners for a total
consideration of €65.8m (£55.0m). The sale of the shares will be completed and the consideration will be paid in three tranches during
FY2023, subject only to FCA approval. Admiral Taverns was classified as an asset held for sale as at 24 February 2022.
The net impact of exceptional items in relation to Admiral is a charge of €3.7m (FY2021: €17.7m). The Group continued to equity account
for this investment up until this date, with the Group recognising a credit of €2.7m with respect to its share of Admiral Taverns’ exceptional
items (FY2021: €8.8m charge). This included a credit of €4.1m with respect to the Group’s share of the revaluation gain arising from the fair
value exercise to value Admiral’s property assets (FY2021: €7.0m loss). The Group also recognised an exceptional charge of €1.4m (FY2021:
€1.8m) in relation to its share of other exceptional items for the year, including the Group’s share of acquisition costs of €1.4m incurred with
respect to Admiral Taverns’ acquisition of Hawthorn. The Group also recognised its share of other exceptional items for the year of €0.5m,
primarily relating to restructuring costs. This was offset by a release from the expected loss provision with respect to the recoverability of
Admiral Taverns’ debtor book as a consequence of COVID-19 of €0.5m.
As a result of the same property valuation exercise, a gain of €2.2m with respect to the Group’s share of the revaluation was recognised in
Other Comprehensive Income (FY2021: €0.4m loss).
5. EXCEPTIONAL ITEMS (continued)
182 C&C Group plc Annual Report 2022
Also in the current financial year, the Group assessed the carrying value of its equity accounted investment as a result of its classification
as an asset held for sale as at 24 February 2022 and recognised an impairment charge of €6.4m (FY2021: €8.9m). This impairment charge
reverses previously accumulated gains and losses in relation to the application of equity accounting for the Admiral Taverns investment, to
reflect the recoverable value of the Group’s investment in line with the agreed consideration of £55.0m (€65.9m at date of classification as
held for sale, €65.8m at year-end rate).
In the prior financial year, the Group also recorded an impairment charge of €0.2m with respect to the carrying value of its investment in
Drygate Brewing Company Limited.
(d) Reversal of impairment of property, plant & equipment
Property (comprising freehold land & buildings) and plant & machinery are valued at fair value on the Consolidated Balance Sheet and
reviewed for impairment on an annual basis. During the current financial year, as outlined in detail in note 11, the Group engaged external
valuers to value the freehold land & buildings and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow) and Portugal
sites. Using the valuation methodologies, this resulted in a net revaluation gain of €0.6m (FY2021: €1.2m net loss) accounted for in the
Consolidated Income Statement and a gain of €2.5m (FY2021: €0.9m) accounted for within Other Comprehensive Income.
(e) Rights Issue costs
The Group completed a successful Rights Issue in June 2021 issuing 81,287,315 New Ordinary Shares at 186 pence per New Ordinary
Share, raising gross proceeds of £151.2m (€176.3m). Attributable costs of €9.2m were incurred, of which €6.6m was debited directly to
Equity and €2.6m was recorded as an exceptional charge in the Group’s Condensed Consolidated Income Statement.
(f) Other
During the current financial year €0.3m was released against a provision for legal disputes (FY2021: €2.2m charge).
(g) Profit on disposal
During the current financial year, as outlined in further detail in note 10, the Group completed the sale of its wholly owned US subsidiary,
Vermont Hard Cider Company to Northeast Kingdom Drinks Group, LLC on the 2 April 2021 for a total consideration of €17.5m (USD 20.5m)
(comprised of cash proceeds of €13.4m (€12.9m net cash impact on disposal) and promissory notes of €4.1m at the date of transaction),
realising a profit of €4.5m on disposal.
During the prior financial year, the Group disposed of its Tipperary Water Cooler business for an initial consideration of €7.4m, realising a
profit of €5.8m on disposal.
(h) Finance income
The Group earned finance income of €0.2m (FY2021: €nil) relating to promissory notes issued as part of the disposal of the Group’s
subsidiary Vermont Hard Cider Company.
(i) Finance expense
The Group incurred costs of €6.7m (FY2021: €7.9m) during the current financial year directly associated with continued covenant waivers
including waiver fees, increased margins payable and other professional fees associated with covenant waivers, negotiated in the prior year
due to the impact of COVID-19.
(j) Income tax (charge)/credit
The tax charge in the current financial year, with respect to exceptional items amounted to €2.4m (FY2021: €2.4m credit).
5. EXCEPTIONAL ITEMS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
183
Notes forming part of the financial statements
(continued)
6. FINANCE INCOME AND EXPENSE
2022 2021
€m €m
Recognised in Income Statement
Finance expense:
Interest expense (9.4) (13.1)
Other finance expense (3.4) (2.9)
Interest on lease liabilities (3.3) (3.5)
Total finance expense (16.1) (19.5)
Exceptional finance expense:
Interest expense (6.7) ( 7.9 )
Total exceptional finance expense (6.7) ( 7.9)
Exceptional finance income:
Interest income 0.2 -
Total exceptional finance income 0.2 -
Net finance expense (22.6) (27.4)
2022 2021
€m €m
Recognised directly in Other Comprehensive Income
Foreign currency translation differences arising on the net investment in foreign operations 11.9 (17.4)
Foreign currency recycled on disposal of subsidiary (0.2) -
Net income/(expense) recognised directly in Other Comprehensive Income 11.7 (17.4 )
184 C&C Group plc Annual Report 2022
7. INCOME TAX
(a) Analysis of expense/(credit) in year recognised in the Income Statement
2022 2021
€m €m
Current tax:
Irish corporation tax 2.3 2.3
Foreign corporation tax 2.0 (4.0)
Adjustment in respect of previous years (1.4) (2.0)
2.9 (3.7)
Deferred tax:
Irish 0.5 0.6
Foreign 2.2 (14.2)
Adjustment in respect of previous years 3.1 0.2
Rate change impact (0.1) 0.3
5.7 (13.1)
Total income tax expense/(credit) recognised in Income Statement 8.6 (16.8)
Relating to continuing operations
– continuing operations before exceptional items 6.2 (14.4)
– continuing operations exceptional items 2.4 (2.4)
Total 8.6 (16.8)
The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the Republic of Ireland, as explained
below:
2022 2021
€m €m
Profit/(loss) before tax 45.7 (121.3)
Less: Group’s share of equity accounted investments’ (profit)/loss after tax (5.3) 14.9
Adjusted profit/(loss) before tax 40.4 (106.4)
Tax at standard rate of corporation tax in the Republic of Ireland of 12.5% 5.1 (13.3)
Actual tax expense/(credit) is affected by the following:
Expenses/(non-taxable income) not deductible for tax purposes 1.7 (4.8)
Adjustments in respect of prior years 1.7 (1.8)
Income taxed at rates other than the standard rate of tax 5.8 (4.1)
Group relief (received)/surrendered (4.4) 0.5
Other 0.2 -
(Recognition)/non-recognition of deferred tax assets (1.5) 6.7
Total income tax expense/(credit) 8.6 (16.8)
Corporate
Governance
Business
& Strategy
Financial
Statements
185
Notes forming part of the financial statements
(continued)
(b) Deferred tax recognised directly in Other Comprehensive Income
2022 2021
€m €m
Deferred tax arising on revaluation of property, plant & machinery reflected in revaluation reserve 0.6 0.2
Deferred tax arising on movement of retirement benefits 4.3 1.6
Total deferred tax charge 4.9 1.8
(c) Factors that may affect future charges
Future income tax charges may be impacted by changes to the corporation tax rates and/or changes to corporation tax legislation in force
in the jurisdictions in which the Group operates. Under Finance Act 2021, the current UK corporation tax of 19% will increase to 25% from
1 April 2023. It is expected that Ireland will enact a minimum corporation tax rate of 15%, for groups with annual consolidated revenue in
excess of €750m, towards the end of 2022 or the start of 2023. The Group is actively monitoring these developments.
8. DIVIDENDS
2022 2021
€m €m
Dividends charged to Income Statement:
Final: €nil dividend paid (FY2021: €nil dividend paid) - -
Interim: €nil dividend paid (FY2021: €nil dividend paid) - -
Credit with respect to share-based payments dividend entitlements - (0.2)
Total equity dividends - (0.2)
Settled as follows:
Paid in cash - -
Scrip dividend - -
(Credit)/charge with respect to share-based payments dividend entitlements - (0.2)
- (0.2)
In order to achieve better alignment of the interest of share-based remuneration award recipients with the interests of shareholders,
shareholder approval was given at the 2012 AGM to a proposal that awards made and that vest under the LTIP incentive programme should
reflect the equivalent value to that which accrues to shareholders by way of dividends during the vesting period. The Deferred Bonus Plan
and the Buy-Out Awards also accrue dividends during the vesting period. In the prior financial year, a credit of €0.2m was a consequence of
dividend accruing share-based payment awards deemed to have lapsed and their related dividend accrual being released.
Also in the prior financial year, a payment of €0.4m was made to recipients of dividend accruing share based payment awards, where the
award was exercised in the prior financial year and the resulting dividends accrued over the vesting period were paid.
Due to the continued impact of COVID-19, no interim dividend was paid and no final dividend is being declared with respect to FY2022. Total
dividends for the prior financial year was €nil. Total dividends of €nil (final dividend with respect to FY2021 and interim dividend with respect
to FY2022) were recognised as a deduction from the retained income reserve in the year ended 28 February 2022 (FY2021: €nil). In the prior
financial year, a credit of €0.2m was recorded as a consequence of dividend accruing share-based payment awards deemed to have lapsed
and their related dividend accrual being released.
Final dividends on ordinary shares are recognised as a liability in the financial statements only after they have been approved at an Annual
General Meeting of the Company. Interim dividends on ordinary shares are recognised when they are paid.
7. INCOME TAX (continued)
186 C&C Group plc Annual Report 2022
9. EARNINGS PER ORDINARY SHARE
Denominator computations
2022
Number
2021
Number
‘000 ‘000
Number of shares at beginning of year 320,480 319,495
Shares issued in respect of options exercised 147 985
Shares issued in respect of Rights Issue 81,287 -
Number of shares at end of year (note 25) 401,914 320,480
Weighted average number of ordinary shares (basic)* 374,560 336,236**
Adjustment for the effect of conversion of options 1,374 -
Weighted average number of ordinary shares, including options (diluted) 375,934 336,236**
* Excludes 10.7m treasury shares (FY2021: 10.8m).
** During the current financial year, the Group completed a Rights Issue at a discounted price of £1.86. As the rights price was issued at a discount, this was equivalent to a bonus
issue of shares combined with a full market price. As such, IAS 33 Earnings Per Share requires an adjustment to the number of shares outstanding before the Rights Issue to
reflect the bonus element inherent in it and also for this to be included in the EPS calculation for the prior period presented so as to provide a comparable result.
Profit/(loss) attributable to ordinary shareholders
2022 2021
€m €m
Group profit/(loss) for the financial year 37.1 (104.5)
Adjustment for exceptional items, net of tax (note 5) (8.9) 33.7
Earnings/(loss) as adjusted for exceptional items, net of tax 28.2 (70.8)
Cent Cent
Basic earnings/(loss) per share restated*
Basic earnings/(loss) per share 9.9 (31.1)
Adjusted basic earnings/(loss) per share 7. 5 (21.1)
Diluted earnings/(loss) per share restated*
Diluted earnings/(loss) per share 9.9 (31.1)
Adjusted diluted earnings/(loss) per share 7. 5 (21.1)
* During the current financial year, the Group completed a Rights Issue at a discounted price of £1.86. As the rights price was issued at a discount, this was equivalent to a bonus
issue of shares combined with a full market price. As such, IAS 33 Earnings Per Share requires an adjustment to the number of shares outstanding before the Rights Issue to
reflect the bonus element inherent in it and also for this to be included in the EPS calculation for the prior period presented so as to provide a comparable result.
Basic earnings/(loss) per share is calculated by dividing the Group profit/(loss) for the financial year by the weighted average number of
ordinary shares in issue during the year, excluding ordinary shares purchased/issued by the Group and accounted for as treasury shares
(FY2022: 10.7m shares, FY2021: 10.8m shares).
Diluted earnings/(loss) per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all potential dilutive ordinary shares. The average market value of the Company’s shares for purposes of calculating the dilutive
effect of share options was based on quoted market prices for the period of the year that the options were outstanding.
Employee share awards (excluding awards which were granted under plans where the rules stipulate that obligations must be satisfied by
the purchase of existing shares (note 4)), which are performance-based are treated as contingently issuable shares because their issue is
contingent upon satisfaction of specified performance conditions in addition to the passage of time. In accordance with IAS 33 Earnings
per Share, these contingently issuable shares are excluded from the computation of diluted earnings per share where the vesting conditions
would not have been satisfied as at the end of the reporting period (FY2022: 499,828, FY2021: 1,930,864). If dilutive other contingently
issuable ordinary shares are included in diluted EPS based on the number of shares that would be issuable if the end of the reporting period
was the end of the contingency period.
Corporate
Governance
Business
& Strategy
Financial
Statements
187
Notes forming part of the financial statements
(continued)
10. BUSINESS COMBINATIONS/DIVESTMENTS AND NON-CONTROLLING INTERESTS
The Group completed the sale of its wholly owned US subsidiary, Vermont Hard Cider Company (VHCC) to Northeast Kingdom Drinks
Group LLC on the 2 April 2021 for a total consideration of €17.5m (USD 20.5m) comprised of cash proceeds of €13.4m (€12.9m net cash
impact on disposal) and promissory notes of €4.1m (USD 4.8m), realising a profit of €4.5m on disposal (note 5). The sale was completed on 2
April 2021. VHCC was previously classified as a disposal group held for sale as at 28 February 2021.
The net identifiable assets disposed were as follows:
Asset value on disposal
€m
Non-current assets
Property, plant & equipment 5.8
Leased right-of-use assets 0.2
Non-current assets 6.0
Current assets
Inventories 4.1
Trade & other receivables 4.2
Current assets 8.3
Current liabilities
Lease liabilities (0.2)
Trade & other payables (2.0)
Current liabilities (2.2)
Total net identifiable assets disposed 12.1
Total consideration 17.5
Net identifiable assets disposed (12.1)
Working capital adjustment (0.6)
Foreign currency recycled on disposal of subsidiary 0.2
Transaction costs incurred (0.5)
Profit on disposal 4.5
Satisfied by:
Cash consideration received 13.4
Non-cash consideration received 4.1*
Total consideration 17. 5
Analysis of cash flows on disposal:
Cash consideration received 13.4
Cash and cash equivalents outflow (0.5)
Net cash inflow 12.9
The cumulative foreign exchange gain recognised in other comprehensive income in relation to VHCC was €0.2m. This was reclassified out
of the Currency Translation Reserve via the Consolidated Statement of Comprehensive Income and recognised in the Consolidated Income
Statement as part of the profit on disposal.
*As at 28 February 2022, the non-cash consideration which relates to the promissory notes issued on the date of transaction at €4.1m (USD
4.8m) were revalued to €4.3m, with a translation adjustment of €0.2m recognised.
Year ended 28 February 2021
In the prior financial year, the Group disposed of €1.3m of net assets with respect to its non-core Tipperary Water Cooler business for an
initial consideration of €7.4m, with further consideration potentially being dependent on further revenue targets being achieved. Transaction
costs of €0.3m were also incurred (included in the cash flows from operating activities) resulting in a profit on disposal of €5.8m.
188 C&C Group plc Annual Report 2022
Acquisition of equity accounted investments
Details of the Group’s equity accounted investments in the current and prior financial year are outlined in note 13.
11. PROPERTY, PLANT & EQUIPMENT
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment Total
€m €m €m €m
Group
Cost or valuation
At 29 February 2020 98.5 195.3 67. 2 361.0
Translation adjustment (1.3) (1.2) (1.1) (3.6)
Additions 0.4 10.4 1.7 12.5
Revaluation/(impairment) of property, plant & machinery 3.2 (3.5) - (0.3)
Assets held for sale (5.1) (2.6) (0.3) (8.0)
Disposal of subsidiary (note 10) - - (5.7) (5.7)
Group transfer reclassification (7.1) 7.1 - -
Disposals - - (5.9) (5.9)
At 28 February 2021 88.6 205.5 55.9 350.0
Translation adjustment 1.9 2.7 1.7 6.3
Additions 3.2 5.7 2.2 11.1
Revaluation of property, plant & machinery 3.1 - - 3.1
Group transfer reclassification (0.5) 0.5 - -
Disposals (1.4) (0.3) (0.3) (2.0)
At 28 February 2022 94.9 214.1 59.5 368.5
Depreciation
At 29 February 2020 16.8 143.2 54.3 214.3
Translation adjustment (0.2) (0.7) (0.8) (1.7)
Disposals - - (5.3) (5.3)
Assets held for sale (0.4) (1.8) (0.2) (2.4)
Disposal of subsidiary - - (4.8) (4.8)
Charge for the year 2.1 4.7 3.8 10.6
At 28 February 2021 18.3 145.4 47.0 210.7
Translation adjustment 0.4 1.5 1.5 3.4
Disposals (0.8) (0.2) (0.3) (1.3)
Charge for the year 2.3 4.2 3.2 9.7
At 28 February 2022 20.2 150.9 51.4 222.5
Net book value
At 28 February 2022 74.7 63.2 8.1 146.0
At 28 February 2021 70.3 6 0.1 8.9 139.3
10. BUSINESS COMBINATIONS/DIVESTMENTS AND NON-CONTROLLING INTERESTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
189
Notes forming part of the financial statements
(continued)
Freehold land &
buildings Plant & machinery
Motor vehicles &
other equipment Tota l
€m €m €m €m
28 February 2022
Leased right-of-use assets
At 28 February 2022, net carrying amount (note 19) 34.0 3.3 30.7 68.0
Total property, plant & equipment 108.7 66.5 38.8 214.0
28 February 2021
Leased right-of-use assets
At 28 February 2021, net carrying amount (note 19) 30.3 0.9 33.5 64.7
Total property, plant & equipment 100.6 61.0 42.4 204.0
Cash outflow with respect to property, plant & equipment was €14.9m (FY2021: €8.4m) primarily due to a decrease in closing capital
accruals as at 28 February 2022. No depreciation is charged on freehold land which had a book value of €18.2m at 28 February 2022.
Valuation of freehold land & buildings and plant & machinery - 28 February 2022
In the current financial year, the Group engaged the Real Estate & Capital Equipment Valuation team of PricewaterhouseCoopers LLP to
value the Group’s freehold land & buildings and plant & machinery at the Group’s manufacturing facilities in Clonmel (Tipperary), Wellpark
(Glasgow) and the Group’s facility in Castel Branco in Portugal. The valuers are members of the Royal Institution of Chartered Surveyors with
experience of undertaking property, plant and equipment valuations on a global basis.
For specialised assets, comprising the production facilities at Clonmel, Wellpark Brewery and Portugal the Depreciated Replacement Cost
approach has been applied to value land & buildings. The Depreciated Replacement Cost approach was also used to derive fair value for the
plant & machinery at the Group’s manufacturing facilities given their specialised nature.
The result of these external valuations, as at 28 February 2022, was an increase in the value of freehold land & buildings of €3.1m of which
€0.6m was credited to the Income Statement and €2.5m was credited to Other Comprehensive Income.
