Annual Report 2023
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 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.
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.
“Set against a challenging backdrop, we are pleased to
have delivered an improved performance against all financial
measures. While the complex Enterprise Resource Planning
(‘ERP’) system upgrade within our Matthew Clark and Bibendum
businesses has been more disruptive than originally envisaged
and will have a material and we believe non-recurring impact on
the Group’s results in FY2024, it represents a key step towards
our digital transformation process and will, in time, enhance
C&C’s unique position as the pre-eminent brand-led distributor.
C&C’s balance sheet strength together with our inherently strong
free cash flow characteristics has enabled the Group to propose
the reintroduction of an ordinary dividend for the first time since
2019.”
Patrick McMahon
Group Chief Executive Officer & Group Chief Financial Officer
View this report online
candcgroupplc.com
1
Contents
Financial Highlights
Business & Strategy
Executive Chair’s Statement
2
6
7
8
10
20
22
26
28
30
40
50
56
Vision, Purpose and Values
Divisional Structure
Our Engagement with Stakeholders
Group Chief Executive Officer’s Review
Strategic Report - Group Strategy
Strategic Report - Business Model
Strategic Report - How we create sustainable value
Strategic Report - Key Performance Indicators
Strategic Report - Management of Risks and Uncertainties
TCFD Disclosure
Group Chief Financial Officer’s Review
Responsibility Report
Governance
Directors’ Report
80
86
88
Directors and Officers
Corporate Governance Report
100 Audit Committee Report
Results
Net Revenue
€1,689.0m
Increase of 18.4% on a constant currency basis
Operating Profit before Exceptional Items
€84.1m
Operating Profit after Exceptional Items
€83.9m
Balance Sheet
Liquidity
€470.3m
Net Debt/Adjusted EBITDA Including Leases
105 Environmental, Social and Governance Committee Report
1.3x
108 Nomination Committee Report
115 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
170 Notes Forming Part of the Financial Statements
233 Financial Definitions
235 Shareholder and Other Information
Net Debt Including Leases
€152.7m
Cash
Free cash flow conversion before Exceptional
items
64.6%
Free cash flow conversion
60.7%
Corporate GovernanceBusiness & StrategyFinancial Statements 2
Executive Chair’s Statement
“ The Group’s strategy
is focused on three
distinct pillars:
brand strength;
system strength; and
sustainability.”
Ralph Findlay
Executive Chair
In my first year as Chair, I am pleased to
report net revenue for FY2023 of €1,689.0
million which represents an increase
of 18% versus last year on a constant
currency basis(i). Our operating profit before
exceptional items was €84.1 million and our
overall earnings before exceptional items,
interest, tax, share of equity accounted
investments, depreciation and amortisation
was €116.6 million(ii). This excluded an
exceptional operating loss for the year of
€0.2 million. FY2023 basic EPS was 13.3
cent and adjusted diluted EPS(iii) was 13.4
cent.
Our core brands in Scotland and Ireland
have continued to perform strongly, with
both Tennent’s and Bulmers gaining
market share and maintaining their clear
market leading positions(iv). The Group’s
strategy is focused on three distinct pillars:
brand strength; system strength; and
sustainability. During FY2023 we continued
to make significant investment to support
these priorities and to consolidate our
position as the leading brand-led drinks
distributor serving the UK and Ireland
hospitality sectors. 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 invest in systems
with the implementation of a complex
Enterprise Resource Planning (‘ERP’)
system upgrade in our Matthew Clark and
Bibendum (‘MCB’) business in February
2023. The implementation is a key step in
our digital transformation and optimisation
program in GB, designed to enhance the
service we provide to our customers and in
time improve efficiency and maximise our
capacity utilisation through more automated
processes. The implementation process
has taken longer than originally envisaged,
with a consequent material impact on
service and profitability within MCB. The
Group currently expects a one-off impact
of c.€25 million associated with the ERP
system disruption in FY2024, reflecting the
cost associated with restoring service levels
and lost revenue. There is expected to be
a consequential increase in working capital
in FY2024, however net debt(v) / adjusted
EBITDA(ii) is expected to remain within the
Group’s stated range of 1.5x to 2.0x.