For all other items of land & buildings and plant & machinery the Group completed an internal assessment of the appropriateness of their
carrying value. Assisted by a market overview provided by the valuation team from PricewaterhouseCoopers LLP, with respect to the
geographic locations of the Group’s assets, the Group concluded that the carrying value was appropriate at 28 February 2022 and no
adjustment was recorded in this regard.
Valuation of freehold land & buildings and plant & machinery - 28 February 2021
In the prior financial year, the Group also engaged the Real Estate & Capital Equipment Valuation team of PricewaterhouseCoopers LLP to
value the Group’s freehold land & buildings and plant & machinery at the Group’s manufacturing facilities in Clonmel (Tipperary), Wellpark
(Glasgow) and the Group’s facility in Castel Branco in Portugal. The valuers are members of the Royal Institution of Chartered Surveyors with
experience of undertaking property, plant and equipment valuations on a global basis.
For specialised assets, comprising the production facilities at Clonmel, Wellpark Brewery and Portugal the Depreciated Replacement Cost
approach has been applied to value land & buildings. The Depreciated Replacement Cost approach was also used to derive fair value for the
plant & machinery at the Group’s manufacturing facilities given their specialised nature.
11. PROPERTY, PLANT & EQUIPMENT (continued)
190 C&C Group plc Annual Report 2022
The result of these external valuations, as at 28 February 2021, was an increase in the value of freehold land & buildings of €3.2m of which
€2.3m was credited to the Income Statement and €0.9m was credited to the revaluation reserve via Other Comprehensive Income. The
value of plant & machinery decreased by €3.5m which was expensed to the Income Statement as there was no previously recognised gain
in the revaluation reserve against which to offset.
Useful Lives
The following useful lives were attributed to the assets:
Asset category Useful life
Tanks 30 – 35 years
Process equipment 20 – 25 years
Bottling & packaging equipment 15 – 20 years
Process automation 10 years
Buildings 50 years
Freehold land &
buildings Plant & machinery
Motor vehicles &
other equipment Total
€m €m €m €m
Net book value (pre right-of-use assets)
Carrying value at 28 February 2022 post revaluation 74.7 63.2 8.1 146.0
Carrying value at 28 February 2022 pre revaluation 71.6 63.2 8.1 142.9
Gain on revaluation 3.1 - - 3.1
28 February 2022 classified within:
Income Statement 0.6
Other Comprehensive Income 2.5
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment Tot al
€m €m €m €m
Net book value (pre right-of-use assets)
Carrying value at 28 February 2021 post revaluation 70.3 60.1 8.9 139.3
Carrying value at 28 February 2021 pre revaluation 67.1 63.6 8.9 139.6
Gain/(loss) on revaluation 3.2 (3.5) - (0.3)
28 February 2021 classified within:
Income Statement (1.2)
Other Comprehensive Income 0.9
11. PROPERTY, PLANT & EQUIPMENT (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
191
Notes forming part of the financial statements
(continued)
Fair value hierarchy
The valuations of freehold land & buildings and plant & machinery, excluding right-of-use assets, are derived using data from sources which
are not widely available to the public and involve a degree of judgement. For these reasons, the valuations of the Group’s freehold land &
buildings and plant & machinery are classified as ‘Level 3’ as defined by IFRS 13 Fair Value Measurement, and as illustrated below:
Carrying amount
Quoted prices
Level 1
Significant
observable
Level 2
Significant
unobservable
Level 3
€m €m €m €m
Recurring measurements
Freehold land & buildings measured at market value 15.5 - - 15.5
Freehold land & buildings measured at Depreciated Replacement Cost 59.2 - - 59.2
Plant & machinery measured at Depreciated Replacement Cost 63.2 - - 63.2
At 28 February 2022 137.9 - - 137.9
Carrying amount
Quoted prices
Level 1
Significant
observable
Level 2
Significant
unobservable
Level 3
€m €m €m €m
Recurring measurements
Freehold land & buildings measured at market value 14.7 - - 14.7
Freehold land & buildings measured at Depreciated Replacement Cost 55.6 - - 55.6
Plant & machinery measured at Depreciated Replacement Cost 60.1 - - 6 0.1
At 28 February 2021 130.4 - - 130.4
Measurement techniques
The Group used the following techniques to determine the fair value measurements categorised in Level 3:
• The Group’s depots are valued using a market value approach. The market value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date.
• The Group’s specialised assets such as the production facilities at Clonmel, Wellpark and Portugal are valued using the Depreciated
Replacement Cost approach. Depreciated Replacement Cost is assessed, firstly, by the identification of the gross replacement cost
for each class of asset at each of the Group’s plants. A depreciation factor derived from both the physical and functional obsolescence
of each class of asset, taking into account estimated residual values at the end of the life of each class of asset, is then applied to the
gross replacement cost to determine the net replacement cost. An economic obsolescence factor, which is derived based on current
and anticipated capacity or utilisation of each plant and machinery asset, at each of the Group’s plants, as a function of total available
production capacity, is applied to determine the Depreciated Replacement Cost.
11. PROPERTY, PLANT & EQUIPMENT (continued)
192 C&C Group plc Annual Report 2022
Unobservable inputs
The significant unobservable inputs used in the market value measurement of land & buildings is as follows:
Valuation technique Significant unobservable inputs
Range of unobservable inputs –
Land (‘000)
Range of unobservable inputs –
Buildings
Relationship of unobservable
inputs to fair value
Comparable market
transactions
Price per square foot/
acre
The higher the price per
square foot/acre, the
higher the fair value
Republic of Ireland €50 – €150 (FY2021: no
change from current
year price) per hectare
€59 – €1,169 (FY2021:
€64- €1,119) per square
metre
Portugal €40 (FY2021: no change
from current year price)
per hectare
€100 - €585 (FY2021:
€96- €571) per square
metre
United Kingdom £275- £325 (FY2021:
£175- £225) per acre
£254 to £1,593 (FY2021:
£251- £1,524) per
square metre
The significant unobservable inputs used in the Depreciated Replacement Cost measurement of freehold land & buildings and plant &
machinery are as follows:
Gross replacement cost adjustment Increase in gross replacement cost of 0% (FY2021: 0%), based on management’s
judgment supported by discussions with valuers
Economic obsolescence adjustment factor Economic obsolescence, considered on an asset by asset basis, for each
plant, ranging from 0% to 100% (FY2021: 0% to 100%). The weighted average
obsolescence factor by site is as follows: Cidery, Ireland – 21%; Brewery
Scotland – 4% and Cidery, Portugal – 0%
Physical and functional obsolescence adjustment
factor
Adjustment for changes to physical and functional obsolescence ranging from
64% to 86% (FY2021: 63% to 85%)
The carrying value of depot freehold land & buildings would increase/(decrease) by €0.8m if the comparable open market value increased/
(decreased) by 5%.
The carrying value of freehold land & buildings which is valued on the Depreciated Replacement Cost basis, would increase/(decrease) by
€2.9m if the economic obsolescence adjustment factor was (decreased)/increased by 5%. The estimated carrying value of the same land &
buildings would increase/(decrease) by €1.1m if the gross replacement cost was increased/(decreased) by 2%.
The carrying value of plant & machinery in the Group which is valued on the Depreciated Replacement Cost basis, would increase by €2.5m
if the economic obsolescence adjustment factor was decreased by 5%. If the economic obsolescence adjustment increased by 5% the
value would increase by €2.5m. If the gross replacement cost was increased by 2% the carrying value of the Group’s plant & machinery
would increase by €0.9m. If the gross replacement cost decreased by 2% the carrying value of the Group’s plant & machinery would
decrease by €0.9m.
Company
The Company has no property, plant & equipment.
11. PROPERTY, PLANT & EQUIPMENT (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
193
Notes forming part of the financial statements
(continued)
12. GOODWILL & INTANGIBLE ASSETS
Goodwill Brands
Other intangible
assets Total
€m €m €m €m
Cost
At 29 February 2020 602.9 324.1 39.2 966.2
Additions - - 1.6 1.6
Translation adjustment (3.1) (2.2) (0.3) (5.6)
At 28 February 2021 599.8 321.9 40.5 962.2
Additions - - 2.2 2.2
Translation adjustment 6.5 4.5 0.5 11.5
At 28 February 2022 606.3 326.4 43.2 975.9
Amortisation and impairment
At 29 February 2020 76.2 214.6 22.5 313.3
Impairment charge for the year - - 0.3 0.3
Amortisation charge for the year - - 2.6 2.6
At 28 February 2021 76.2 214.6 25.4 316.2
Impairment charge for the year - - 0.6 0.6
Amortisation charge for the year - - 2.6 2.6
At 28 February 2022 76.2 214.6 28.6 319.4
Net book value
At 28 February 2022 530.1 111.8 14.6 656.5
At 28 February 2021 523.6 107. 3 15.1 646.0
Goodwill
Goodwill has been attributed to cash generating units (as identified under IAS 36 Impairment of Assets) as follows:
Ireland Scotland C&C Brands North America Export MCB Total
€m €m €m €m €m €m €m
At 29 February 2020 154.5 59.8 180.9 9.2 16.0 106.3 526.7
Translation adjustment - (0.7) (0.3) - - (2.1) (3.1)
At 28 February 2021 154.5 59.1 180.6 9.2 16.0 104.2 523.6
Translation adjustment - 1.5 0.7 - - 4.3 6.5
At 28 February 2022 154.5 60.6 181.3 9.2 16.0 108.5 530.1
Goodwill consists both of goodwill capitalised under Irish GAAP which at the transition date to IFRS was treated as deemed cost and
goodwill that arose on the acquisition of businesses since that date which was capitalised at cost and subsequently at fair value and
represents the synergies arising from cost savings and the opportunity to utilise the extended distribution network of the Group to leverage
the marketing of acquired products.
194 C&C Group plc Annual Report 2022
In line with IAS 36 Impairment of Assets goodwill is allocated to each cash generating unit (CGU) which is expected to benefit from the
combination synergies. These CGU’s represent the lowest level within the Group at which goodwill is monitored for internal management
purposes.
All goodwill is regarded as having an indefinite life and is not subject to amortisation under IFRS but is subject to annual impairment testing.
Brands
Brands are expected to generate positive cash flows for as long as the Group owns the brands and have been assigned indefinite lives.
Capitalised brands include the Tennent’s beer brands and the Gaymers cider brands acquired during FY2010, Waverley wine brands
acquired during FY2013 and the Matthew Clark and Bibendum brands acquired during FY2019.
The Tennent’s, Gaymers, Waverley wine brands and Matthew Clark and Bibendum brands were valued at fair value on the date of
acquisition in accordance with the requirements of IFRS 3 (2008) Business Combinations by independent professional valuers. The Waverley
wine brands were valued at cost.
The carrying value of the Tennent’s beer brand as at 28 February 2022 amounted to €76.6m (FY2021: €73.5m) and has an indefinite life
which is subject to annual impairment testing. The movement in the current financial year is due to translation adjustment.
The carrying amount of brands with indefinite lives are allocated to operating segments as follows:
Ireland Great Britain Total
€m €m €m
At 29 February 2020 109.5 109.5
Impairment charge for the year - - -
Translation adjustment - (2.2) (2.2)
At 28 February 2021 - 107. 3 107. 3
Translation adjustment - 4.5 4.5
At 28 February 2022 - 111.8 111.8
The brands are protected by trademarks, which are renewable indefinitely in all major markets where they are sold and it is the Group’s
policy to support them with the appropriate level of brand advertising. In addition, there are not believed to be any legal, regulatory or
contractual provisions that limit the useful lives of these brands. Accordingly, the Directors believe that it is appropriate that the brands be
treated as having indefinite lives for accounting purposes.
No intangible assets were acquired by way of government grant, there is no title restriction on any of the capitalised intangible assets and
no intangible assets are pledged as security. There are no contractual commitments in relation to the acquisition of intangible assets at year
end.
12. GOODWILL & INTANGIBLE ASSETS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
195
Notes forming part of the financial statements
(continued)
Other intangible assets
Other intangible assets have been attributed to operating segments (as identified under IFRS 8 Operating Segments) as follows:
Ireland Great Britain Total
€m €m €m
Cost
At 29 February 2020 6.8 32.4 39.2
Additions 0.2 1.4 1.6
Translation adjustment - (0.3) (0.3)
At 28 February 2021 7. 0 33.5 40.5
Additions 0.1 2.1 2.2
Translation adjustment - 0.5 0.5
At 28 February 2022 7.1 36.1 43.2
Amortisation and impairment
At 29 February 2020 2.8 19.7 22.5
Impairment charge for the year - 0.3 0.3
Amortisation charge for the year 0.6 2.0 2.6
At 28 February 2021 3.4 22.0 25.4
Impairment charge for the year - 0.6 0.6
Amortisation charge for the year 0.6 2.0 2.6
At 28 February 2022 4.0 24.6 28.6
Net book value
At 28 February 2022 3.1 11.5 14.6
At 28 February 2021 3.6 11.5 15.1
In the current financial year, the Group wrote off IT intangible assets of €0.6m relating to cloud software licence agreements treated as
service contracts. In the prior financial year, the Group wrote off an IT intangible asset where the project was not completed, as a direct
consequence of COVID-19 of €0.3m.
Other intangible assets comprise the fair value of trade relationships acquired as part of the acquisition of Matthew Clark and Bibendum in
FY2019, trade relationships acquired as part of the acquisition of TCB Wholesale during FY2015, the Gleeson trade relationships acquired
during FY2014 and 20 year distribution rights for third party beer products acquired as part of the acquisition of the Tennent’s business
during FY2010. These were valued at fair value on the date of acquisition in accordance with the requirements of IFRS 3 (2008) Business
Combinations by independent professional valuers. The intangible assets have a finite life and are subject to amortisation on a straight-line
basis. Also included within other intangible assets are software and licences.
The amortisation charge for the year ended 28 February 2022 with respect to intangible assets was €2.6m (FY2021: €2.6m).
12. GOODWILL & INTANGIBLE ASSETS (continued)
196 C&C Group plc Annual Report 2022
Impairment testing
To ensure that goodwill and brands that are considered to have an indefinite useful economic life are not carried at above their recoverable
amount, impairment testing is performed comparing the carrying value of the assets with their recoverable amount using value-in-use
computations. Impairment testing is performed annually or more frequently if there is an indication that the carrying amount may not be
recoverable. Where the value-in-use exceeds the carrying value of the asset, the asset is not impaired.
As permitted by IAS 36 Impairment of Assets, the value of the Group’s goodwill has been allocated to groups of cash generating units (CGU),
which are not larger than an operating segment determined in accordance with IFRS 8 Operating Segments. These business segments
represent the lowest levels within the Group at which the associated goodwill is monitored for management purposes.
The recoverable amount is calculated using value-in-use computations based on estimated future cash flows discounted to present value
using a discount rate appropriate to each cash generating unit and brand. Terminal values are calculated on the assumption that cash flows
continue in perpetuity.
The key assumptions used in the value-in-use computations using level 3 inputs in accordance with fair value hierarchy are:
• Expected volume, net revenue and operating profit growth rates – cash flows for each CGU and brand are based on detailed financial
projections for years one and two which were then projected out for years three, four and five.
• Long-term growth rate – cash flows after the first five years were extrapolated using a long-term growth rate, on the assumption that cash
flows for the first five years will increase at a nominal growth rate in perpetuity.
• Discount rate.
The key assumptions were based on management’s assessment of anticipated market conditions for each CGU. The Group’s cash flow
forecasts assume the continuation of trading with no lockdowns or the reintroduction of COVID-19 restrictions. Cost inflation pressures have
grown over recent months and in response, the Group implemented a series of price increases which, alongside the previously announced
€18.0m cost reduction programme and cost hedge positions taken, affords the Group a degree of protection from the inflationary
environment as the Group enters into FY2023. The Group took into account historical experience and in particular the Group’s experience
over the last twelve month period. The Group also considers its core strengths and weaknesses in the markets in which it operates and
external factors such as macro-economic factors, inflation expectations by geography, regulation and expected changes in regulation (such
as expected changes to duty rates and minimum pricing), market growth rates, sales price trend, competitor activity, market share targets
and strategic plans and initiatives.
A terminal growth rate of 1.75%-2.00% (FY2021: 1.75%-2.00%) in perpetuity was assumed based on an assessment of the likely long-term
growth prospects for the sectors and geographies in which the Group operates. The resulting cash flows were discounted to present value
using a range of discount rates between 5.92%-6.68% (FY2021: 7.11%-8.41%); these rates are in line with the Group’s estimated pre-tax
weighted average cost of capital for the two main geographies in which the Group operates (Ireland and Great Britain), arrived at using the
Capital Asset Pricing Model as adjusted for asset and country specific factors.
12. GOODWILL & INTANGIBLE ASSETS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
197
Notes forming part of the financial statements
(continued)
The Group has performed the detailed impairment testing calculations by cash generating units with the following discount rates being
applied:
Market
Discount rate
2022
Discount rate
2021
Terminal growth
rate 2022
Terminal growth
rate 2021
Ireland 6.68% 8.41% 2.00% 2.00%
Scotland 6.12% 7.5 6% 2.00% 2.00%
C&C Brands 6.12% 7.5 6% 2.00% 2.00%
North America 5.92% 7.11% 1.75% 1.75%
Export 6.12% 7.5 6% 2.00% 2.00%
Matthew Clark Bibendum (MCB) 6.12% 7.5 6 % 2.00% 2.00%
The impairment testing carried out at year end identified headroom in the recoverable amount of all the Group’s goodwill and intangible
assets (FY2021: €nil impairment charge).
Significant goodwill amounts
The goodwill allocated to Ireland, C&C Brands and MCB CGU’s amount to 29% (FY2021: 30%), 34% (FY2021: 34%) and 20% (FY2021: 20%)
of the total carrying amount of goodwill respectively.
Ireland C&C Brands MCB
2022 2021 2022 2021 2022 2021
Goodwill allocated to the cash generating unit
at balance sheet date 154.5 154.5 181.3 180.6 108.5 104.2
Discount rate applied to the cash flow
projections (real pre-tax) 6.68% 8.41% 6.12% 7. 56% 6.12% 7. 56%
Sensitivity analysis
In the current financial year, the impairment testing carried out as at 28 February 2022 identified headroom in the recoverable amount of the
brands and goodwill compared to their carrying values.
The key sensitivities for the impairment testing are net revenue and operating profit assumptions, discount rates applied to the resulting cash
flows and the expected long-term growth rates.
12. GOODWILL & INTANGIBLE ASSETS (continued)
198 C&C Group plc Annual Report 2022
The value-in-use calculations indicate significant headroom in respect of all cash generating units. The cash generating unit with the least
headroom, is the C&C Brands cash generating unit, although the headroom is in excess of €102m. The table below identifies the impact of a
movement in the key inputs with respect to C&C Brands.
2022 2021
Movement
Increase/
(decrease) on
headroom Movement
Increase/
(decrease) on
headroom
% €m % €m
Increase/(decrease) in operating profit 2.5/(2.5) 8.3/(8.3) 2.5/(2.5) 6.9/(6.9)
Increase in discount rate 0.25 (19.6) 0.25 (12.0)
Decrease in discount rate (0.25) 22.1 (0.25) 13.1
Increase in terminal growth rate 0.25 18.9 0.25 10.6
Decrease in terminal growth rate (0.25) (16.8) (0.25) (9.7)
The Group concludes that no reasonable movement in any of the underlying assumptions would result in a material impairment in any of the
Group’s cash generating units or brands.
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS
(a) Equity accounted investments/financial assets – Group
Joint ventures Associates
Admiral Taverns
Drygate Brewing
Company
Limited
Whitewater
Brewing
Company
Limited Other Total
€m €m €m €m €m
Investment in equity accounted investments/financial assets
Carrying amount at 1 March 2020 82.8 0.3 0.4 0.4 83.9
Purchase price paid 6.7 - - 0.2 6.9
Share of loss after tax (6.0) (0.1) - - ( 6.1)
Share of exceptional loss after tax (8.8) - - - (8.8)
Impairment of equity investment (8.9) (0.2) - - (9.1)
Equity accounted investment asset adjustment (1.1) - - - (1.1)
Share of Other Comprehensive Income (0.4) - - - (0.4)
Translation adjustment (2.2) - - - (2.2)
Carrying amount at 28 February 2021 62.1 - 0.4 0.6 63.1
Purchase price paid - - - 0.3 0.3
Share of profit after tax 2.6 - - - 2.6
Share of exceptional profit after tax (note 5) 2.7 - - - 2.7
Impairment of equity investment (6.4) (6.4)
Share of Other Comprehensive Income 2.2 - - - 2.2
Translation adjustment 2.7 - - - 2.7
Classified as asset held for sale (note 16)
(65.9)
- - - (65.9)
Carrying amount at 28 February 2022 - - 0.4 0.9 1.3
12. GOODWILL & INTANGIBLE ASSETS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
199
Notes forming part of the financial statements
(continued)
Summarised financial information for the Group’s investment in joint ventures and associates which are accounted for using the equity
method is as follows:
Admiral
Taverns
2022*
Joint ventures
2022
Associates
2022
Admiral Taverns
2021*
Joint ventures
2021
Associates
2021
€m
€m €m €m €m €m
Non-current assets 668.4 2.5 3.4 379.4 2.4 3.2
Current assets 74.9 0.9 1.5 3 6.1 0.8 1.4
Non-current liabilities (466.3) (1.7) (2.2) (239.0) (1.7) (2.1)
Current liabilities (105.9) (1.5) (0.8) ( 27. 2) (1.3) (0.7)
Net assets 171.1** 0.2 1.9 149.3 0.2 1.8
Revenue 127. 3 2.7 1.2 42.7 2.5 0.3
Profit/(loss) before tax 4.9 (0.2) (0.1) (37.9 ) (0.2) -
Other Comprehensive Income 4.4 - - (0.8) - -
* Included in the current assets for Admiral Taverns is cash and cash equivalents of €32.0m (FY2021: €15.0m). Admiral Taverns also has depreciation and amortisation of €13.7m
(FY2021: €10.0m), net interest costs of €29.0m (FY2021: €16.8m) and a tax credit of €5.9m (FY2021: €7.5m).
** Net assets of €171.1m by the Group’s share in equity at 24 February 2022 of 48.85% amounts to €83.6m however the percentage ownership of the Group has changed multiple
times since the original investment and therefore the weighted share of net assets attributable to the Group at 24 February 2022 was €81.7m. The Group also booked an
impairment charge of €8.9m in the prior financial year which translated at FY2022 rates is €9.4m and an impairment charge in the current financial year of €6.4m.
A listing of the Group’s equity accounted investments is contained in note 29.
Admiral Taverns
On 6 December 2017, the Group entered into a joint venture arrangement for a 49.9% share in Brady P&C Limited (“Admiral Taverns”), a
UK incorporate entity with Proprium Capital Partners (50.1%). Brady P&C Limited subsequently incorporated a UK company, Brady Midco
Limited where Admiral management acquired 6.5% of the shares. Brady Midco Limited incorporated Brady Bidco Limited which acted as
the acquisition vehicle to acquire the entire share capital of AT Brit Holdings Limited (trading as Admiral Taverns) on the 6 December 2017.
The equity investment by the Group was £37.4m (€42.4m euro equivalent on date of investment) representing 46.65% of the issued share
capital of Admiral Taverns. The Group has 50% representation on the board and no decision can be made without 100% agreement by all
Directors. The Group determined that Admiral Taverns was to be accounted for as a joint venture.
In FY2020, Admiral management disposed of 2% of their shareholding which in turn increased C&C’s shareholding from 46.65% to 47.7%.
In the prior financial year, the Group made an equity investment in Admiral Taverns for €6.7m (£6.0m). Also, during the prior financial year,
Admiral management disposed of 2.4% of their shareholding which in turn increased C&C’s shareholding from 47.7% to 48.85%.
On 17 May 2022, the Group announced the sale of its joint venture investment in Admiral Taverns, to Proprium Capital Partners for a total
consideration of €65.8m (£55.0m). The sale of the shares will be completed and the consideration will be paid in three tranches during
FY2023, subject only to FCA approval. Admiral Taverns was classified as an asset held for sale as at 24 February 2022. The Group continued
to equity account for this investment up until this date.
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
200 C&C Group plc Annual Report 2022
In the current financial year, the share of profit before exceptional items of Admiral Taverns attributable to the Group was €2.6m (FY2021:
€6.0m loss). The Group also recognised a credit of €2.7m with respect to its share of Admiral Taverns’ exceptional items (FY2021: €8.8m
charge). This included a credit of €4.1m with respect to the Group’s share of the revaluation gain arising from the fair value exercise to value
Admiral’s property assets (FY2021: €7.0m loss). The Group also recognised an exceptional charge of €1.4m (FY2021: €1.8m) in relation to
its share of other exceptional items for the year, including the Group’s share of acquisition costs of €1.4m incurred with respect to Admiral
Taverns’ acquisition of Hawthorn. The Group also recognised its share of other exceptional items for the year of €0.5m, primarily relating
to restructuring costs. This was offset by a release from the expected loss provision with respect to the recoverability of Admiral Taverns’
debtor book as a consequence of COVID-19 of €0.5m.
As a result of the same property valuation exercise, a gain of €2.2m with respect to the Group’s share of the revaluation was recognised in
Other Comprehensive Income (FY2021: €0.4m loss).
Also in the current financial year, the Group assessed the carrying value of its equity accounted investment as a result of its classification
as an asset held for sale as at 24 February 2022 and recognised an impairment charge of €6.4m (FY2021: €8.9m). This impairment charge
reverses previously accumulated gains and losses in relation to the application of equity accounting for the Admiral Taverns investment, to
reflect the recoverable value of the Group’s investment in line with the agreed consideration of £55.0m (€65.9m at date of classification as
held for sale, €65.8m at year-end rate).
In the prior financial year, the Group also recognised its share of an adjustment to the net asset allocation between the joint venture partners
and the minority shareholder of €1.1m resulting from the repurchase of shares from the minority shareholder.
Drygate Brewing Company Limited
In 2015, the Group entered into a joint venture arrangement with Heather Ale Limited, run by the Williams brothers who are recognised
as leading family craft brewersin Scotland, to form a new entity Drygate Brewing Company Limited. The joint venture, which is run
independently of the joint venture partners existing businesses, operates a craft brewing and retail facility adjacent to Wellpark brewery.
In the prior financial year, in light of the impact of COVID-19 on the hospitality and pub industry the Group assessed the carrying value of
its investment in Drygate Brewing Company Limited at 28 February 2021 and recorded an impairment charge of €0.2m (£0.2m) within
exceptional operating costs.
Whitewater Brewing Company Limited
On 20 December 2016, the Group acquired 25% of the equity share capital of Whitewater Brewing Company Limited, an Irish craft brewer
for £0.3m (€0.3m).
Other
During the current financial year, the Group made an additional investment into Jubel Ltd of €0.3m (£0.2m), the additional subscription of
shares in Jubel maintained the Group's existing percentage shareholding of 8.4%.
During the prior financial year, the Group made a 1% investment in an English entity Bramerton Condiments Limited for €0.1m (£0.1m) and a
50% investment in 3 Counties Spirits Limited for €nil consideration. The Group also acquired an 8% shareholding in Innis & Gunn Holdings
Limited at €nil cost. Share subscription costs of €0.1m (£0.1m) were incurred in this regard.
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
201
Notes forming part of the financial statements
(continued)
The Group has a 33% investment in CVBA Braxatorium Parcensis of €0.2m. The Group also has an equity investment in Shanter Inns
Limited, CVBA Braxatorium Parcensis, Beck & Scott (Services) Limited (Northern Ireland) and The Irish Brewing Company Limited (Ireland).
The value of each of these investments is less than €0.1m in the current and prior financial year.
(b) Financial Assets – Company
2022 2021
€m €m
Equity investment in subsidiary undertakings at cost
At beginning of year 985.4 984.6
Capital contribution in respect of share options granted to employees of subsidiary undertakings 1.5 0.8
Capital contribution in respect of the Rights Issue 171.3 -
At end of year 1,158.2 985.4
The total expense of €1.5m (FY2021: €0.8m) attributable to equity settled awards granted to employees of subsidiary undertakings has been
included as a capital contribution in financial assets.
In the opinion of the Directors, the shares in the subsidiary undertakings are worth at least the amounts at which they are stated in the
Consolidated Balance Sheet. Details of subsidiary undertakings are set out in note 29.
14. INVENTORIES
2022 2021
€m €m
Group
Raw materials & consumables 37.6 38.4
Finished goods & goods for resale 130.6 82.9
Total inventories at lower of cost and net realisable value 168.2 121.3
Inventory write-down recognised within operating costs before exceptional items amounted to €1.1m (FY2021: €0.9m). The inventory write-
down in the current and prior financial year was with respect to breakages and write off of damaged and obsolete stock. The Group realised
an exceptional credit of €4.1m with respect to inventory (FY2021: €5.8m charge), this related to recoveries on inventory that had been
deemed at risk of obsolescence as a consequence of the COVID-19 restrictions.
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
202 C&C Group plc Annual Report 2022
15. TRADE & OTHER RECEIVABLES
Group Company
2022 2021 2022 2021
€m €m €m €m
Amounts falling due within one year:
Trade receivables 147.5 75.9 - -
Amounts due from Group undertakings - - 114.7 118.6
Advances to customers 4.6 3.8 - -
Prepayments and other receivables 34.2 23.1 - -
186.3 102.8 114.7 118 .6
Amounts falling due after one year:
Advances to customers 38.4 38.3 - -
Prepayments and other receivables 4.6 3.5 - -
43.0 41.8 - -
Total 229.3 144.6 114.7 118.6
Amounts due from Group undertakings are a combination of interest bearing and interest free receivables and are all repayable on demand.
The Group manages credit risk through the use of a receivables purchase arrangement, for an element of its trade receivables. Under
the terms of this arrangement, the Group transfers the credit risk, late payment risk and control of the receivables sold. This arrangement
contributed €84.1m to Group cash (FY2021: €45.0m) at 28 February 2022. The Group’s debtors would therefore have been €84.1m higher
(FY2021: €45.0m) had the programme not been in place. The Group’s trade receivables programme is not recognised on the Consolidated
Balance Sheet as it meets the de-recognition criteria under IFRS 9 Financial Instruments.
The aged analysis of trade receivables and advances to customers analysed between amounts that were not past due and amounts past
due at 28 February 2022 and 28 February 2021 were as follows:
Trade receivables Advances to customers Total Total
Gross Impairment Gross Impairment Gross Impairment Gross Impairment
2022 2022 2022 2022 2022 2022 2021 2021
€m €m €m €m €m €m €m €m
Group
Not past due 127.6 (2.0) 46.1 (5.2) 173.7 (7.2) 107. 5 (10.8)
Past due:
Past due 0-30 days 5.0 (0.3) - - 5.0 (0.3) 5.8 (1.0)
Past due 31-120 days 9.6 (0.3) 0.4 (0.1) 10.0 (0.4) 13.6 (3.7)
Past due 121-365 days 7. 9 (0.3) 0.7 (0.3) 8.6 (0.6) 9.0 (4.9)
Past due more than one year 7.8 ( 7.5) 3.2 (1.8) 11.0 (9.3) 9.8 ( 7. 3 )
Total 157.9 (10.4) 50.4 ( 7.4) 208.3 (17.8 ) 145.7 (27.7 )
Trade receivables, advances to customers and other receivables are recognised initially at fair value and subsequently measured at
amortised cost less loss allowance or impairment losses.
Specifically, for advances to customers, any difference between the present value and the nominal amount at inception is treated as an
advance of discount prepaid to the customer and is recognised in the Income Statement in accordance with the terms of the agreement.
The discount rate calculated by the Group is at least based on the risk-free rate plus a margin, which takes into account the risk profile of the
customer.
Corporate
Governance
Business
& Strategy
Financial
Statements
203
Notes forming part of the financial statements
(continued)
The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for trade
receivables, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
To measure the expected credit losses, trade receivables are assessed collectively in groups that share similar credit risk characteristics,
such as customer segments and in particular the Group’s view of how COVID-19 and related restrictions impacted particular customer
segments over the last twelve month period and how they are expected to impact them going forward, historical information on payment
patterns including the payment patterns over the last twelve month period, terms of payment and the impact of government schemes
coming to an end as markets reopened. COVID-19 had and continues to have a material impact on the assessment of credit losses of the
Group’s receivables balances. The Group recorded an exceptional credit of €7.9m with respect to the Group’s receivables balances in the
current financial year (FY2021: €6.1m) in this regard (note 5).
Regarding advances to customers, the Group applies the general approach to measure expected credit losses which requires a loss
provision to be recognised based on twelve month or lifetime expected credit losses, provided a significant increase in credit risk has
occurred since initial recognition. The Group assesses the expected credit losses for advances to customers based on historical information
on repayment patterns including the repayment patterns over the last twelve month period and the impact of government schemes coming
to an end as markets reopened. The credit risk on advances to customers can be reduced through the value of security and/or collateral
given. In the current and prior financial year, COVID-19 had a material impact on the assessment of credit losses with regard to advances to
customers at year end and the Group recorded an exceptional credit of €5.5m (FY2021: charge of €1.2m) in this regard (note 5).
Trade receivables are on average receivable within 32 days (FY2021: 33 days) of the balance sheet date, are unsecured and are not interest-
bearing. For more information on the Group’s credit risk exposure refer to note 24.
The movement in the allowance for impairment in respect of trade receivables and advances to customers during the year was as follows:
Trade receivables
Advance to
customers Total Total
2022 2022 2022 2021
€m €m €m €m
Group
At beginning of year 16.4 11.3 27.7 40.0
Recovered during the year (7.9) (5.5) (13.4) (11.4)
Provided during the year 3.1 1.5 4.6 5.3
Derecognised on disposal (0.5) - (0.5) (0.2)
Written off during the year (1.9) - (1.9) (5.1)
Translation adjustment 1.2 0.1 1.3 (0.9)
At end of year 10.4 7.4 17.8 27.7
At 28 February 2022, regarding the impact of the expected credit loss model on trade receivables and advances to customers, the Group
has provided for expected credit losses over the next twelve months of €5.7m (FY2021: €6.2m) and expected lifetime losses of €12.1m
(FY2021: €21.5m).
15. TRADE & OTHER RECEIVABLES (continued)
204 C&C Group plc Annual Report 2022
16. ASSET HELD FOR SALE
On 17 May 2022, the Group announced the sale of its joint venture investment in Admiral Taverns, to Proprium Capital Partners for a total
consideration of €65.8m (£55.0m). The sale of the shares will be completed and the consideration will be paid in three tranches during
FY2023, subject only to FCA approval. Admiral Taverns was classified as an asset held for sale as at 24 February 2022. The Group assessed
the carrying value of its equity accounted investment as a result of its classification as an asset held for sale as at 24 February 2022 and
recognised an impairment charge of €6.4m. This impairment charge reverses previously accumulated gains and losses in relation to the
application of equity accounting for the Admiral Taverns investment, to reflect the recoverable value of the Group’s investment in line with the
agreed consideration of €65.8m (£55.0m).
The equity accounted investment in Admiral Taverns was previously presented within the Great Britain reportable segment in note 1 in
accordance with IFRS 8 Operating Segments.
2022
€m
Asset held for sale
Equity accounted investment 65.9
Translation adjustment (0.1)
At 28 February 2022 65.8
The cumulative foreign exchange gain recognised in other comprehensive income in relation to the asset held for sale as at 24 February
2022 was €2.7m.
In the prior financial year, the Group classified its wholly owned US subsidiary, Vermont Hard Cider Company (“VHCC”) as a disposal group
held for sale, as at 28 February 2021. On 2 April 2021, the Group completed the sale of VHCC for a total consideration of €17.5m (USD
20.5m) (see note 10).
17. TRADE & OTHER PAYABLES
Group Company
2022 2021 2022 2021
€m €m €m €m
Trade payables 206.8 135.2 - -
Payroll taxes & social security 6.5 4.1 - -
VAT 32.3 41.4 - -
Excise duty 46.2 40.0 - -
Accruals 94.3 75.5 2.9 3.1
Amounts due to Group undertakings - - 49.7 33.9
Total 386.1 296.2 52.6 37.0
Amounts due to Group undertakings are a combination of interest bearing and interest free payables and are all payable on demand.
The Group’s exposure to currency and liquidity risk related to trade & other payables is disclosed in note 24.
Company
The Company has entered into financial guarantee contracts to guarantee the indebtedness of the liabilities of certain of its subsidiary
undertakings. As at 28 February 2022, the Directors consider these to be in the nature of insurance contracts and do not consider it
probable that the Company will have to make a payment under these guarantees and as such discloses them as a contingent liability as
detailed in note 27.
Corporate
Governance
Business
& Strategy
Financial
Statements
205
Notes forming part of the financial statements
(continued)
18. PROVISIONS
Restructuring Dilapidation Other Total Total
2022 2022 2022 2022 2021
€m €m €m €m €m
At 1 March 2.0 3.8 6.9 12.7 9.2
Translation adjustment - 0.2 0.1 0.3 -
Charged during the year 0.6 1.6 0.9 3.1 13.8
Released during the year - (0.1) (0.8) (0.9) (2.2)
Utilised during the year (2.4) (0.1) (0.6) (3.1) (8.1)
At end of year 0.2 5.4 6.5 12.1 12.7
Classified within:
Current liabilities 8.2 6.2
Non-current liabilities 3.9 6.5
12.1 12.7
Restructuring
Restructuring costs of €0.6m were incurred in the current financial year (FY2021: €8.1m). These related to severance costs of €0.6m (FY2021:
€4.9m) which were incurred with respect to the restructuring of the Group as a consequence of the COVID-19 pandemic. In the prior year an
additional €1.9m severance costs arose as a consequence of the optimisation of the delivery networks in England and Scotland. Also in the
prior year, the Group incurred additional costs of €2.0m with respect to the optimisation of the delivery networks in England and Scotland
which was offset by a credit of €0.7m relating to the profit on disposal of a property as a direct consequence of the optimisation project.
€2.4m of these costs were paid during the year (FY2021: €6.2m) with €0.2m outstanding at year end (FY2021: €2.0m).
Dilapidation
The Group has a dilapidation provision of €5.4m at 28 February 2022 (FY2021: €3.8m). The Group’s dilapidation provision at 28 February
2022 is with respect to dilapidation costs for leased depots of €5.1m (FY2021: €3.5m) and a €0.3m dilapidation provision for the leased fleet
(FY2021: €0.3m).