We were pleased to announce the disposal
of our 49% shareholding in Admiral Taverns
in May 2022 for total consideration of £55
million, and to have reached a long-term
supply and distribution agreement with
them, including the future supply of our
brands.
C&C Group plc Annual Report 2023
3
Undoubtedly, our
people are at the
very heart of our
success, and I
sincerely thank every
one of my colleagues
for their dedication
and support for our
values of customer
service, quality and
teamwork, and in
navigating the many
challenges we faced
in FY2023.
The inherent strength of our business model
and cash generating characteristics were
evident again in FY2023 with a significant
reduction in net debt(v) to €152.7 million
and a leverage multiple of 1.3x, compared
with €271 million(v) and 3.4x at the end of
FY2022. Today we announce that, subject
to shareholder approval, the Directors have
proposed a final dividend of 3.79 cent per
share to be paid on 21 July 2023 to ordinary
shareholders registered at the close of
business on 9 June 2023. The Group
therefore looks to the future from a position
of financial strength and is equipped with
sufficient liquidity(vi) to execute our long-term
strategy.
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.
Undoubtedly, our people are at the very
heart of our success, and I sincerely
thank every one of my colleagues for their
dedication and support for our values of
customer service, quality and teamwork,
and in navigating the many challenges we
faced in FY2023.
We are committed to supporting our
colleagues’ physical and mental wellbeing,
with some 50 colleagues having received
mental health first aid training by the end
of FY2023, and a commitment to train an
additional 100 colleagues by the end of
FY2024, in collaboration with our training
partners JB Training to offer confidential
support and advice for colleagues who
may need it, when they need it, regardless
of location or role function. This year, we
established four Employee Resource
Groups (ERGs) focused on mental health &
wellbeing, physical health, working parents
and menopause, as well as establishing a
Diversity, Equity & Inclusion Advisory Group.
Our ERGs and Advisory Group are formed
from passionate colleague volunteers
who dedicate their time and commitment
to promoting a culture of diversity and
inclusiveness across our business, many
of whom have personal interest and
experience in these areas, which helps
guide our business and informs decision-
making.
We are members of, and actively
collaborate with, the Portman Group and
Drinkaware to raise awareness of alcohol
harm and to promote the responsible
consumption of alcohol both with our
customers and colleagues. We utilise both
charities’ training resources to educate our
colleagues through online and virtual group
training sessions, which we have made
mandatory for all marketing and commercial
roles, as well as opening e-learning for all
colleague participation.
We are proud to work with the communities
which we serve and in summer 2022,
we announced a three-year partnership
with The Big Issue Group to change
lives through enterprise. The partnership
extends beyond fundraising to volunteering,
mentoring, and offering employment
opportunities to Big Issue Vendors who are
ready to return to the workplace, through
Big Issue Recruit. We have committed to
placing 15 Vendors back in employment
across the Group each year, with our first
placements joining in May 2023.
The Board recognises the need to take
regular temperature checks of employee
engagement to continue to develop our
people, culture and values. The Group
undertakes two employee engagement
surveys each year with the support of
engagement specialists, Workday Peakon.
The results and feedback are reviewed by
managers and by the Board to respond
to areas which require focus in order to
improve our colleagues’ experience at work
and to ensure we channel investment into
the most appropriate areas to improve our
culture. In FY2023, engagement survey
participation rates reached industry-leading
levels and we made significant, positive
improvement on our engagement score.
Corporate GovernanceBusiness & StrategyFinancial Statements
4
Executive Chair’s Statement
(continued)
In addition, our Board met directly with
colleagues from across the business
during FY2023, to establish a forum for
open and honest dialogue and feedback.