Other
A significant proportion of the Other provision balance of €6.5m relates primarily to a provision with respect to lost kegs and a legal provision
which was settled post year end. The remainder of this provision is in respect of costs associated with the cyber security incident within the
Group's Matthew Clark and Bibendum operations.
Other provisions carried forward from FY2021 relate to provisions for various legal claims, a provision for an onerous trade contract and a
provision for the Group’s exposure to employee and third-party insurance claims. Under the terms of employer and public liability insurance
policies, the Group bears a portion of the cost of each claim up to the specified excess. The provision is calculated based on the expected
portion of settlement costs to be borne by the Group in respect of specific claims arising before the Balance Sheet date.
206 C&C Group plc Annual Report 2022
19. LEASES
The Group adopted IFRS 16 Leases from 1 March 2019 and has lease contracts for various items of freehold land & buildings, plant &
machinery and motor vehicles & other equipment.
Set out below are the carrying amounts of right-of-use assets (included under property, plant & equipment note 11) recognised and the
movements during the year:
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment Total
€m €m €m €m
Leased right-of-use assets
At 1 March 2020, net carrying amount 35.2 1.3 40.2 76.7
Translation adjustment (0.8) - (0.9) (1.7)
Additions 2.7 - 9.2 11.9
Remeasurement (1.0) - (2.9) (3.9)
Disposals - - (0.1) (0.1)
Disposal of subsidiary - - (0.4) (0.4)
Asset held for sale (0.2) - - (0.2)
Depreciation charge for the year (5.6) (0.4) (11.6) (17. 6 )
At 28 February 2021 30.3 0.9 33.5 64.7
Translation adjustment 1.1 - 1.3 2.4
Additions 0.4 - 22.7 23.1
Reclassification - 3.1 (3.1) -
Remeasurement 7.2 (0.3) (4.8) 2.1
Disposals - - (4.8) (4.8)
Depreciation charge for the year (5.0) (0.4) (14.1) (19.5)
At 28 February 2022 34.0 3.3 30.7 68.0
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment Total
€m €m €m €m
Leased liabilities
At 1 March 2020, net carrying amount (49.3) (1.3) (42.7) (93.3)
Translation adjustment 1.0 - 1.0 2.0
Additions to lease liabilities (2.7) - (9.2) (11.9)
Remeasurement 1.0 - 2.9 3.9
Disposals - - 0.1 0.1
Disposal of subsidiary - - 0.4 0.4
Payments* 8.7 0.5 13.3 22.5
Asset held for sale 0.2 - - 0.2
Discount unwinding (1.9) - (1.6) (3.5)
At 28 February 2021 (43.0) (0.8) (35.8) (79.6)
Translation adjustment (1.8) (0.2) (1.2) (3.2)
Additions to lease liabilities (0.4) - (22.7) (23.1)
Reclassification - (3.1) 3.1 -
Remeasurement (6.5) 0.4 5.2 (0.9)
Disposals - - 4.9 4.9
Payments* 8.5 0.5 16.2 25.2
Discount unwinding (1.6) - (1.7) (3.3)
At 28 February 2022 (44.8) (3.2) (32.0) (80.0)
* Payments are apportioned between finance charges €3.3m (FY2021: €3.5m) and payment of lease liabilities €21.9m (FY2021: €19.0m) in the Cash Flow Statement
Corporate
Governance
Business
& Strategy
Financial
Statements
207
Notes forming part of the financial statements
(continued)
Lease liabilities classified within:
Total Total
2022 2021
€m €m
Current liabilities (20.2) (18.9)
Non-current liabilities (59.8) (60.7)
(80.0) (79.6)
The table below shows a maturity analysis of the discounted and undiscounted lease liability arising from the Group’s leasing activities. The
projections are based on the foreign exchange rates at the end of the relevant financial year and on interest rates (discounted projections
only) applicable to the lease portfolio.
As at 28 February 2022 As at 28 February 2021
Discounted Undiscounted Discounted Undiscounted
€m €m €m €m
Within one year (20.2) (23.1) (18.9) (21.7)
Between one and two years (14.7) (16.9) (17.4) (19.5)
Between two and three years (11.9) (13.5) (10.5) (12.2)
Between three and four years (10.4) (11.6) (8.1) (9.4)
Between four and five years ( 7.0) (7. 9) ( 7. 3 ) (8.3)
After five years (15.8) (18.4) (17.4) (19.8)
Total (80.0) (91.4) (79.6) (90.9)
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are
met. The following lease costs have been charged to the Income Statement as incurred:
2022 2021
€m €m
Expense relating to short-term leases (included in operating costs) 1.5
0.7
Total 1.5
0.7
20. INTEREST BEARING LOANS & BORROWINGS
Group Company
2022 2021 2022 2021
€m €m €m €m
Current liabilities
Unsecured loans repayable by one repayment on maturity 0.7 0.8 0.7 0.8
Unsecured loans repayable by instalment (37.4) (50.6) 0.1 (5.6)
Private Placement notes repayable by one repayment on maturity 0.1 0.1 0.1 0.1
(36.6) (49.7) 0.9 (4.7)
Non-current liabilities
Unsecured loans repayable by one repayment on maturity (75.0) (241.3) 1.0 1.8
Unsecured loans repayable by instalment - (37.5) - -
Private Placement notes repayable by one repayment on maturity (144.4) (141.5) (144.4) (141.5)
(219.4) (420.3) (143.4) (139.7)
Total borrowings (256.0) (470.0) (142.5) (144.4)
19. LEASES (continued)
208 C&C Group plc Annual Report 2022
Group and Company
Outstanding borrowings of the Group and Company are net of unamortised issue costs. During the prior financial year, the Group completed
the successful issue of new US Private Placement (“USPP”) notes and incurred additional issue costs of €1.4m in this regard. All unamortised
issue costs are being amortised to the Income Statement over the remaining life of the multi-currency revolving facilities agreement, the Euro
term loan and the US Private Placement notes to which they relate. The value of unamortised issue costs at 28 February 2022 was €2.9m
(FY2021: €3.9m) of which €0.9m (FY2021: €1.0m) is netted against current liabilities and €2.0m (FY2021: €2.9m) is netted against non-
current liabilities.
Terms and debt repayment schedule
Currency
Nominal rates of interest at 28
February 2022 Year of maturity
2022
Carrying value
2021
Carrying value
Group €m €m
Unsecured loans repayable by one repayment
on maturity Multi Euribor/Sonia + 2.4% 2024 76.0 24 3.1
Unsecured loans repayable by instalment Euro Euribor + 2.85% 2022 37. 5 82.5
Unsecured loans repayable by instalment GBP Sonia + 2.0% 2021 - 5.7
Private Placement notes repayable by one
repayment on maturity Euro/GBP 1.6%-2.74% 2030/2032 145.4 142.6
258.9 473.9
Currency
Nominal rates of interest at 28
February 2022 Year of maturity
2022
Carrying value
2021
Carrying value
Company €m €m
Unsecured loans repayable by instalment GBP Sonia + 2.0% 2021 - 5.7
Private Placement notes repayable by one
repayment on maturity Euro/GBP 1.6%-2.74% 2030/2032 145.4 142.6
145.4 148.3
Borrowing facilities
Group
The Group manages its borrowing requirements by entering into committed loan facility agreements and in the prior financial year also
completed the successful issue of new USPP notes which diversifies the Group’s sources of debt finance.
In July 2018, the Group amended and updated its committed €450m multi-currency five year syndicated revolving loan facility and executed
a three-year Euro term loan. Both the multi-currency facility and the Euro term loan were negotiated with eight banks, namely ABN Amro
Bank, Allied Irish Bank, Bank of Ireland, Bank of Scotland, Barclays Bank, HSBC, Rabobank and Ulster Bank. In FY2020 the Group availed
of an option within the Group’s multi-currency revolving loan facility agreement to extend the tenure for a further 364 days from termination
date. The multi-currency facility agreement is therefore now repayable in a single instalment on 11 July 2024. In the prior financial year, the
Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders and the last instalment is now payable on
12 July 2022.
In March 2020, the Group completed the successful issue of new USPP notes. The unsecured notes, denominated in both Euro and
Sterling, have maturities of 10 and 12 years and diversify the Group’s sources of debt finance. The Group’s Euro term loan included
a mandatory prepayment clause from the issuance of any Debt Capital Market instruments however a waiver of the prepayment was
successfully negotiated in addition to a waiver of a July 2020 repayment, as a consequence of COVID-19, which now becomes payable with
the last instalment in July 2022.
Under the terms of the multi-currency facility and the Euro term loan, the Group must pay a commitment fee based on 35% of the applicable
margin on undrawn committed amounts and variable interest on drawn amounts based on variable Euribor/Sonia interest rates plus a
margin, the level of which is dependent on the Net Debt: EBITDA ratio, plus a utilisation fee, the level of which is dependent on percentage
utilisation. The Group may select an interest period of one, two, three or six months.
20. INTEREST BEARING LOANS & BORROWINGS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
209
Notes forming part of the financial statements
(continued)
Under the terms of the USPP, the Group pays a margin of 1.6% with respect to €19.0m USPP notes with a 10 year tenure; 1.73% with respect
to €57.0m USPP notes with a 12 year tenure and 2.74% with respect to £58.0m notes with a 10 year tenure. A waiver fee is payable with
respect to the covenant waivers secured during the current and previous financial year, including a reduced EBITDA fee payable while EBITDA
is below €120.0m and a below investment grade fee payable when the Group’s credit rating is below investment grade. The maximum
payable under the three components is capped at 1.5%.
The Group had further financial indebtedness in the form of non-bank debt of €5.7m at 28 February 2021, which was fully repaid in the current
financial year with the last instalment paid on 3 April 2021.
The Euro term loan and multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility.
All bank loans drawn are unsecured and rank pari passu. All borrowings of the Group are guaranteed by a number of the Group’s
subsidiary undertakings. The USPP allows the early prepayment of the notes at any time subject to the payment of a make whole amount to
compensate the note holders for the interest that would have been received on the notes had they not been prepaid early.
All borrowings of the Group at 28 February 2022 are repayable in full on change of control of the Group.
Company
The Company is an original borrower under the terms of the Group’s Euro term loan and multi-currency revolving credit facility but is not a
borrower in relation to the Group’s Euro term loan and multi-currency revolving credit facility drawn debt at 28 February 2022.
The Company is a borrower with respect to the Group’s USPP notes of €145.4m (FY2021: €142.6m) as at 28 February 2022. Under the terms
of the USPP, the Company pays a margin of 1.6% with respect to €19.0m notes with a 10 year tenure, 1.73% with respect to €57.0m notes
with a 12 year tenure and 2.74% with respect to £58.0m notes with a 10 year tenure. A waiver fee is payable with respect to the covenant
waivers secured during the current and previous financial year, including a reduced EBITDA fee payable while EBITDA is below €120.0m and
a below investment grade fee is payable when the Group’s credit rating is below investment grade. The maximum payable under the three
components is capped at 1.5%.
The Company was also a borrower with respect to the Group’s non-bank debt of €5.7m at 28 February 2021, which was fully repaid in the
current financial year with the last instalment paid on 3 April 2021.
Covenants
As outlined previously, as a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants
from its lending group for FY2021, and these have been extended up to, but not including, the August 2022 test date. Conditional on a
Minimum Equity Raise, the Group's banking covenants were also renegotiated to increase the threshold of the Group’s Net Debt/Adjusted
EBITDA covenant to not exceed 4.5x and to reduce the Interest cover covenant to be not less than 2.5x. The Minimum Equity Raise was
defined as the receipt of at least £125.0m of gross cash proceeds from the issuance of new ordinary shares in the Company including in such
proceeds the gross amount received by the Company upon issuance of any right to acquire any new ordinary shares in the Company. The
Company successfully raised gross cash proceeds of £151m (€176m) in June 2021.
As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have been put
in place. Following the successful Rights Issue, the minimum liquidity requirement and gross debt restriction will remain in place until the
Group is able to show compliance with its original debt covenant levels at the 28 February 2023 or earlier if compliance can be demonstrated,
and, with respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month. A monthly gross
debt cap of €750.0m in FY2021 was also applied which will continue through FY2022 but was reduced to €700.0m in June 2021 post the
successful Rights Issue. The minimum liquidity requirement and a gross debt restriction can be lifted earlier in certain circumstances.
The Group complied with these new minimum liquidity and gross debt requirements during the financial year.
20. INTEREST BEARING LOANS & BORROWINGS (continued)
210 C&C Group plc Annual Report 2022
The Group’s Euro term loan and multi-currency debt facility incorporates the following financial covenants (before the current waivers were
secured):
• Interest cover: The ratio of EBITDA to net interest for a period of twelve months ending on each half-year date will not be less than 3.5:1
• Net debt: EBITDA: The ratio of net debt on each half-year date to EBITDA for a period of twelve months ending on a half-year date will not
exceed 3.5:1
The Company and Group also had covenants with respect to its non-bank financial indebtedness (before the current waivers were secured).
• Interest cover: The ratio of EBITDA to net interest for a period of twelve months ending on each half-year date will not be less than 3.5:1
• Net debt: EBITDA: The ratio of net debt on each half-year date to EBITDA for a period of twelve months ending on a half-year date will not
exceed 3.5:1
There is no effect on the Group’s covenants as a result of implementing IFRS 16 Leases as all covenants are calculated on a pre IFRS 16
Leases adoption basis.
Further information about the Group’s exposure to interest rate, foreign currency and liquidity risk is disclosed in note 24.
21. ANALYSIS OF NET DEBT
1 March 2021
Translation
adjustment
Additions/
disposals/
remeasurement Cash Flow, net
Non-cash
changes 28 February 2022
€m €m €m €m €m €m
Group
Interest bearing loans & borrowings (470.0) ( 7.2) - 222.2 (1.0) (256.0)*
Cash 107.7 2.5 - (45.5) - 64.7
Net debt excluding leases (362.3) (4.7) - 176.7 (1.0) (191.3)
Lease liabilities (note 19) (79.6) (3.2) (19.1) 25.2 (3.3) (80.0)
Net debt including leases (441.9) ( 7.9) (19.1) 201.9 (4.3) (271.3)
* Interest bearing loans & borrowings at 28 February 2022 are net of unamortised issue costs of €2.9m.
1 March 2020
Translation
adjustment
Additions/
disposals/
remeasurement Cash Flow, net
Non-cash
changes 28 February 2021
€m €m €m €m €m €m
Group
Interest bearing loans & borrowings ( 3 57.0 ) (6.3) - (105.5) (1.2) (470.0)*
Cash 123.4 1.7 - (17.4) - 107.7
Net debt excluding leases (233.6) (4.6) - (122.9) (1.2) (362.3)
Lease liabilities (note 19) (93.3) 2.0 ( 7. 3) 22.5 (3.5) (79.6)
Net debt including leases (326.9) (2.6) ( 7. 3) (100.4) (4.7) (441.9)
* Interest bearing loans & borrowings at 28 February 2021 are net of unamortised issue costs of €3.9m.
1 March 2021
Translation
adjustment Cash Flow, net
Non-cash
changes
28 February
2022
€m €m €m €m €m
Company
Interest bearing loans & borrowings (144.4) (3.0) 5.9 (1.0) (142.5)*
Cash 0.7 - (0.6) - 0.1
(143.7) (3.0) 5.3 (1.0) (142.4)
* Interest bearing loans & borrowings at 28 February 2022 are net of unamortised issue costs of €2.9m.
20. INTEREST BEARING LOANS & BORROWINGS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
211
Notes forming part of the financial statements
(continued)
1 March 2020
Translation
adjustment Cash Flow, net
Non-cash
changes 28 February 2021
€m €m €m €m €m
Company
Interest bearing loans & borrowings (13.9) (2.4) (126.9) (1.2) (144.4)*
Cash - - 0.7 - 0.7
(13.9) (2.4) (126.2) (1.2) (143.7)
* Interest bearing loans & borrowings at 28 February 2021 are net of unamortised issue costs of €3.9m.
The non-cash change to the Company and Group’s interest bearing loans and borrowings in the current financial year relates to the
amortisation of issue costs of €1.0m (FY2021: €1.2m). The non-cash changes for the Group’s lease liabilities in the current financial year
relate to discount unwinding of €3.3m (FY2021: €3.5m).
As outlined in further detail in note 27, the Company, together with a number of its subsidiaries, gave a letter of guarantee to secure its
obligations in respect of all debt drawn by the Company and Group at 28 February 2022.
22. RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
2022 2021
Assets Liabilities
Net
(liabilities)/assets Assets Liabilities
Net assets/
(liabilities)
€m €m €m €m €m €m
Group
Property, plant & equipment 2.6 (12.8) (10.2) 2.1 (8.7) (6.6)
Intangible assets 7.2 (9.4) (2.2) 5.3 ( 6.1) (0.8)
Retirement benefits 0.2 (6.3) (6.1) 0.7 (2.5) (1.8)
Trade related items & losses 17.0 (1.7) 15.3 16.5 - 16.5
27.0 (30.2) (3.2) 24.6 (17. 3 ) 7. 3
The Group has not recognised deferred tax in relation to temporary differences applicable to investments in subsidiaries on the basis that
the Group can control the timing and the realisation of these temporary differences and it is unlikely that the temporary differences will
reverse in the foreseeable future. The aggregate amount of temporary differences applicable to investments in subsidiaries and equity
accounted investments, in respect of which deferred tax liabilities have not been recognised, is immaterial on the basis that the participation
exemptions and foreign tax credits should be available such that no material temporary differences arise. There are no other unrecognised
deferred tax liabilities.
€16.5m of deferred tax assets have been recognised at the end of FY2022 in respect of tax losses that require future taxable profits to arise
in excess of profits arising from the reversal of existing temporary differences.Following a forecasting exercise, the Group is estimating
sufficient future taxable profits to recognise these deferred tax assets.
No deferred tax asset has been recognised in respect of certain tax losses incurred by the Group on the basis that the recovery is
considered unlikely in the foreseeable future or due to the complexity and uncertainty of the tax treatment in connection with certain items
giving rise to some of the losses. The cumulative value of such tax losses is €43.1m (FY2021: €49.6m). In the event that sufficient taxable
profits arise or the tax treatment becomes sufficiently certain in the relevant jurisdictions in future years, these losses may be utilised. With
the sale of Vermont Hard Cider Company, the losses in connection with this business expired in 2021/2022 and the majority of the remaining
losses are due to expire in 2035/2038.
Company
The Company had no deferred tax assets or liabilities at 28 February 2022 or at 28 February 2021.
21. ANALYSIS OF NET DEBT (continued)
212 C&C Group plc Annual Report 2022
Analysis of movement in net deferred tax (liabilities)/assets
1 March 2021
Recognised in
Income Statement
Recognised
in Other
Comprehensive
Income
Translation
adjustment 28 February 2022
€m €m €m €m €m
Group
Property, plant & equipment: ROI 0.4 (0.6) - - (0.2)
Property, plant and equipment: other ( 7.0) (2.2) (0.6) (0.2) (10.0)
Trade related items & losses 16.5 (1.5) - 0.3 15.3
Intangible assets (0.8) (1.4) - - (2.2)
Retirement benefits (1.8) - (4.3) - (6.1)
7.3 (5.7) (4.9) 0.1 (3.2)
From 1 April 2023, the UK corporation tax is expected to increase from 19% to 25%. An assessment on the expected unwind of UK deferred
tax assets and UK deferred liabilities has been calculated resulting in a €0.1m credit to the Income Statement and a charge to Statement of
Other Comprehensive Income of €0.5m, which is included in Property, plant and equipment: other.
1 March 2020
Recognised in
Income Statement
Recognised in Other
Comprehensive
Income
Translation
adjustment 28 February 2021
€m €m €m €m €m
Group
Property, plant & equipment: ROI 0.7 (0.3) - - 0.4
Property, plant and equipment: other (6.1) (0.5) (0.2) (0.2) ( 7.0 )
Trade related items & losses 0.9 14.8 - 0.8 16.5
Intangible assets 0.1 (0.9) - - (0.8)
Retirement benefits (0.2) - (1.6) - (1.8)
(4.6) 13.1 (1.8) 0.6 7. 3
23. RETIREMENT BENEFITS
The Group operates a number of defined benefit pension schemes for certain employees, past and present, in the Republic of Ireland (ROI)
and in Northern Ireland (NI), all of which provide pension benefits based on final salary and the assets of which are held in separate trustee
administered funds. The Group closed its defined benefit pension schemes to new members in March 2006 and provides only defined
contribution pension schemes for employees joining the Group since that date. The Group provides permanent health insurance cover for
the benefit of certain employees and separately charges this to the Income Statement.
The defined benefit pension scheme assets are held in separate trustee administered funds to meet long-term pension liabilities to past and
present employees. The trustees of the funds are required to act in the best interest of the funds’ beneficiaries. The appointment of trustees
to the funds is determined by the schemes’ trust documentation. The Group has a policy in relation to its principal staff pension fund that
members of the fund should nominate half of all fund trustees.
There are no active members remaining in the executive defined benefit pension scheme (FY2021: no active members). There are 51 active
members, representing less than 10% of total membership, in the ROI Staff defined benefit pension scheme (FY2021: 52 active members)
and 2 active members in the NI defined benefit pension scheme (FY2021: 2 active members). The Group’s ROI defined benefit pension
reform programme concluded during the financial year ended 29 February 2012 with the Pensions Board issuing a directive under Section
50 of the Pensions Act 1990 to remove the mandatory pension increase rule, which guaranteed 3% per annum increase to certain pensions
in payment, and to replace it with guaranteed pension increases of 2% per annum for each year 2012 to 2015 and thereafter for all future
pension increases to be awarded on a discretionary basis.
22. RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
213
Notes forming part of the financial statements
(continued)
Actuarial valuations – funding requirements
Independent actuarial valuations of the defined benefit pension schemes are carried out on a triennial basis using the attained age method.
The most recently completed actuarial valuations of the ROI defined benefit pension schemes were carried out with an effective date of
1 January 2021 while the date of the most recent actuarial valuation of the NI defined benefit pension scheme was 31 December 2020.
The actuarial valuations are not available for public inspection; however the results of the valuations are advised to members of the various
schemes.
The funding requirements in relation to the Group’s ROI defined benefit pension schemes are assessed at each valuation date and are
implemented in accordance with the advice of the actuaries. Arising from the formal actuarial valuations of the Group’s staff defined benefit
pension scheme, the Group has committed to contributions of €418,000 per annum commencing in 2021 and increasing at a rate of 1.4%
each year thereafter. This will be reviewed at the next actuarial valuation, which is due in the normal course of events at 1 January 2024.
There is no funding requirement with respect to the Group’s ROI executive defined benefit pension scheme or the Group’s NI defined benefit
pension scheme, both of which are in surplus. The Group has an unconditional right to any surplus remaining in these schemes in the event
the scheme concludes.
The Group is exposed to a number of risks in relation to the funding position of these schemes, namely:
Asset volatility: It is the Group’s intention to pursue a long-term investment policy that emphasises investment in secure monetary assets to
provide for the contractual benefits payable to members. The investment portfolio has exposure to equities, other growth assets and fixed
interest investments, the returns from which are uncertain and may fluctuate significantly in line with market movements. Assets held are
valued at fair value using bid prices where relevant.
Discount rate: The discount rate is the rate of interest used to discount post-employment benefit obligations and is determined by reference
to market yields at the balance sheet date on high quality corporate bonds with a currency and term consistent with the currency and
estimated term of the Group’s post-employment benefit obligations. Movements in discount rates have a significant impact on the value of
the schemes’ liabilities.
Longevity: The value of the defined benefit obligations is influenced by demographic factors such as mortality experience and retirement
patterns. Changes to life expectancy have a significant impact on the value of the schemes’ liabilities.
Method and assumptions
The schemes’ independent actuary, Mercer (Ireland) Limited, has employed the projected unit credit method to determine the present value
of the defined benefit obligations arising and the related current service cost.
The financial assumptions that have the most significant impact on the results of the actuarial valuations are those relating to the discount
rate used to convert future pension liabilities to current values and the rate of inflation/salary increase. These and other assumptions used to
determine the retirement benefits and current service cost under IAS19(R) Employee Benefits are set out below.
Mortality rates also have a significant impact on the actuarial valuations, as the number of deaths within the scheme have been too small to
analyse and produce any meaningful scheme-specific estimates of future levels of mortality, the rates used have been based on the most
up-to-date mortality tables, (the S3PMA CMI 2019 1.5% (males) and S3PFA CMI 2019 1.5% (females) for the ROI schemes and S3PMA CMI
2020 1.5%(males) and S3PFA CMI 2020 1.5% (females) for the NI scheme) with age ratings and loading factors to allow for future mortality
improvements. These tables conform to best practice. The growing trend for people to live longer and the expectation that this will continue
has been reflected in the mortality assumptions used for this valuation as indicated below. This assumption will continue to be monitored in
light of general trends in mortality experience. Based on these tables, the assumed life expectations on retirement are:
23. RETIREMENT BENEFITS (continued)
214 C&C Group plc Annual Report 2022
ROI NI
2022 2021 2022 2021
Future life expectations at age 65 No. of years No. of years No. of years No. of years
Current retirees – no allowance for future improvements Male 22.5-23.3 22.6-23.5 22.4 22.6
Female 24.2-25.1 24.5-25.4 24.2 24.5
Future retirees – with allowance for future improvements Male 23.2-24.1 23.5-24.3 24.0 24.4
Female 25.2-26.0 25.5-26.3 26.0 26.3
Scheme liabilities
The average age of active members is 51 and 50 years (FY2021: 50 and 51 years) for the ROI Staff and the NI defined benefit pension
schemes respectively (the executive defined benefit pension scheme has no active members), while the average duration of liabilities ranges
from 13 to 22 years (FY2021: 14 to 23 years).
The principal long-term financial assumptions used by the Group’s actuaries in the computation of the defined benefit liabilities arising on
pension schemes as at 28 February 2022 and 28 February 2021 are as follows:
2022 2021
ROI NI ROI NI
Salary increases 0.0%-2.6% 4.0% 0.0%-2.3% 3.6%
Increases to pensions in payment 2.0% 2.0% 1.6%-1.7% 1.9%
Discount rate 1.8%-2.0% 2.6% 1.3%-1.5% 2.2%
Inflation rate 1.6%-1.7% 3.6% 1.6%-1.7% 3.2%
A reduction in discount rate used to value the schemes’ liabilities by 0.25% would increase the valuation of liabilities by €6.9m (FY2021:
€9.7m) while an increase in inflation/salary increase expectations of 0.25% would increase the valuation of liabilities by €7.4m (FY2021:
€9.5m). The sensitivity is calculated by changing the individual assumption while holding all other assumptions constant.
The pension assets and liabilities have been prepared in accordance with IAS19(R) Employee Benefits.
(a) Impact on Income Statement
2022 2021
ROI NI Tota l ROI NI Tot al
€m €m €m €m €m €m
Analysis of defined benefit pension
expense:
Current service cost (0.7) - (0.7) (0.8) - (0.8)
Interest cost on scheme liabilities (2.6) (0.2) (2.8) (1.9) (0.2) (2.1)
Interest income on scheme assets 2.6 0.2 2.8 1.8 0.2 2.0
Total (expense)/income recognised in Income
Statement (0.7) - (0.7) (0.9) - (0.9)
23. RETIREMENT BENEFITS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
215
Notes forming part of the financial statements
(continued)
Analysis of amount recognised in Other Comprehensive Income:
2022 2021
ROI NI Tota l ROI NI Tot al
€m €m €m €m €m €m
Actual return on scheme assets 13.4 0.7 14.1 6.1 - 6.1
Expected interest income on scheme assets (2.6) (0.2) (2.8) (1.8) (0.2) (2.0)
Experience gains and losses on scheme
liabilities 12.2 - 12.2 2.7 - 2.7
Effect on changes in financial assumptions 5.9 0.3 6.2 6.5 0.1 6.6
Effect of changes in demographic assumptions 2.9 0.2 3.1 - - -
Total income/(expense) 31.8 1.0 32.8 13.5 (0.1) 13.4
Scheme assets 195.1 14.4 209.5 18 7.1 13.7 200.8
Scheme liabilities (164.0) (7. 9) (171.9) (187.5) (8.4) (195.9)
Deficit in scheme - - - (5.5) - (5.5)
Surplus in scheme 31.1 6.5 37.6 5.1 5.3 10.4
(b) Impact on Balance Sheet
The retirement benefits deficit at 28 February 2022 and 28 February 2021 is analysed as follows:
Analysis of net pension deficit:
2022 2021
ROI NI Tota l ROI NI Tot al
€m €m €m €m €m €m
Investments quoted in active markets
Bid value of assets at end of year:
Equity* 35.7 2.9 38.6 40.0 2.9 42.9
Bonds 120.9 11.4 132.3 107.9 10.8 118.7
Alternatives 23.1 - 23.1 26.5 - 26.5
Cash 2.4 0.1 2.5 0.2 - 0.2
Investments unquoted
Property 13.0 - 13.0 12.5 - 12.5
195.1 14.4 209.5 187.1 13.7 200.8
Actuarial value of scheme liabilities (164.0) ( 7.9 ) (171.9) (187.5) (8.4) (195.9)
Deficit in the scheme - - - (5.5) - (5.5)
Surplus in the scheme 31.1 6.5 37.6 5.1 5.3 10.4
Surplus/(deficit) in the scheme 31.1 6.5 37.6 (0.4) 5.3 4.9
Related deferred tax asset (note 22) - - - 0.7 - 0.7
Related deferred tax liability (note 22) (4.0) (2.1) (6.1) (0.7) (1.8) (2.5)
Net pension surplus/(deficit) 27.1 4.4 31.5 (0.4) 3.5 3.1
*The defined benefit pension schemes have a passive self-investment in C&C Group plc of €nil (FY2021: €nil).
The alternative investment category includes investments in various asset classes including equities, commodities, currencies and funds.
The investments are managed by fund managers.
23. RETIREMENT BENEFITS (continued)
216 C&C Group plc Annual Report 2022
Reconciliation of scheme assets
2022 2021
ROI NI Total ROI NI Total
€m €m €m €m €m €m
Assets at beginning of year 187.1 13.7 200.8 186.8 14.1 200.9
Movement in year:
Translation adjustment - 0.6 0.6 - (0.3) (0.3)
Expected interest income on scheme assets 2.6 0.2 2.8 1.8 0.2 2.0
Actual return less interest income on scheme assets 10.8 0.5 11.3 4.3 (0.2) 4.1
Employer contributions 0.4 - 0.4 0.4 - 0.4
Member contributions 0.2 - 0.2 0.1 - 0.1
Benefit payments (6.0) (0.6) (6.6) (6.3) ( 0.1) (6.4)
Assets at end of year 195.1 14.4 209.5 187.1 13.7 200.8
The expected employer contributions to fund defined benefit scheme obligations for year ending 28 February 2022 is €0.4m.
The scheme assets had the following investment profile at the year-end:
2022 2021
ROI NI ROI NI
Investments quoted in active markets
Equities 18% 20% 21% 21%
Bonds 62% 80% 58% 79%
Alternatives 12% - 14% -
Cash 1% - - -
Investments unquoted
Property 7% - 7% -
100% 100% 100% 100%
Reconciliation of actuarial value of scheme liabilities
2022 2021
ROI NI Tot al ROI NI Total
€m €m €m €m €m €m
Liabilities at beginning of year 187.5 8.4 195.9 200.2 8.6 208.8
Movement in year:
Translation adjustment - 0.4 0.4 - (0.2) (0.2)
Current service cost 0.7 - 0.7 0.8 - 0.8
Interest cost on scheme liabilities 2.6 0.2 2.8 1.9 0.2 2.1
Member contributions 0.2 - 0.2 0.1 - 0.1
Actuarial (gain)/loss immediately recognised in equity (21.0) (0.5) (21.5) (9.2) (0.1) (9.3)
Benefit payments (6.0) (0.6) (6.6) (6.3) (0.1) (6.4)
Liabilities at end of year 164.0 7.9 171.9 187. 5 8.4 195.9
23. RETIREMENT BENEFITS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
217
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group’s multinational operations expose it to various financial risks in the ordinary course of business that include credit risk, liquidity
risk, commodity price risk, currency risk and interest rate risk. This note discusses the Group’s exposure to each of these financial risks and
summarises the risk management strategy for managing these risks. The note is presented as follows:
(a) Overview of the Group’s risk exposures and management strategy
(b) Financial assets and liabilities as at 28 February 2022/28 February 2021 and determination of fair value
(c) Market risk
(d) Credit risk
(e) Liquidity risk
(a) Overview of the Group’s risk exposures and management strategy
The main financial market risks that the Group is exposed to include foreign currency exchange rate risk, commodity price fluctuations,
interest rate risk and financial counterparty creditworthiness. The Board continues to monitor and manage this and all other financial risks
faced by the Group closely.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. This is
executed through various committees to which the Board has delegated appropriate levels of authority. An essential part of this framework
is the role undertaken by the Audit Committee, supported by the internal audit function, and the Group Chief Financial Officer. The Board,
through its Committees, has reviewed the internal control environment and the risk management systems and process for identifying and
evaluating the significant risks affecting the business and the policies and procedures by which these risks will be managed effectively. The
Board has embedded these structures and procedures throughout the Group and considers them to be a robust and efficient mechanism
for creating a culture of risk awareness at every level of management.
The Group’s risk management programme seeks to minimise the potential adverse effects, arising from fluctuations in financial markets, on
the Group’s financial performance in a non-speculative manner at a reasonable cost when economically viable to do so. The Group achieves
the management of these risks in part, where appropriate, through the use of derivative financial instruments. All derivative financial contracts
entered into in this regard are in liquid markets with credit-worthy parties. Treasury activities are performed within strict terms of reference
that have been approved by the Board. See currency risk section for further details.
(b) Financial assets and liabilities
The carrying and fair values of financial assets and liabilities by measurement category were as follows:
Other financial
assets
Other financial
liabilities Carrying value Fair value
€m €m €m €m
Group
28 February 2022
Financial assets:
Cash 64.7 - 64.7 64.7
Trade receivables 147.5 - 147.5 147.5
Advances to customers 43.0 - 43.0 43.0
Financial liabilities:
Interest bearing loans & borrowings - (256.0) (256.0) (258.9)
Derivative contracts - (0.1) (0.1) (0.1)
Trade & other payables - (386.1) (386.1) (386.1)
Provisions - (12.1) (12.1) (12.1)
255.2 (654.3) (399.1) (402.0)
218 C&C Group plc Annual Report 2022
Other financial
assets
Other financial
liabilities Carrying value Fair value
€m €m €m €m
Group
28 February 2021
Financial assets:
Cash 107.7 - 107.7 107.7
Trade receivables 75.9 - 75.9 75.9
Advances to customers 42.1 - 42.1 42.1
Financial liabilities:
Interest bearing loans & borrowings - (470.0) (470.0) (473.9)
Trade & other payables - (296.2) (296.2) (296.2)
Provisions - (12.7) (12.7) (12.7)
225.7 (778.9) (553.2) (5 57.1)
Other financial
assets
Other financial
liabilities Carrying value Fair value
€m €m €m €m
Company
28 February 2022
Financial assets:
Cash 0.1 - 0.1 0.1
Amounts due from Group undertakings 114.7 - 114.7 114.7
Financial liabilities:
Interest bearing loans & borrowings - (142.5) (142.5) (145.4)
Amounts due to Group undertakings - (49.7) (49.7) (49.7)
Accruals - (2.9) (2.9) (2.9)
114.8 (195.1) (80.3) (83.2)
Other financial
assets
Other financial
liabilities Carrying value Fair value
€m €m €m €m
Company
28 February 2021
Financial assets:
Cash 0.7 - 0.7 0.7
Amounts due from Group undertakings 118.6 - 118 .6 118.6
Financial liabilities:
Interest bearing loans & borrowings - (144.4) (144.4) (148.3)
Amounts due to Group undertakings - (33.9) (33.9) (33.9)
Accruals - (3.1) (3.1) (3.1)
119.3 (181.4) (62.1) (66.0)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
219
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Determination of Fair Value
Set out below are the main methods and assumptions used in estimating the fair values of the Group’s financial assets and liabilities. There is
no material difference between the fair value of financial assets and liabilities falling due within one year and their carrying amount as due to
the short-term maturity of these financial assets and liabilities their carrying amount is deemed to approximate fair value.
Short-term bank deposits and cash
The nominal amount of all short-term bank deposits and cash is deemed to reflect fair value at the balance sheet date.
Advances to customers
Advances to customers adjusted for advances of discount prepaid is considered to reflect fair value.
Trade & other receivables/payables
The nominal amount of all trade & other receivables/payables after provision for impairment is deemed to reflect fair value at the balance
sheet date with the exception of provisions which are discounted to fair value.
Interest bearing loans & borrowings
The fair value of all interest bearing loans & borrowings has been calculated by discounting all future cash flows to their present value using a
market rate reflecting the Group’s cost of borrowing at the balance sheet date.
(c) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates and interest rates, will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return on risk.
Commodity price risk
The Group is exposed to variability in the price of commodities used in the production or in the packaging of finished products, such
as apples, glass, barley, aluminium, polymer, wheat and sugar/glucose. Commodity price risk is managed, where economically viable,
through fixed price contracts with suppliers incorporating appropriate commodity hedging and pricing mechanisms. The Group does not
directly enter into commodity hedge contracts. The cost of production is also sensitive to variability in the price of energy, primarily gas and
electricity. It is Group policy to fix the cost of a certain level of its energy requirement through fixed price contractual arrangements directly
with its energy suppliers.
Currency risk
The Company’s functional and reporting currency is Euro. The Euro is also the Group’s reporting currency and the currency used for
all planning and budgetary purposes. The Group is exposed to currency risk in relation to sales and purchase transactions by Group
companies in currencies other than their functional currency (transaction risk), and fluctuations in the Euro value of the Group’s net
investment in foreign currency (primarily Sterling) denominated subsidiary undertakings (translation risk). Currency exposures for the entire
Group are managed and controlled centrally. The Group seeks to minimise its foreign currency transaction exposure, when possible, by
offsetting the foreign currency input costs against the same foreign currency receipts, creating a natural hedge. When the remaining net
currency exposure is material, the Group enters into foreign currency forward contracts to mitigate and protect against adverse movements
in currency risk and remove uncertainty over the foreign currency equivalent cash flows. At 28 February 2022 the Group had €22.2m of
forward foreign currency cash flow hedges outstanding (FY2021: €nil).