This continuous process and review is
fundamental to our commitment to making
C&C a great place to work for everyone.
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 56 to 79.
As part of our commitment to the
responsible consumption of alcohol we
produce a range of no and low alcohol
variants of our leading brands which
we continue to develop and are active
members of both the Portman Group and
Drinkaware.
Protecting our environment remains an
integral part of the Group’s strategy. For
this reason, the Board decided that ESG
considerations should also be part of the
Executive remuneration policy at C&C. With
consideration to the strategic ESG targets
set out for the Group during 2023, and
with guidance from the ESG Committee,
an environmental target has been included
in the performance conditions of the 2022
Long Term Incentive Plan (‘LTIP’). More
details can be found in the Remuneration
Committee Report on pages 115 to 135.
In FY2023, the Group has continued to
progress our Environmental, Social and
Governance agenda. In January 2023,
following a rigorous review and assessment
process, C&C’s efforts to reduce its carbon
footprint and commitment to target setting
and emissions reporting was validated by
the Science Based Targets initiative (SBTi).
C&C has also received an A- rating on
Supplier Engagement from CDP, the global
environmental disclosure system reporting
standard, recognising our strengths in
Supplier Engagement and approach to
tackling Scope 3 emissions.
Capital Allocation
Capital investment during FY2023
continued to be focused on our brands,
our system and sustainability. We finished
FY2023 in a strong position, with net debt(v)
/ adjusted EBITDA(ii) at 1.3x, well below
our previously communicated medium-
term target of less than two times net
debt(v) / adjusted EBITDA(ii). We also exited
the covenant waivers that we had been
operating within, following COVID-19, and
now have significant headroom in our
traditional lending group covenants. We
successfully completed a refinancing with
a five-year committed sustainability-linked
financing facility comprising a €250 million
multi-currency revolving loan facility and a
€100 million non-amortising Euro term loan,
both with a maturity of FY2028. The facility
offers optionality of two 1-year extensions to
the maturity date callable within 12-months
and 24-months of initial drawdown
respectively.
We recognise the importance of dividends
to our Shareholders, and subject to
shareholder approval, the Directors have
proposed a final dividend of 3.79 cent per
share to be paid on 21 July 2023 to ordinary
shareholders registered at the close of
business on 9 June 2023. No interim
dividend was paid with respect to FY2023;
therefore, the Group’s full year dividend will
amount to 3.79 cent per share.
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.
Governance
FY2023 saw further evolution of the Board.
I joined the Board on 1 March 2022 and
succeeded Stewart Gilliland as Non-
Executive Chair of your Company following
the AGM in July 2022. Stewart was an
outstanding Non-Executive Chair and on
behalf of the Board and the entire Group, I
thank Stewart for his contribution over his
10-year tenure. Under Stewart’s leadership,
the Board developed significantly,
successfully integrating and optimising the
Matthew Clark and Bibendum businesses,
diversifying Board membership and leading
the Group’s response to the challenges of
COVID-19.
Post year end, on 19 May 2023, the Group
announced David Forde, had stepped
down as Chief Executive Officer and that
Patrick McMahon, Group Chief Financial
Officer had been appointed Group Chief
Executive Officer. I have been appointed
Executive Chair to support the management
transition as Patrick McMahon will also
retain his responsibilities as Chief Financial
Officer until a new Chief Financial Officer is
appointed.
John Gibney was appointed an
Independent Non-Executive Director on 26
October 2022, strengthening the Board’s
range of skills and experience. John brings
extensive industry experience and has a
deep understanding of the beverage and
hospitality sector in the UK and Ireland. He
also has extensive listed company board
experience in both executive and non-
executive capacities.
During the year, Emer Finnan stepped
down from her position as an Independent
Non-Executive Director, effective 8
February 2023, after an 8-year tenure in
which she made a significant contribution
to the Board including her stewardship of
the Group’s Audit Committee. Following
her appointment as Chair of the Judicial
Appointments Commission, Helen Pitcher
informed the Board that she will not seek
C&C Group plc Annual Report 2023
5
Notes
(i) FY2022 comparative adjusted for constant currency
(FY2022 translated at FY2023 F/X rates).