In addition, the Group has a number of long-term intra-group loans for which settlement is neither planned nor likely to happen in the
foreseeable future, and as a consequence of which are deemed quasi equity in nature and are therefore part of the Group’s net investment
in its foreign operations. The Group does not hedge the translation exposure arising on the translation of the profits of foreign currency
subsidiaries.
The net currency gains and losses on transactional currency exposures are recognised in the Income Statement and the changes arising
from fluctuations in the Euro value of the Group’s net investment in foreign operations are reported separately within Other Comprehensive
Income.
220 C&C Group plc Annual Report 2022
2022
€m
2021
€m
Derivatives
Cash flow hedges – currency forwards (0.1) -
Total (0.1) -
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do not meet the
hedge accounting criteria, they are classified as “held for trading” for accounting purposes and are accounted for at fair value through the
Income Statement. They are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after the
end of the reporting period.
2022
€m
2021
€m
Hedging reserves
Opening balance 1 March - 0.3
Change in fair value of hedging recognised in Other Comprehensive Income for the year (0.1) 0.3
Reclass to retained earnings - (0.6)
Closing balance 28 February – continuing hedges (0.1) -
Hedge ineffectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments,
to ensure that an economic relationship exists between the hedged item and hedging instrument.
For hedges of foreign currency purchases, the Group enters into hedge relationships where the critical terms of the hedging instrument
match exactly with the terms of the hedged item. The Group therefore performs a qualitative assessment of effectiveness. If changes in
circumstances affect the terms of the hedged item, such that the critical terms no longer match exactly with the critical terms of the hedging
instrument, the Group uses the hypothetical derivative method to assess effectiveness.
In hedges of foreign currency purchases, ineffectiveness might arise if the timing of the forecast transaction changes from what was
originally estimated, or if a degree of forecast purchases are no longer highly probable to occur. The hedging ratio is 1:1 as the quantity of
purchases designated matches the notional amount of the hedging instrument.
No ineffectiveness was recognised in the Income Statement in the current or prior financial year.
The currency profile of the Group and Company’s financial instruments subject to transactional exposure as at 28 February 2022 is as
follows:
Euro Sterling USD CAD/AUD NZD SGD Not at risk Total
€m €m €m €m €m €m €m €m
Group
Cash 5.7 2.3 3.3 0.3 0.1 0.1 52.9 64.7
Trade receivables 3.5 0.1 1.4 0.4 0.2 - 141.9 147. 5
Advances to customers - - - - - - 43.0 43.0
Interest bearings loans & borrowings - - - - - - (256.0) (256.0)
Lease liabilities - - - - - - (80.0) (80.0)
Trade & other payables (13.7) (14.5) (3.1) (0.3) (1.1) - (353.4) (386.1)
Provisions - - - - - - (12.1) (12.1)
Gross currency exposure (4.5) (12.1) 1.6 0.4 (0.8) 0.1 (463.7) (479.0)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
221
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Sterling Not at risk Total
€m €m €m
Company
Cash - 0.1 0.1
Interest bearing loans & borrowings - (142.5) (142.5)
Net amounts due to Group undertakings 20.0 45.0 65.0
Accruals (1.2) (1.7) (2.9)
Total 18.8 (99.1) (80.3)
The currency profile of the Group and Company’s financial instruments subject to transactional exposure as at 28 February 2021 is as
follows:
Euro Sterling USD CAD/AUD NZD SGD ZAR Not at risk Total
€m €m €m €m €m €m €m €m €m
Group
Cash 6.2 4.3 2.3 1.8 0.1 0.3 0.8 91.9 107.7
Trade receivables 2.5 3.9 1.3 0.4 - - - 67. 8 75.9
Advances to customers - - - - - - - 42.1 42.1
Interest bearing loans & borrowings - - - - - - - (470.0) (470.0)
Lease liabilities - - - - - - - (79.6) (79.6)
Trade & other payables (12.6) (39.7) (2.4) (0.6) (0.9) - - (240.0) (296.2)
Provisions - - - - - - - (12.7) (12.7)
Gross currency exposure (3.9) (31.5) 1.2 1.6 (0.8) 0.3 0.8 (600.5) (632.8)
USD Sterling Not at risk Total
€m €m €m €m
Company
Cash - - 0.7 0.7
Interest bearing loans & borrowings - (5.7) (138.7) (144.4)
Net amounts due to Group undertakings (0.4) (30.1) 115.2 84.7
Accruals - (1.6) (1.5) (3.1)
Total (0.4) (37.4) (24.3) (62.1)
A 10% strengthening in the Euro against all currencies noted above, based on outstanding financial assets and liabilities at 28 February
2022, would have a €1.4m positive impact (FY2021: €2.9m) on the Income Statement. A 10% weakening in the Euro against all currencies
noted above would have a €1.7m negative effect (FY2021: €3.6m) on the Income Statement. This analysis assumes that all other variables, in
particular interest rates, remain constant.
222 C&C Group plc Annual Report 2022
Interest rate risk
The interest rate profile of the Group and Company’s interest-bearing financial instruments at the reporting date is summarised as follows:
Group Company
2022 2021 2022 2021
€m €m €m €m
Variable/fixed rate instruments
Interest bearing loans & borrowings (258.9) (473.9) (145.4) (148.3)
Cash 64.7 107.7 0.1 0.7
(194.2) (366.2) (145.3) (147.6 )
The Group exposure to interest rate risk arises principally from its long-term debt obligations. A 0.25% increase/decrease in Euribor and
Sonia rates would result in a €0.1m (FY2021: €1.9m) impact on the Income Statement, over the duration of the tenure, with respect to the
interest charge on interest bearing loans & borrowings.
The USPP notes were issued in March 2020 with a fixed interest rate for Euro and GBP notes (except in relation to the Covid margin), the
notes have maturity dates ranging from 2030 to 2032.
(d) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s trade receivables, its cash advances to customers, cash including deposits with banks
and derivative financial instruments contracted with banks. The Group has an indirect exposure to European Sovereigns via its defined
benefit pension scheme investment portfolio. In the context of the Group’s operations, credit risk is mainly influenced by the individual
characteristics of individual counterparties and is not considered particularly concentrated as it primarily arises from a wide and varied
customer base; there are no material dependencies or concentrations of individual customers which would warrant disclosure under IFRS 8
Operating Segments.
The Group has detailed procedures for monitoring and managing the credit risk related to its trade receivables and advances to customers
based on experience, customer track records and historic default rates and forward looking information, such as concentration maturity
and the macroeconomic circumstances within the Group’s primary trading markets. The impact of COVID-19 resulted in the Group booking
exceptional provisions in the prior financial year (note 5).
Generally, individual ‘risk limits’ are set by customer and risk is only accepted above such limits in defined circumstances. A strict credit
assessment is made of all new applicants who request credit-trading terms. The utilisation and revision, where appropriate, of credit limits
is regularly monitored. Impairment provision accounts are used to record impairment losses unless the Group is satisfied that no recovery
of the amount owing is possible. At that point, the amount is considered irrecoverable and is written off directly against the trade receivable/
advance to customer. The Group also manages credit risk through the use of a receivables purchase arrangement, for an element of its
trade receivables. Under the terms of this arrangement, the Group transfers the credit risk, late payment risk and control of the receivables
sold. As at 28 February 2022, the Group’s year end cash had benefited by €84.1m (FY2021: €45.0m) with respect to this purchase
arrangement. The Group’s trade receivables purchase arrangement is not recognised on the Balance Sheet as it meets the de-recognition
criteria under IFRS 9 Financial Instruments.
Advances to customers are generally secured by, amongst others, rights over property or intangible assets, such as the right to take
possession of the premises of the customer. During the financial year, the Group did not exercise their right to take possession of any
material collateral that would require disclosure. At 28 February 2022, the Group held collateral of €1.3m (FY2021: €2.7m) on financial assets
that are credit impaired and recognised no expected credit loss on financial assets of €6.3m (FY2021: €9.8m) due to collateral.
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
223
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Interest rates calculated on repayment/annuity advances are generally based on the risk-free rate plus a margin, which takes into account
the risk profile of the customer and value of security given. The Group establishes an allowance for impairment of customer’s advances that
represents its estimate of potential future losses.
From time to time, the Group holds significant cash balances, which are invested on a short-term basis and disclosed under cash in the
Balance Sheet. Risk of counterparty default arising on short-term cash deposits is controlled within a framework of dealing primarily with
banks who are members of the Group’s banking syndicate, and by limiting the credit exposure to any one of these banks or institutions.
Management does not expect any counterparty to fail to meet its obligations.
The Company also bears credit risk in relation to amounts owed by Group undertakings and from guarantees provided in respect of the
liabilities of wholly owned subsidiaries as disclosed in note 27.
The carrying amount of financial assets, net of impairment provisions represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Group Company
2022 2021 2022 2021
€m €m €m €m
Trade receivables 147. 5 75.9 - -
Advances to customers 43.0 42.1 - -
Amounts due from Group undertakings - - 114.7 118.6
Cash 64.7 107.7 0.1 0.7
255.2 225.7 114.8 119. 3
The ageing of trade receivables and advances to customers together with an analysis of movement in the Group’s impairment provisions
against these receivables are disclosed in note 15. The Group does not have any significant concentrations of risk.
(e) Liquidity risk
Liquidity risk is the risk that the Group or Company will not be able to meet its financial obligations as they fall due.
The Group’s policy is to ensure that sufficient resources are available either from cash balances, cash flows or committed bank facilities to
meet all debt obligations as they fall due. To achieve this, the Group (a) maintains adequate cash balances; (b) prepares detailed 2 year cash
projections; and (c) keeps refinancing options under review. In addition, the Group maintains an overdraft facility that is unsecured.
Cash and liquidity have been a key focus for the Group throughout FY2022. On 26 May 2021, the Group announced a Rights Issue, the
Group successfully completed the Rights Issue in June 2021 raising gross cash proceeds of £151m (€176m). As a result of this, the Group
reduced leverage, improving the Group’s overall liquidity position and providing the Group with the capital structure to both support the
business during further potential disruptions from COVID-19 and to deliver on its strategy.
In March 2020, the Group completed the successful issue of the new USPP notes. The unsecured notes, denominated in both Euro and
Sterling, have maturities of 10 and 12 years and diversify the Group’s sources of debt finance. The Group’s Euro term loan included a
mandatory prepayment clause from the issuance of any Debt Capital Market instruments however, as a consequence of COVID-19, a waiver
of the prepayment was successfully negotiated in addition to a waiver of a July 2020 repayment which now becomes payable with the last
instalment in July 2022.
In July 2018, the Group amended and updated its committed €450m multi-currency five year syndicated revolving loan facility and executed
a three year Euro term loan. Both the multi-currency facility and the Euro term loan were negotiated with eight banks, namely ABN Amro
Bank, Allied Irish Bank, Bank of Ireland, Bank of Scotland, Barclays Bank, HSBC, Rabobank, and Ulster Bank.
224 C&C Group plc Annual Report 2022
In FY2020 the Group availed of an option within the Group’s multi-currency revolving loan facility agreement to extend the tenure for a further
364 days from termination date. The multi-currency facility agreement is therefore now repayable in a single instalment on 11 July 2024.
During the prior financial year, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders and the
last instalment is now payable on 12 July 2022.
The Euro term loan and multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility. At 28 February 2022 the Group had €113.5m drawn down from the term loan and multi-currency revolving facilities (FY2021:
€325.6m), €145.4m drawn down from Private Placement notes (FY2021: €142.6m) and €nil from its non-bank financial indebtedness
(FY2021: €5.7m).
As outlined previously, as a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants
from its lending group for FY2021, and these have been extended up to, but not including, the August 2022 test date. Conditional on a
Minimum Equity Raise, the Group's banking covenants were also renegotiated to increase the threshold of the Group’s Net Debt/Adjusted
EBITDA covenant to not exceed 4.5x and to reduce the Interest cover covenant to be not less than 2.5x. The Minimum Equity Raise was
defined as the receipt of at least £125.0m of gross cash proceeds from the issuance of new ordinary shares in the Company including in
such proceeds the gross amount received by the Company upon issuance of any right to acquire any new ordinary shares in the Company.
The Company successfully raised gross cash proceeds of £151m (€176m) in June 2021.
As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have been
put in place. Following the successful Rights Issue, the minimum liquidity requirement and gross debt restriction will remain in place
until the Group is able to show compliance with its original debt covenant levels at the 28 February 2023 or earlier if compliance can be
demonstrated, and, with respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month.
A monthly gross debt cap of €750.0m in FY2021 was also applied which will continue through FY2022 but was reduced to €700.0m in
June 2021 post the successful Rights Issue. The minimum liquidity requirement and gross debt restriction can be lifted earlier in certain
circumstances.
The Group complied with these new minimum liquidity and gross debt requirements during the financial year.
The Company and Group had further financial indebtedness in the form of non-bank debt of €5.7m at 28 February 2021, which was fully
repaid in the current financial year with the last instalment paid on 3 April 2021.
All bank loans drawn are unsecured and rank pari passu. All borrowings of the Group are guaranteed by a number of the Group’s subsidiary
undertakings. The euro term loan and multi-currency facilities agreement allows the early repayment of debt without incurring additional
charges or penalties. The USPP allows the early prepayment of the notes at any time subject to the payment of a make whole amount to
compensate the note holders for the interest that would have been received on the notes had they not been prepaid early.
All borrowings of the Company and Group at 28 February 2022 are repayable in full on change of control of the Group.
The Company and the Group complied with all covenants at each reporting date in the current and prior financial year. There is no effect
on the Group’s covenants as a result of implementing IFRS 16 Leases in FY2020 as all covenants are calculated on a pre IFRS 16 Leases
adoption basis.
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
225
Notes forming part of the financial statements
(continued)
During the current financial year, the Group also implemented various working capital initiatives, including availing of Government furlough
schemes across the UK and Ireland up to and including May 2021, the Group discontinued the use of furlough in June 2021 when the
business returned to profit. The Group repaid €47.7m (£40.7m) of tax deferrals to the UK tax authorities and €16.6m of tax deferrals to the
Irish tax authorities in FY2022, with €10.7m (£8.9m) to the UK tax authorities and €18.1m to the Irish tax authorities remaining to be repaid in
FY2023. The Group successfully completed an operating cost reduction plan which delivered €18.0m in annualised savings against its pre
COVID-19 cost base.
The following are the contractual maturities of financial liabilities, including interest payments:
Carrying amount
Contractual cash
flows 6 months or less 6 – 12 months 1 – 2 years
Greater than 2
years
€m €m €m €m €m €m
Group
2022
Interest bearing loans & borrowings (256.0) (294.6) (40.6) (2.7) (5.3) (246.0)
Trade & other payables (386.1) (386.1) (386.1) - - -
Lease liabilities (80.0) (86.3) (10.8) (10.9) (16.3) (48.3)
Provisions (12.1) (12.1) (2.0) (5.1) (1.1) (3.9)
Total contracted outflows (734.2) (779.1) (439.5) (18.7) (22.7) (298.2)
Group
2021
Interest bearing loans & borrowings (470.0) (531.6) (35.3) (29.3) (49.9) (417.1)
Trade & other payables (296.2) (296.2) (296.2) - - -
Lease liabilities (79.6) (90.9) (10.9) (10.8) (19.5) (49.7)
Provisions (12.7) (12.7) (3.6) (2.6) (3.3) (3.2)
Total contracted outflows (858.5) (931.4) (346.0) (42.7) (72.7) (470.0)
Company
2022
Interest bearing loans & borrowings (142.5) (173.5) (1.6) (1.6) (3.2) (167.1)
Amounts due to Group undertakings (49.7) (49.7) (49.7) - - -
Accruals (2.9) (2.9) (2.9) - - -
Total contracted outflows (195.1) (226.1) (54.2) (1.6) (3.2) (167.1)
2021
Interest bearing loans & borrowings (144.4) (178.6) ( 7.3 ) (1.6) (3.1) (166.6)
Amounts due to Group undertakings (33.9) (33.9) (33.9) - - -
Accruals (3.1) (3.1) (3.1) - - -
Total contracted outflows (181.4) (215.6) (44.3) (1.6) (3.1) (166.6)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
226 C&C Group plc Annual Report 2022
25. SHARE CAPITAL AND RESERVES
Authorised
Allotted and
called up Authorised
Allotted and
called up
Number Number €m €m
At 28 February 2022
Ordinary shares of €0.01 each 800,000,000 401,913,690* 8.0 4.0
At 28 February 2021
Ordinary shares of €0.01 each 800,000,000 320,480,164** 8.0 3.2
At 29 February 2020
Ordinary shares of €0.01 each 800,000,000 319,495,110* * 8.0 3.2
* Inclusive of 10.7m (3%) treasury shares.
** Inclusive of 10.8m (3%) treasury shares.
All shares in issue carry equal voting and dividend rights.
Reserves
Group
Allotted and called up
Ordinary Shares
2022 2021
‘000 ‘000
As at 1 March 320,480 319,495
Shares issued in respect of options exercised 147 985
Shares issued in Rights Issue 81,287 -
As at 28 February 401,914* 320,480*
* Includes 9.025m shares bought by the Group during the financial year ended 28 February 2015 which continue to be held as Treasury Shares and Ordinary Shares held by the
Trustee of the Employee Trust as outlined below.
Ordinary Shares held by the
Trustee of the Employee Trust
Other
Treasury Shares Total Treasury Shares
2022 2021 2022 2021 2022 2021
‘000 ‘000 ‘000 ‘000 ‘000 ‘000
As at 1 March 1,766 1,785 9,025 9,025
10,791 10,810
Shares disposed of or transferred to Participants (121) (19) - -
(121) (19)
As at 28 February 1,645 1,766 9,025 9,025
10,670 10,791
Movements in the year ended 28 February 2022
All shares held by Kleinwort Benson (Guernsey) Trustees Limited as trustees of the C&C Employee Trust which were neither cancelled nor
disposed of by the Trust at 28 February 2022 continue to be included in the treasury share reserve. During the financial year, 121,382 shares
were sold by the Trustees and are no longer accounted for as treasury shares.
Movements in the year ended 28 February 2021
All shares held by Kleinwort Benson (Guernsey) Trustees Limited as trustees of the C&C Employee Trust which were neither cancelled nor
disposed of by the Trust at 28 February 2021 continued to be included in the treasury share reserve. During the prior financial year, 18,532
shares were sold by the Trustees and are no longer accounted for as treasury shares.
Corporate
Governance
Business
& Strategy
Financial
Statements
227
Notes forming part of the financial statements
(continued)
Share premium – Group
The change in legal parent of the Group on 30 April 2004, as disclosed in detail in that year’s annual report, was accounted for as a reverse
acquisition. This transaction gave rise to a reverse acquisition reserve debit of €703.9m, which, for presentational purposes in the Group
financial statements, has been netted against the share premium in the Balance Sheet.
The current financial year movement primarily relates to the completion of the Rights Issue. This led to an increase in the Group’s share
premium of €175.5m. Also during the current year there was the exercise of share options equating to €0.4m (FY2021: €0.3m).
Share premium – Company
The share premium, as stated in the Company Balance Sheet, represents the premium recognised on shares issued and amounts to
€1,048.2m as at 28 February 2022 (FY2021: €872.3m).
The current year movement primarily relates to the completion of the Rights Issue. This led to an increase in the Company’s share premium
of €175.5m. Also during the current year there was the exercise of share options equating to €0.4m (FY2021: €0.3m).