(ii) Adjusted EBITDA is earnings 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 to
adjusted EBITDA is set out on page 52.
(iii) Adjusted basic/diluted earnings per share (‘EPS’)
excludes exceptional items. Please also see note 9 of
the financial statements.
(iv) NI CGA OPM 28.02.23; ROI CGA OPM 28.02.23;
NielsonIQ Total off-trade including Dunnes &
Discounters 52 weeks to week ending 26.02.23 vs
52 weeks to end Feb 2020; CGA OPM 25.02.23 (GB
Beer & Cider DB); IRI UK off-trade DB to 19.02.23.
(v) Net debt, including leases comprises borrowings
(net of issue costs), lease liabilities capitalised less
cash.
(vi) Liquidity is defined as cash plus undrawn amounts
under the Group’s revolving credit facility.
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 88 to 99.
Looking Forward
As we look forward, resolving the ERP
challenges and restoring customer service
levels is a key priority. We remain vigilant
on the macro-economic challenges and
inflationary environment and will continue
to manage this backdrop by taking
steps, where possible, to minimise the
impact on our customers, consumers,
and shareholders. We are a highly cash
generative business and are well-positioned
to execute our long-term strategy.
Ralph Findlay
Executive Chair
re-election at the Group’s 2023 AGM and
will step down from her position as an
Independent Non-Executive Director at that
point.
Jim Thompson also informed the Board
that he was finding it increasingly difficult to
dedicate the necessary time required as an
Independent Non-Executive Director as he
lives in the US, and therefore would also not
be seeking re-election at the Group’s 2023
AGM. I would like to take this opportunity to
express my and the Board’s appreciation
to David, Emer, Helen and Jim for their
inimitable contributions and wish them well
in their future endeavours.
It is very important that the performance of
the Board, its Committees and individual
Directors is rigorously reviewed. This year,
an externally facilitated effectiveness review
was conducted by Independent Audit
Limited (‘IAL’) (in accordance with the UK
Corporate Governance Code 2018 (‘the
Code’)) and supported by the Company
Secretary. The expertise and independence
of IAL provides me and my colleagues
with a more complete assessment of our
strengths and areas of improvement of
the Board. The results were insightful and
I am pleased to report that key areas of
Board strength were held to be its strong
composition, shared passion, and the
open and collaborative culture within the
Board. Leveraging on our strengths, we
want to ensure that we work as effectively
as possible. There are five areas of
improvement that will form part of our action
plan for FY2024: Board oversight of and
input into strategy, succession planning, risk
and control oversight, meeting dynamics,
and understanding of culture.
Our progress against last year’s areas of
focus, as well as the outcome of this year’s
effectiveness review can be found on pages
97 and 98.
Corporate GovernanceBusiness & StrategyFinancial Statements 6
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
Purpose
Play a role in every drinking
occasion, delivering joy to our
customers and consumers with
remarkable brands and service.
To be the pre-eminent
brand-led drinks distribution
platform, serving the UK
and Ireland drinks markets,
generating stable margins,
delivering strong free cash
flow and returns for our
shareholders.
Our Values
Our Culture
To respect people and our
planet and aim to bring joy to
life, ensuring quality is at the
core of everything we do.
Our Behaviours
Open
Humble
Respectful
Competitive
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
C&C Group plc Annual Report 2023
Divisional Structure
7
Ireland
C&C’s Ireland division includes the financial results from 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, 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-
trades in Ireland. The Group distributes San Miguel 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.
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. Our primary manufacturing plant is the Wellpark Brewery
in Glasgow, with major distribution and administration centres in
Glasgow, Bristol and London.
The division includes Tennent’s Direct, Scotland’s leading drinks
distributor which serves the Scottish on-trade with an unrivalled
range of drinks led by beer and cider, and includes exclusive
distribution of Moët Hennessy products, such as Moët and
Glenmorangie, and UK distribution of international brands Tsingtao
and Menabrea.
The segment includes the financial results from Matthew Clark, the
largest independent distributor to the GB on-trade drinks sector.
Matthew Clark delivers a market leading composite drinks range
across Wine, Spirits, beer, cider, and soft drinks including a number
of exclusive distribution agreements with wine producers and third-
party brands.
In addition, it includes Bibendum, the UK’s leading independent
wine specialist servicing customers across the on-trade,
independent retail (through Walker & Wodehouse) and off-trade
nationwide. Delivering a market leading range of premium wine, a
selection of exclusive globally recognised artisan and innovative
wine producers.
The Group’s Tennent’s Direct, Matthew Clark and Bibendum
distribution businesses operate a nationwide distribution network
serving the independent free trade, national accounts, independent
retail and off-trade customers.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 8
Our Engagement with Stakeholders
We aim to maintain open and positive dialogue with all 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 91.
Area of Focus
Why we engage
How we engage
Employees
Health, safety, and wellbeing
Investment in learning and
development
Promotion of equality,
diversity, and inclusion
Recognition and careers
C&C strategy, culture, and
values
Sustainability
Our colleagues and contractors who work in our business
Our people sit at the heart of
our business. Without them we
would not 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.
Employee communications - weekly and monthly online and
face to face briefings, Regular site visits and roadshows with
Senior Management, Employee engagement surveys, Employee
forums with Non-Executive Directors, Focus on Health and
Wellbeing via healthcare benefits and Employee Resource Groups.
Promote Diversity, Equity, and Inclusion (‘DE&I’) via a Group
wide Advisory Group, Remote and Hybrid working and Right to
Disconnect policies, Employee Assistance Programmes including
Whistleblowing Helpline, Annual Reviews, Learning and Talent
Development programmes, Board level ESG Committee to develop
strategy and Group wide ESG Champions to advocate sustainability.
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. Building on
our existing outreach work and initiatives which have empowered
people from marginalised communities, in September 2022 the
Group announced a three-year partnership with the Big Issue
Group. This tie up is with a social enterprise that aims to change
lives through enterprise and is aligned to C&C’s charitable agenda
around tackling the complex social issues of homelessness,
addiction, poverty, and mental health. We have also introduced a
Group wide volunteering policy, allowing all colleagues time off to
volunteer, whether it be for our Big Issue Community Partnership, or
local charities, community initiatives and causes that are of personal
interest or relevant to our brands and Business Units.
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.
Using award-winning consumer insights via PROOF, our in-house
data and insight business, we develop powerful and unique brand
positions that engage consumers.
On occasions when consumers
choose alcohol, we want them to
“drink better, not more.”
We invest in and nurture our brands, to develop campaigns,
experiences and associations that resonate with consumers.
We utilise the appropriate experiences and channels to reach our
consumers.
Our brands are available and visible in the correct outlets and in the
correct formats to meet every drinking occasion.
We are committed to responsible advertising and marketing.
By training staff and via active engagement and education of
consumers, C&C promotes moderation to reduce the harmful use of
alcohol.
C&C’s core brands are rooted in their communities, and we adopt
the highest Ethical and Sustainable standards in sourcing our
products and services.
The Group continuously innovates by sourcing and developing new
products that meet consumer needs and preferences.
C&C Group plc Annual Report 2023 9
Area of Focus
Why we engage
How we engage
Suppliers
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
Shareholders
and Lenders
Financial performance
Strategic priorities
Corporate governance
Leadership and succession
planning
Executive remuneration policy
Shareholder returns
Environmental and social
commitments and progress
Our partners who supply products and services
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.