Other undenominated reserve and capital reserve
These reserves initially arose on the conversion of preference shares into share capital of the Company and other changes and
reorganisations of the Group’s capital structure.
Cash flow hedge reserve
The hedging reserve includes the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to
hedged transactions that have not yet occurred.
Share-based payment reserve
The reserve relates to amounts expensed in the Income Statement in connection with share option grants falling within the scope of IFRS
2 Share-Based Payment, less reclassifications to retained income following exercise/forfeit post vesting or lapse of such share options and
interests, as set out in note 4.
Currency translation reserve
The translation reserve comprises all foreign exchange differences from 1 March 2004, arising from the translation of the Group’s net
investment in its non-Euro denominated operations, including the translation of the profits of such operations from the average exchange rate
for the year to the exchange rate at the Balance Sheet date, as adjusted for the translation of foreign currency borrowings designated as net
investment hedges and long-term intra group loans for which settlement is neither planned nor likely to happen in the foreseeable future, and
as a consequence are deemed quasi equity in nature and are therefore part of the Group’s net investment in foreign operations.
Revaluation reserve
Since 2009 the Group has completed a number of external and internal valuations on its property, plant and equipment. Gains arising from
such revaluations are posted to the Group’s revaluation reserve, unless it reverses a revaluation decrease on the same asset previously
recognised as an expense, where it is first credited to the Income Statement to the extent of the write down. Any decreases in the value of
the Group’s property, plant and equipment as a result of external or internal valuations are recognised in the Income Statement except where
there had been a previously recognised gain in the revaluation reserve as a result of the same asset, in which case, the gain is eliminated
from the revaluation reserve to offset the loss in the first instance.
During the current financial year, as outlined in detail in note 11, the Group engaged external valuers to value the freehold land & buildings
and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow) and Portugal sites. Using the valuation methodologies, this
resulted in a net revaluation gain of €0.6m accounted for in the Income Statement and a gain of €2.5m accounted for within the revaluation
reserve via Other Comprehensive Income.
25. SHARE CAPITAL AND RESERVES (continued)
228 C&C Group plc Annual Report 2022
During the prior financial year, as outlined in detail in note 11, the Group engaged external valuers to value the freehold land & buildings and
plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow) and Portugal sites. Using the valuation methodologies, this resulted
in a net revaluation loss of €1.2m accounted for in the Income Statement and a gain of €0.9m accounted for within the revaluation reserve via
Other Comprehensive Income.
Treasury shares
Included in this reserve is where the Company issued equity share capital under its Joint Share Ownership Plan, which was held in trust by
the Group’s Employee Trust. All interests have now vested or lapsed and all vested interests have now been exercised. Remaining in the Trust
are shares that lapsed and shares that were withheld by the Trust in lieu of some, or all, of the consideration due with respect to exercised
Interests. Also included in the reserve is the purchase of 9,025,000 of the Company’s own shares in the financial year ended 28 February
2015 at an average price of €3.29 per share under the Group’s share buyback programme.
The current and prior year movement in the reserve relates to the sale of excess shares by the Trust to satisfy other share entitlements.
Capital management
The Board’s policy is to maintain a strong capital base so as to safeguard the Group’s ability: to continue as a going concern for the benefit of
shareholders and stakeholders; to maintain investor, creditor and market confidence; and, to sustain the future development of the business
through the optimisation of the value of its debt and equity shareholding balance.
The Board considers capital to comprise of long-term debt and equity. The Board periodically reviews the capital structure of the Group,
considering the cost of capital and the risks associated with each class of capital. The Board approves any material adjustments to the capital
structure in terms of the relative proportions of debt and equity. In order to maintain or adjust the capital structure, the Group may issue new
shares, dispose of assets to reduce debt, alter dividend policy by increasing or reducing the dividend paid to shareholders, return capital to
shareholders and/or buyback shares.
On 26 May 2021, the Group announced a Rights Issue, the Group successfully completed the Rights Issue in June 2021 raising gross cash
proceeds of £151m (€176m). As a result of this, the Group reduced leverage, improving the Group’s overall liquidity position and providing the
Group with the capital structure to both support the business during further potential disruptions from COVID-19 and to deliver on its strategy.
In March 2020, the Group completed the successful issue of the new USPP notes. The unsecured notes, denominated in both Euro and
Sterling, have maturities of 10 and 12 years and diversify the Group’s sources of debt finance. The Group’s Euro term loan included a
mandatory prepayment clause from the issuance of any Debt Capital Market instruments however, as a consequence of COVID-19, a waiver
of the prepayment was successfully negotiated in addition to a waiver of a July 2020 repayment which now becomes payable with the last
instalment in July 2022.
In July 2018, the Group amended and updated its committed €450m multi-currency five year syndicated revolving loan facility and executed a
three year Euro term loan. Both the multi-currency facility and the Euro term loan were negotiated with eight banks, namely ABN Amro Bank,
Allied Irish Bank, Bank of Ireland, Bank of Scotland, Barclays Bank, HSBC, Rabobank, and Ulster Bank.
In FY2020 the Group availed of an option within the Group’s multi-currency revolving loan facility agreement to extend the tenure for a further
364 days from termination date. The multi-currency facility agreement is therefore now repayable in a single instalment on 11 July 2024.
During the prior financial year, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders and the
last instalment is now payable on 12 July 2022.
The Euro term loan and multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility. At 28 February 2022 the Group had €113.5m drawn down from the term loan and multi-currency revolving facilities (FY2021: €325.6m),
€145.4m drawn down from Private Placement notes (FY2021: €142.6m) and €nil from its non-bank financial indebtedness (FY2021: €5.7m).
25. SHARE CAPITAL AND RESERVES (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
229
Notes forming part of the financial statements
(continued)
25. SHARE CAPITAL AND RESERVES (continued)
As outlined previously, as a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants
from its lending group for FY2021, and these have been extended up to, but not including, the August 2022 test date. Conditional on a
Minimum Equity Raise, the Group's banking covenants were also renegotiated to increase the threshold of the Group’s Net Debt/Adjusted
EBITDA covenant to not exceed 4.5x and to reduce the Interest cover covenant to be not less than 2.5x. The Minimum Equity Raise was
defined as the receipt of at least £125.0m of gross cash proceeds from the issuance of new ordinary shares in the Company including in
such proceeds the gross amount received by the Company upon issuance of any right to acquire any new ordinary shares in the Company.
The Company successfully raised gross cash proceeds of £151m (€176m) in June 2021.
As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have been
put in place. Following the successful Rights Issue, the minimum liquidity requirement and a gross debt restriction will remain in place
until the Group is able to show compliance with its original debt covenant levels at the 28 February 2023 or earlier if compliance can be
demonstrated, and, with respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month.
A monthly gross debt cap of €750.0m in FY2021 was also applied which will continue through FY2022 but was reduced to €700.0m in
June 2021 post the successful Rights Issue. The minimum liquidity requirement and the gross debt restriction can be lifted earlier in certain
circumstances.
The Group complied with these new minimum liquidity and gross debt requirements during the financial year.
In respect of the financial year ended 28 February 2022, due to the ongoing impact of COVID-19, no final dividend is being declared and no
interim dividend was paid (FY2021: €nil). Total dividend for the year is €nil (FY2021: €nil).
In the financial year ended 28 February 2015, a subsidiary of the Group invested €30.0m as part of an on-market share buyback
programme, purchasing 9,025,000 of the Company’s shares at an average price of €3.29. All shares acquired as part of this share buyback
programme are held as Treasury shares.
26. COMMITMENTS
(a) Capital commitments
At the year end, the following capital commitments authorised by the Board had not been provided for in the consolidated financial
statements:
2022 2021
€m €m
Contracted 2.8 5.7
Not contracted 14.2 5.0
17.0 10.7
The contracted capital commitments at 28 February 2022 are with respect of contracts that support the Group in achieving its environmental
targets and optimising its operational footprint.
230 C&C Group plc Annual Report 2022
(b) Other commitments
At the year end, the value of contracts placed for future expenditure was:
2022
Apples** Glass Marketing Barley***
Sugar/ glucose Aluminium
Total*
€m €m €m €m
€m €m
€m
Payable in less than one year 4.4 2.2 3.1 8.4 - 2.8 20.9
Payable between 1 and 5 years 8.9 - 5.9 0.6 - - 15.4
Payable greater than 5 years 6.0 - - - - - 6.0
19.3 2.2 9.0 9.0 - 2.8 42.3
* Commitment obligations range from between 1 year to 24 years.
** In the current financial year, the Group exited some commitments regarding Apples and the value of some of the continuing Apple commitments were also revised downwards in
line with the latest estimate of their cost of completion.
*** In the current financial year, the commitments with respect to Barley were revised downwards due to the change in the open market price and consequently the option for the
Group to resell its commitment to the market.
2021
Apples Glass Marketing Barley Sugar/ glucose
Aluminium
Total*
€m €m €m €m €m
€m
€m
Payable in less than one year 6.3 1.7 3.0 7.1 6.3 - 24.4
Payable between 1 and 5 years 12.1 - 7. 5 14.3 - - 33.9
Payable greater than 5 years 17. 9 - - - - - 17. 9
36.3 1.7 10.5 21.4 6.3 - 76.2
* Commitment obligations range from between 1 year to 24 years.
Where the Group has hedged an Input cost, but a market exists for the Group to resell that input cost in the open market, then the Group
does not classify that as a commitment.
27. GUARANTEES AND CONTINGENCIES
Where the Group or subsidiaries enters into financial guarantee contracts to guarantee the indebtedness of other companies or joint
ventures and associates within the Group, the Group/subsidiaries consider these to be insurance arrangements and account for them
as such. The Group/subsidiary treats the guarantee contract as a contingent liability until such time as it becomes probable that it will be
required to make a payment under the guarantee.
As outlined in note 20, the Group has a euro term loan, US Private Placement notes and a multi-currency revolving facility in place at year
end. The Company has US Private Placement notes in place at year end. The Company, together with a number of its subsidiaries, gave a
letter of guarantee to secure its obligations in respect of all borrowings as at 28 February 2022. The actual loans outstanding for the Group at
28 February 2022 amounted to €258.9m (FY2021: €473.9m).
During the financial year ended 28 February 2015, a subsidiary of the Group entered into guarantees in favour of HSBC Bank plc, HSBC
Asset Finance (UK) Limited and HSBC Equipment Finance Limited whereby it guaranteed drawn debt plus interest charges by Drygate
Brewing Company Limited to HSBC Bank plc of up to £540,000 and to HSBC Asset Finance (UK) Limited and HSBC Equipment Finance
Limited of up to £225,000 in aggregate. The guarantees reduce on a pound for pound basis to the extent of capital repayments in respect
of the drawn debt and any amounts realised by the bank pursuant to any security provided in respect of the debt. The Guarantee with
respect to HSBC Bank plc expires on the earlier of eleven years and three months from the date on which the guarantee became effective,
the secured liabilities are repaid, or by mutual agreement with HSBC Bank plc. The Guarantees with HSBC Asset Finance (UK) Limited and
HSBC Equipment Finance Limited expire after the secured liabilities are repaid, or by mutual agreement with HSBC Asset Finance (UK)
Limited and HSBC Equipment Finance Limited respectively.
Pursuant to the provisions of Section 357 of the Companies Act 2014, the Company has guaranteed commitments entered into and liabilities
of certain of its subsidiary undertakings incorporated in the Republic of Ireland for the financial year to 28 February 2022 and as a result such
subsidiaries are exempt from certain filing provisions.
26. COMMITMENTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
231
Notes forming part of the financial statements
(continued)
28. RELATED PARTY TRANSACTIONS
The principal related party relationships requiring disclosure in the consolidated financial statements of the Group under IAS 24 Related Party
Disclosures pertain to the existence of subsidiary undertakings and equity accounted investments, transactions entered into by the Group
with these subsidiary undertakings and equity accounted investments and the identification and compensation of and transactions with key
management personnel.
(a) Group
Transactions
Transactions between the Group and its related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Subsidiary undertakings
The consolidated financial statements include the financial statements of the Company and its subsidiaries. A listing of all subsidiaries
is provided in note 29. Sales to and purchases from subsidiary undertakings, together with outstanding payables and receivables, are
eliminated in the preparation of the consolidated financial statements in accordance with IFRS 10 Consolidated Financial Statements.
Equity accounted investments
See note 13 for details on equity accounted investments.
Loans extended by the Group to equity accounted investments are considered trading in nature and are included within advances to
customers in trade & other receivables (note 15).
Details of transactions with equity accounted investments during the year and related outstanding balances at the year end are as follows:
Joint ventures Associates
2022 2021 2022 2021
€m €m €m €m
Net revenue 1.3 0.9 0.5 0.1
Trade & other receivables 0.5 0.2 - -
Purchases 0.9 0.3 0.5 0.2
Trade & other payables 0.1 - - -
Loans 1.5 1.5 0.9 1.0
All outstanding trading balances with equity accounted investments, which arose from arm’s length transactions, are to be settled in cash
within 60 days of the reporting date.
Key management personnel
For the purposes of the disclosure requirements of IAS 24 Related Party Disclosures, the Group has defined the term ‘key management
personnel’, as its Executive and Non-Executive Directors. Executive Directors participate in the Group’s equity share award schemes (note
4) and are covered for death in service by an insurance policy. Executive Directors may also benefit from medical insurance under a Group
policy (or the Group offers a cash alternative). No other non-cash benefits are provided. Non-Executive Directors do not receive share-based
payments nor post-employment benefits.
232 C&C Group plc Annual Report 2022
Details of key management remuneration, charged to the Income Statement, are as follows:
2022 2021
Number Number
Number of individuals 10 10
€m €m
Salaries and other short-term employee benefits 2.3 1.9
Post-employment benefits 0.1 0.2
Equity settled share-based payment charge/(credit) and related dividend accrual 1.7 (0.7)
Pay in lieu of notice - 0.6
Total 4.1 2.0
During the current and prior financial year, there were no transactions or balances between the Group and its key management personnel or
members of their close family apart from:
• The Group sells stock to Tesco plc, of which Stewart Gilliland is a Non-Executive Director;
• The Group purchases from and sells stock to St Austell Brewery Company Limited, of which Jill Caseberry is a Non-Executive Director;
and
• Also in the current financial year, the Group sold and purchased stock from Britvic plc, of which Emer Finnan is a Non-Executive Director.
All transactions with related parties involve the normal supply of goods or services and are priced on an arm’s length basis.
For the purposes of the Section 305 of the Companies Act 2014, the aggregate gains by Directors on the exercise of share options during
FY2022 was €nil (FY2021: €0.6m).
(b) Company
The Company has a related party relationship with its subsidiary undertakings. Details of the transactions in the year between the Company
and its subsidiary undertakings are as follows:
2022 2021
€m €m
Dividend income - 76.6
Expenses paid on behalf of and recharged by subsidiary undertakings to the Company (2.8) (2.1)
Equity settled share-based payments for employees of subsidiary undertakings 1.5 0.8
(Injection)/drawdown of cash funding and other movements with subsidiary undertakings (16.9) 49.3
28. RELATED PARTY TRANSACTIONS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
233
Notes forming part of the financial statements
(continued)
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS
Notes Nature of business
Class of shares held as at 28 February 2022
(100% unless stated)
Trading subsidiaries
Incorporated and registered in Republic of Ireland
Bulmers Limited (a) (n) Cider Ordinary
C&C Financing DAC (b) (n)
(o)
Financing company Ordinary
C&C Group International Holdings Limited (a) (n) (o) Holding company Ordinary & Convertible
C&C Group Irish Holdings Limited (a) (n) Holding company Ordinary
C&C Group Sterling Holdings Limited (b) (n) Holding company Ordinary
C&C (Holdings) Limited (a) (n) Holding company Ordinary
C&C Management Services Limited (a) (n) Provision of management services 6% Cumulative Preference,
5% Second Non-Cumulative
Preference & Ordinary Stock
C&C Finco Limited (b) (n)
(o)
Financing company Ordinary
Cantrell & Cochrane Limited (a) (n) Holding company Ordinary
Latin American Holdings Limited (b) (n) Holding company Ordinary
M&J Gleeson & Co Unlimited Company (b) (n) Wholesale of drinks Ordinary
Tennent’s Beer Limited (a) (n) Beer Ordinary
The Annerville Financing Company Unlimited
Company
(a) (n) Financing company Ordinary
The Five Lamps Dublin Beer Company Limited (b) (n) Beer Ordinary
Wm. Magner Limited (a) (n) Cider Ordinary
Wm. Magner (Trading) Limited (a) (n) Financing company Ordinary
Bibendum Wine Ireland Limited (b) (n) Wine Ordinary
Incorporated and registered in Northern Ireland
C&C Holdings (NI) Limited (c) Holding company Ordinary
Gleeson N.I. Limited (c) Wholesale of drinks Ordinary
Tennent’s NI Limited (c) Cider and beer Ordinary & 3.25% Cumulative
Preference
Incorporated and registered in England and Wales
Bibendum Group Limited (l) Holding company Ordinary
Bibendum PLB (Topco) Limited (k) Holding company Ordinary
C&C Management Services (UK) Limited (k) Provision of management services Ordinary
Magners GB Limited (k) Cider and beer Ordinary
234 C&C Group plc Annual Report 2022
Notes Nature of business
Class of shares held as at 28 February 2022
(100% unless stated)
Matthew Clark Bibendum (Holdings) Limited (k) Holding company Ordinary
Matthew Clark Bibendum Limited (k) Wholesale of drinks Ordinary
Bibendum Off Trade Limited (l) Wholesale of drinks Ordinary
The Orchard Pig Limited (i) Cider Ordinary
Walker & Wodehouse Wines Limited (l) (p) Wine Ordinary
C&C IP UK Limited (k) Licensing activity Ordinary
The Wondering Wine Company Limited (k) (p) Wine Ordinary
Incorporated and registered in Scotland
Badaboom Limited (d) Marketing Ordinary
Macrocom (1018) Limited (e) Investment Ordinary
Tennent Caledonian Breweries UK Limited (d) Beer and cider Ordinary
Tennent Caledonian Breweries Wholesale Limited (e) Wholesale of drinks Ordinary
Wallaces Express Limited (e) Holding company Ordinary
Wellpark Financing Limited (d) Financing company Ordinary
Incorporated and registered in Luxembourg
C&C IP Sàrl (f) Licensing activity Class A to J Units
C&C IP (No. 2) Sàrl (f) Licensing activity Class A to J Units
C&C Luxembourg Sàrl (f) Holding and financing company Class A to J Units
Incorporated and registered Portugal
Frutíssima - Concentrados de Frutos da Cova da
Beira, Lda
(g) Ingredients Ordinary
Frontierlicious Limitada (g) Orchard management Ordinary
Incredible Prosperity Limitada (g) Orchard management Ordinary
Incorporated and registered in Delaware, US
Vermont Hard Cider Company Holdings, Inc. (h) Holding company Common Stock
Wm. Magner, Inc. (h) Cider Common Stock
Incorporated and registered in Singapore
C&C International (Asia) Pte. Ltd. (j) Sales & Marketing Ordinary
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Corporate
Governance
Business
& Strategy
Financial
Statements
235
Notes forming part of the financial statements
(continued)
Notes Nature of business
Class of shares held as at 28 February 2022
(100% unless stated)
Non-trading subsidiaries
Incorporated and registered in Republic of Ireland
C&C Brands Limited (a) (n) Non-trading Ordinary
C&C Gleeson Group Pension Trust Limited (b) (n) Non-trading Ordinary
C&C Group Pension Trust Limited (a) (n) Non-trading Ordinary
C&C Group Pension Trust (No. 2) Limited (a) (n) Non-trading Ordinary
C&C Profit Sharing Trustee Limited (a) (n) Non-trading Ordinary
Ciscan Net Limited (a) (n) Non-trading Ordinary & A Ordinary
Cooney & Co. Unlimited Company (b) (n)
(q)
Non-trading Ordinary
Cravenby Limited (a) (n) Non-trading Ordinary
Crystal Springs Water Company Limited (b) (n) Non-trading Ordinary
Dowd’s Lane Brewing Company Limited (a) (n) Non-trading Ordinary
Edward and John Burke (1968) Limited (a) (n) Non-trading Ordinary & A Ordinary
Findlater (Wine Merchants) Limited (a) (n) Non-trading Ordinary & A Ordinary
Fruit of the Vine Limited (a) (n) Non-trading Ordinary
Gleeson Logistic Services Limited (b) (n)
(q)
Non-trading Ordinary
Gleeson Wines & Spirits Limited (b) (n) Non-trading Ordinary
Greensleeves Confectionery Limited (b) (n) Non-trading Ordinary, 12% Cumulative
Convertible Redeemable
Preference & 3% Cumulative
Redeemable Convertible
Preference
M.& J. Gleeson (Investments) Limited (b) (n) Non-trading Ordinary
M&J Gleeson Nominees Limited (b) (n) Non-trading Ordinary & Preference
M. and J. Gleeson (Manufacturing) Company u.c. (b) (n) Non-trading Ordinary
M and J Gleeson (Manufacturing) Company Holdings
Limited
(b) (n) Non-trading Ordinary & Non-Voting Ordinary
M and J Gleeson and Company Holdings Limited (b) (n) Non-trading Ordinary
M & J Gleeson Property Development Limited (b) (n)
(q)
Non-trading Ordinary
Magners Irish Cider Limited (a) (n) Non-trading Ordinary
Sceptis Limited (a) (n) Non-trading Ordinary
Showerings (Ireland) Limited (a) (n) Non-trading Ordinary
Tennmel Limited (b) (n)
(q)
Non-trading Ordinary & A-E Non-Voting
Thwaites Limited (a) (n) Non-trading A & B Ordinary
Tipperary Natural Mineral Water Company Holdings
Limited
(b) (n) Non-trading Ordinary
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
236 C&C Group plc Annual Report 2022
Notes Nature of business
Class of shares held as at 28 February 2022
(100% unless stated)
Tipperary Natural Mineral Water (Sales) Holdings
Limited
(b) (n) Non-trading Ordinary
Tipperary Pure Irish Water Unlimited Company (a) (n) Non-trading Ordinary
Vandamin Limited (a) (n) Non-trading A & B Ordinary
Incorporated and registered in Northern Ireland
C&C Profit Sharing Trustee (NI) Limited (c) Non-trading Ordinary
Incorporated and registered in England and Wales
A2 Contractors Limited (k) Non-trading Ordinary
Bibendum Limited (k) Non-trading Ordinary
Bibendum Wine Limited (l) (p) Non-trading Ordinary
Catalyst-PLB Brands Limited (k) Non-trading Ordinary
Chalk Farm Wines Limited (k) Non-trading Ordinary
Elastic Productions Limited (k) Non-trading Ordinary
Gaymer Cider Company Limited (k) Non-trading Ordinary
Instil Drinks Limited (k) Non-trading Ordinary
Matthew Clark and Sons Limited (k) Non-trading Ordinary
Matthew Clark Limited (k) Non-trading Ordinary
Matthew Clark (Scotland) Limited (d) Non-trading Ordinary
Matthew Clark Wholesale Bond Limited (k) Non-trading Ordinary
Mixbury Drinks Limited (k) Non-trading Ordinary
Odyssey Intelligence Limited (k) Non-trading Ordinary
PLB Wines Limited (k) Non-trading Ordinary
The Real Rose Company Limited (k) Non-trading Ordinary
The Wine Studio Limited (k) Non-trading Ordinary
The Yorkshire Fine Wines Company Limited (k) Non-trading Ordinary
West Country Beverages Limited (m) Non-trading Ordinary
Notes (a) – (q)
The address of the registered office of each of the above companies and notes is as follows:
(a) Annerville, Clonmel, Co. Tipperary, E91 NY79, Ireland.