The Group has received validation from the Science Based Targets
initiative of our target of ensuring that suppliers and customers
making up 67% of our Scope 3 emissions, will have science-based
targets in place by 2026. The Company, by participating in the CDP
Supply Chain Screening programme, will continuously collaborate
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.
Focus on learning and development to build Ethical and Sustainable
procurement capability across the Group.
Investments in third party innovative and new brands.
Individuals or institutions that own shares in C&C Group plc
or provide financing
Our philosophy is to engage in
regular, open, and transparent
dialogue with our existing and
prospective shareholders and
lenders. We value 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 Executive 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 (ESG) topics. We engage with lenders
primarily through Group Finance and the Group CFO.
The Group has built ESG KPI’s into its most recent Debtor
Securitisation and Refinancing programmes.
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 occasionality, consumer demand and market trends.
The three distinct pillars of C&C’s growth strategy; brand strength,
system strength and sustainability provide a comprehensive “one-
stop shop” for licensed premises owners.
These pillars are underpinned by our offer: dedicated and
passionate people, enhanced customer service and value.
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
To communicate our views to
those who have responsibility
for implementing policy, laws,
and regulations relevant to our
businesses.
Legal and regulatory
compliance
Ongoing dialogue, collaboration on responsible drinking initiatives
and promotion of moderation, strengthening industry standards and
participation in governments’ business and industry advisory groups.
Supporting the introduction of Deposit Return Schemes in Scotland
and the Republic of Ireland.
Contributing to UK Governments’ consultations including Alcohol
Duty Review (UK) and Alcohol Marketing Restrictions and Minimum
Unit Pricing Review (Scotland).
Adopting globally recognised emission reporting standards including
CDP and Science Based Targets Initiative.
Reporting on climate impacts via Taskforce on Climate-Related
Financial Disclosures (‘TCFD').
Engaging openly with UK and Ireland tax authorities.
Corporate GovernanceBusiness & StrategyFinancial Statements 10
Group Chief Executive Officer’s Review
“ Enhancing our Portfolio
with a focus on premium,
strengthening our market-
leading Distribution system
with a genuine commitment
to Sustainability remains
C&C’s three strategic
priorities.”
Patrick McMahon
Group Chief Executive
Officer & Group Chief
Financial Officer
We are pleased with C&C’s performance
in FY2023 despite the various macro
challenges the Group had to navigate,
including rising inflation, a cost-of-living
squeeze for consumers and significant
challenges for our customers as rising costs
challenged their businesses. Following a
solid H1 performance where we delivered
significant revenue and operating profit
growth, coupled with margin expansion,
we had been looking forward to the first
unrestricted on-trade Christmas trading
period for three years. Our focus was
on ensuring we delivered the highest
standard of service and stock availability
over that period to customers, however the
numerous rail (and other) strikes significantly
impacted demand in FY2023. The impact
of the strikes, combined with a general
weakening of consumer demand, due to
the cost-of-living pressures, resulted in our
performance over the key Christmas trading
period being therefore behind expectation.
Despite these challenges, we have
continued to execute our strategy by:
strengthening our portfolio and distribution
system; premiumising 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 ambitious
sustainability commitments.
We are pleased with the performance of
our brands in FY2023 with Tennent’s and
Bulmers gaining share in Scotland and
the Republic of Ireland(i). In Great Britain
the Magners brand continues to recover,
achieving its highest off-trade share in the
past three years(ii). Premiumisation remains
a strategic focus for our business with our
Premium beer brands delivering on-trade
volume growth of 44.1% in the year, albeit
from a low base.
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. I
would like to take this opportunity to thank
every one of my colleagues sincerely for
their dedication and support in navigating
the many challenges we faced in FY2023.
Of course, the health and safety of our
colleagues is our utmost priority and one
which we will continue to invest in to ensure
we continue to provide a safe workplace
for all. We recognise that the needs of
colleagues have evolved post the COVID-19
pandemic, and changes in how we now
work have impacted many colleagues’
wellbeing. We continue to respond to
those needs, actively engaging with our
colleagues, implementing initiatives such
as flexible working policies, four employee
resource groups, as well as enhancements
to our colleague healthcare provision. In
addition, we have trained 50 colleagues,
across all our operations, in mental health
first aid.