(b) Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702, Ireland.
(c) 6 Aghnatrisk Road, Culcavy, Hillsborough, Co Down, Northern Ireland, BT26 6JJ.
(d) Wellpark Brewery, 161 Duke Street, Glasgow, G31 1JD, Scotland.
(e) Crompton Way, North Newmoor Industrial Estate, Irvine, Strathclyde, KA11 4HU, Scotland.
(f) L-2132 Luxembourg, 18 Avenue Marie-Therese, Luxembourg.
(g) Quinta Da Ferreira De Baxio, Castelo Branco, Fundão Parish, 6230 610 Salgueiro, Portugal.
(h) 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, US.
(i) West Bradley Orchards, West Bradley, Glastonbury, Somerset, BA6 8LT.
(j) 143, Cecil Street, #03-01, GB Building, Singapore – 069542.
(k) Whitchurch Lane, Bristol, BS14 0JZ.
(l) 109A Regents Park Road, London, NW1 8UR.
(m) C/O Tlt, 1 Redcliff Street, Bristol, United Kingdom, BS1 6TP.
(n) Companies covered by Section 357, Companies Act 2014 guarantees (note 27).
(o) Immediate subsidiary of C&C Group plc.
(p) Entities that have availed of the audit exemption set out within Section 479A of the Companies Act 2006.
(q) Struck off on 31st March 2022.
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
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Notes forming part of the financial statements
(continued)
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Equity accounted investments
Notes Nature of business Class of share held as at 28 February 2022
Joint venture
Beck & Scott (Services) Limited (Northern Ireland) (a) Wholesale of drinks Ordinary, 50%
Brady P&C Limited (England) (b)(l) Holding Company Ordinary, 49.9%
Drygate Brewing Company Limited (Scotland) (c) Brewing B Ordinary, 49%
The Irish Brewing Company Limited (Ireland) (d) Non-trading Ordinar y, 45.61%
3 Counties Spirits Limited (Ireland) (e) Spirits Ordinary, 50%
Associate
CVBA Braxatorium Parcensis (f) Brewing 33.33%
Shanter Inns Limited (Scotland) (g) Public houses Ordinary, 33%
Whitewater Brewing Co. Limited (Northern Ireland) (h) Brewing Ordinary, 25%
Financial asset
Jubel Limited (i) Brewing Ordinary, 8%
Innis & Gunn Holdings Limited (j) Brewing 8%
Bramerton Condiments Limited (k) Food and beverage Ordinar y, 1%
Notes: (a) – (k)
The address of the registered office of each of the above equity accounted investments is as follows:
(a) Unit 1, Ravenhill Business Park, Ravenhill Road, Belfast, BT6 8AW, Northern Ireland.
(b) 49 Berkeley Square, 2nd Floor, London W1J 5AZ.
(c) 85 Drygate, Glasgow, G4 0UT, Scotland.
(d) Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702, Ireland.
(e) Gilligan & Co, Silversprings House, Saint Patrick’s Road, Clonmel, Co. Tipperary, E91 NT32, Ireland.
(f) 3001 Leuven-Heverlee, Abdij van Park 7, Belgium.
(g) 230 High Street, Ayr, KA7 1RQ, Scotland.
(h) Lakeside Brae, Castlewellan, Northern Ireland, BT31 9RH.
(i) Office 311 Edinburgh House, 170 Kennington Lane, London, England, SE11 5DP.
(j) 6 Randoplh Crescent, Edniburgh, EH3 7TH.
(k) 5th Floor 14-16 Dowgate Hill, London, England, EC4R 2SU.
(l) On 17 May 2022, the Group announced the sale of its joint venture investment in Brady P&C Limited (“Admiral Taverns”), to Proprium Capital Partners for a total consideration of
€65.8m (£55.0m). Admiral Taverns was classified as an asset held for sale as at 24 February 2022.
238 C&C Group plc Annual Report 2022
30. POST BALANCE SHEET EVENTS
On 17 May 2022, the Group announced the sale of its joint venture investment in Admiral Taverns, to Proprium Capital Partners for a total
consideration of €65.8m (£55.0m). The sale of the shares will be completed and the consideration will be paid during FY2023, subject only to
FCA approval. Admiral Taverns was classified as an asset held for sale as at 24 February 2022.
There were no other events affecting the Group that have occurred since the year end which would require disclosure or amendment of the
consolidated financial statements.
31. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were approved by the Directors on 17 May 2022.
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Adjusted earnings Profit/(loss) for the year attributable to equity shareholders as adjusted for exceptional items
Company C&C Group plc
Constant Currency Prior year revenue, net revenue and operating profit for each of the Group’s reporting segments is
restated to constant exchange rates for transactions by subsidiary undertakings in currencies other
than their functional currency and for translation in relation to the Group’s non-Euro denominated
subsidiaries by revaluing the prior year figures using the current year average foreign currency rates
DWT Dividend Withholding Tax
EBITDA Earnings/(loss) before Interest, Tax, Depreciation and Amortisation charges excluding the Group’s
share of equity accounted investments’ profit/(loss) after tax
Adjusted EBITDA EBITDA as adjusted for exceptional items
EBIT Earnings/(loss) before Interest and Tax
Adjusted EBIT EBIT as adjusted for exceptional items
Effective tax rate (%) Income and deferred tax charges relating to continuing activities before the tax impact of exceptional
items calculated as a percentage of profit/(loss) before tax for continuing activities before exceptional
items and excluding the Group’s share of equity accounted investments’ profit/(loss) after tax
EPS Earnings/(loss) per share
EU European Union
Exceptional Significant items of income and expense within the Group results for the year which by virtue of their
size or nature are disclosed in the Income Statement and related notes as exceptional items
Free Cash Flow Free Cash Flow is a measure that comprises cash flow from operating activities net of capital
investment cash outflows which form part of investing activities. Free Cash Flow highlights the
underlying cash generating performance of the ongoing business
GB Great Britain (i.e. England, Wales and Scotland).
For the purposes of segmental reporting, GB includes all sales executed and managed outside the
Island of Ireland.
Group C&C Group plc and its subsidiaries
HL Hectolitre (100 Litres)
kHL = kilo hectolitre (100,000 litres)
mHL = millions of hectolitres (100 million litres)
IAS International Accounting Standards
IASB International Accounting Standards Board
IFRIC International Financial Reporting Interpretations Committee
IFRS International Financial Reporting Standards as adopted by the EU
Interest cover Calculated by dividing the Group’s EBITDA excluding exceptional items and discontinued activities
by the Group’s interest expense, excluding IFRS 16 Leases finance charges, issue cost write-offs,
fair value movements with respect to derivative financial instruments and unwind of discounts on
provisions, for the same period
Financial Definitions
240 C&C Group plc Annual Report 2022
Export Sales in territories outside of Ireland, Great Britain and North America
LAD Long Alcoholic Drinks
Liquidity Liquidity is defined as cash plus undrawn amounts under the Group’s revolving credit facility
Net debt Net debt comprises borrowings (net of issue costs) less cash plus lease liabilities capitalised under
IFRS 16 Leases
Net debt/EBITDA A measurement of leverage, calculated as the Group’s Net debt divided by its EBITDA excluding
exceptional items and discontinued activities. The net debt to EBITDA ratio is a debt ratio that shows
how many years it would take for the Group to pay back its debt if net debt and EBITDA are held
constant
Net revenue Net revenue is defined by the Group as revenue less excise duty. The duty number disclosed
represents the cash cost of duty paid on the Group’s products. Where goods are bought duty paid
and subsequently sold, the duty element is not included in the duty line but within the cost of goods
sold. Net revenue therefore excludes duty relating to the brewing and packaging of certain products.
Excise duties, which represent a significant proportion of revenue, are set by external regulators over
which the Group has no control and are generally passed on to the consumer
NI Northern Ireland
Non-controlling interest Non-controlling interest is the share of ownership in a subsidiary entity that is not owned by the
Group
Off-trade All venues where drinks are sold for off-premise consumption including shops, supermarkets and
cash & carry outlets selling alcohol for consumption off the premises
On-trade All venues where drinks are sold at retail for on-premise consumption including pubs, hotels and
clubs selling alcohol for consumption on the premises
Operating profit/(loss) Profit/(loss) earned from the Group’s core business operations before net financing and income tax
costs and excluding the Group’s share of equity accounted investments’ profit/(loss) after tax. In line
with the Group’s accounting policies certain items of income and expense are separately classified
as exceptional items on the face of the Income Statement
Operating margin Operating margin is based on operating profit/(loss) before exceptional items and is calculated as a
percentage of net revenue
PPE Property, plant & equipment
Revenue Revenue comprises the fair value of goods supplied to external customers exclusive of intercompany
sales and value added tax, after allowing for discounts, rebates, allowances for customer loyalty and
other pricing related allowances and incentives
ROI Republic of Ireland
TSR Total Shareholder Return
UK United Kingdom (Great Britain and Northern Ireland)
US United States of America
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241
C&C Group plc is an Irish registered company (registered number:
383466). Its ordinary shares are quoted on the London Stock
Exchange (ISIN: IE00B010DT83 SEDOL: B010DT8).
C&C Group plc also has a Level 1 American Depository Receipts
(ADR) programme for which Deutsche Bank acts as depository
(symbol CCGGY). Each ADR share represents three C&C Group plc
ordinary shares.
The authorised share capital of the Company at 28 February 2022
was ordinary 800,000,000 ordinary shares at €0.01 each. The
issued share capital at 28 February 2022 was 401,913,690 ordinary
shares of €0.01 each.
Euroclear Bank
Following the migration in March 2021 of securities settlement in the
securities of Irish registered companies listed on the London Stock
Exchange (such as the Company) and/or Euronext Dublin from the
CREST settlement system to the replacement system, Euroclear
Bank, the Company’s shares are held and transferred in certificated
form (that is, represented by a share certificate) or in electronic form
indirectly through the Euroclear System or through CREST in CDI
(CREST Depository Interest) form. Shareholders have the choice
of holding their shares in electronic form or in the form of share
certificates. Shareholders should consult their stockbroker if they
wish to hold their shares in electronic form.
SHARE PRICE DATA 2022 2021
Share price at year end £2.11 £2.58
2022
Number
2021
Number
No of Shares in issue at year end 401,913,690 320,480,164
Market capitalisation 28 February £848m £827m
Share price movement during the financial year
– high £2.98 £3.36
– low £2.03 £1.45
Shareholder and Other Information
Dividend Payments
The Company may, by ordinary resolution declare dividends in
accordance with the respective rights of shareholders, but no
dividend shall exceed the amount recommended by the Directors.
The Directors may also declare and pay interim dividends if they
believe they are justified by the profits of the Company available for
distribution.
Due to COVID-19 and the impact this had on global economies and
on business generally, the Board concluded it was not appropriate
to pay an interim dividend or a final dividend for FY2022.
Dividend Withholding Tax (‘DWT’) must be deducted from dividends
paid by an Irish resident company, unless a shareholder is entitled to
an exemption and has submitted a properly completed exemption
form to the Company’s Registrars. DWT applies to dividends paid
by way of cash or by way of shares under a scrip dividend scheme
and is deducted at the standard rate of income tax (currently 20%).
Non-resident shareholders and certain Irish companies, trusts,
pension schemes, investment undertakings, companies resident
in any member state of the European Union and charities may be
entitled to claim exemption from DWT. DWT exemption forms may
be obtained from the Irish Revenue Commissioners website: http://
www.revenue.ie/en/tax/dwt/forms/index.html. Shareholders should
note that DWT will be deducted from dividends in cases where a
properly completed exemption form has not been received by the
relevant record date. Shareholders who wish to have their dividend
paid direct to a bank account, by electronic funds transfer, should
contact Link Registrars to obtain a mandate form. Tax vouchers
will be sent to the shareholder’s registered address under this
arrangement.
Holders through Euroclear Bank
Investors who hold their shares via Euroclear Bank or (in CDI form)
through CREST will automatically receive dividends in Euro unless
they elect otherwise.
Certificated shareholders
Shareholders who hold their shares in certificated form will
automatically receive dividends in Euro with the following exceptions:
• Shareholders with an address in the United Kingdom (UK) will
automatically receive dividends in Sterling,
• Shareholders who had previously elected to receive dividends
in a particular currency will continue to receive dividends in that
currency.
Shareholders who wish to receive dividends in a currency other than
that which will be automatically used should contact the Company’s
Registrars.
242 C&C Group plc Annual Report 2022
Electronic Communications
In order to promote a more cost effective and environmentally
friendly approach, the Company provides the Annual Report
electronically to shareholders via the Group’s website and only
sends a printed copy to those who specifically request one.
Shareholders who wish to alter the method by which they receive
communications should contact the Company’s registrar. All
shareholders will continue to receive printed proxy forms, dividend
documentation, shareholder circulars, and, where the Company
deems it appropriate, other documentation by post.
Company Secretary and Registered Office
Mark Chilton, C&C Group plc
Tel: +353 1 506 3900
Registrars
Shareholders with queries concerning their holdings, dividend
information or administrative matters should contact the Company’s
registrars:
Link Registrars Limited (trading as Link Assets Services)
P.O. Box 1110, Maynooth, Co. Kildare (if delivered by post) or;
Block C, Maynooth Business Campus, Maynooth, County Kildare,
W23 F854, Ireland (if delivered by hand)
Tel: +353 1 553 0050
Fax: +353 1 224 0700
Email: enquiries@linkgroup.ie
Website: www.linkassetservices.com
American Depositary Receipts (ADR)
Shareholder with queries concerning their ADR holdings should
contact:
Deutsche Bank Trust Company Americas
C/o American Stock Transfer & Trust Company, 6201 15th Avenue,
Brooklyn, NY 11219.
Tel: Toll free +1 866 249 2593
International +1 718 921 8137
Email: db@astfinancial.com
Investor Relations
FTI Consulting
10 Merrion Square, Dublin 2, D02 DW94
Principal Bankers
ABN Amro Bank
Allied Irish Bank
Bank of Ireland
Bank of Scotland
Barclays Bank
HSBC
Rabobank
Ulster Bank
Solicitors
McCann FitzGerald
Riverside One, Sir John Rogerson’s Quay, Dublin 2, D02 X576
Stockbrokers
Davy
Davy House, 49 Dawson Street, Dublin 2, D02 PY05
Barclays Bank plc
5 The North Colonnade, Canary Wharf, London E14 4BB
Numis Securities Limited
10 Paternoster Square, London, EC4M 7LT
Auditor
Ernst & Young,
Chartered Accountants,
Harcourt Building,
Harcourt Street,
Dublin 2.
Website
Further information on C&C Group plc is available atwww.
candcgroupplc.com
Corporate
Governance
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& Strategy
Financial
Statements
243
Notes
244 C&C Group plc Annual Report 2022
Corporate
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245
sourcedesign.ie
246 C&C Group plc Annual Report 2022
Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702.
www.candcgroupplc.com