We have established a Diversity, Equity, and
Inclusion Advisory Group recently within
C&C who are passionate about ensuring
C&C Group plc Annual Report 2023
11
difference is encouraged and celebrated at
all levels and across all functions within our
company.
We are members of, and actively
collaborate with the Portman Group and
Drinkaware to raise awareness of alcohol
harm and to promote the responsible
consumption of alcohol both with our
customers and colleagues. We utilise both
charities’ training resources to educate our
colleagues through online and virtual group
training sessions.
Financial Performance
C&C’s reported net revenue for FY2023
of €1,689.0 million represents an increase
of 18% versus last year on a constant
currency basis(iii). Our operating profit
before exceptional items in the year was
€84.1 million and our overall earnings
before exceptional items, interest, tax,
depreciation, amortisation charges and
equity accounted investments’ profit after
tax was €116.6 million(iv). This excluded
an exceptional operating loss in the year
of €0.2 million. The FY2023 performance
represents a basic EPS of 13.3c(v) and
adjusted diluted EPS of 13.4c(v).
The Group’s balance sheet strength and
robust cash-generating capabilities are
reflected in a significant reduction in net
debt(xvii) to €152.7 million as of 28 February
2023 and a net debt(xvii) / adjusted EBITDA(iv)
multiple of 1.3x, compared with €271 million
and 3.4x as of 28 February 2022. Given
the strength of our balance sheet and the
Group’s cash generation, the Directors
have proposed, subject to shareholder
approval, a final dividend of 3.79 cent per
share to be paid on 21 July 2023 to ordinary
shareholders registered at the close of
business on 9 June 2023.
The Group has successfully negotiated and
completed a refinancing of the current multi-
currency debt facility agreement. Following
the publication of these FY2023 results, the
Group enters a new five-year sustainability-
linked facility comprised of a €250 million
multi-currency revolving loan facility and a
€100 million non-amortising Euro term loan,
both with a maturity of FY2028. The facility
offers optionality of two 1-year extensions
to the maturity date callable within 12
months and 24 months of initial drawdown
respectively.
Our receivables purchase programme has
contributed €94.1 million to closing cash,
an increase of €13.5 million on a constant
currency basis(iii), as a direct consequence
of increased trading. Total working capital
during FY2023 was an inflow of €1.8 million.
During the financial year, the Group
completed the sale of its joint venture
investment of Admiral Taverns to Proprium
Capital Partners for a total consideration of
€63.6 million (£55.0 million). As part of the
divestment, C&C has negotiated a long-
term branded supply agreement into the
Admiral estate.
Brand Strength
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 10%
of branded net revenue from pre-COVID-19
levels of 5.8% in FY2020. This has resulted
in increased visibility for our brands
with enhanced levels of activity, both in
advertising as well as in-outlet activation.
We have seen a strong performance by
Tennent’s, with total volumes in C&C Great
Britain (‘GB’) up 4.8% in the year, increasing
to 25.8% in the on-trade alone. Tennent’s
continued to gain share in the on-trade in
Scotland during FY2023, with its share of
Total Beer in Scotland up 1.8ppts to 29.6%
in the twelve months ending February
2023(vi). Amongst Mainstream beer brands,
Tennent’s represents 2 in every 3 pints
poured in the on-trade (68.9%)(vii), and
across all beer, it represents 1 in every 2
pints poured in the on-trade(viii). Aided by
our focused marketing investment over the
key Christmas trading period with the TV
campaign “It’s A Wonderful Pint”, in the
off-trade, during the 12 weeks to Christmas
2022, Tennent’s volume share increased to
23.8% which is ahead of Christmas 2021(ix).
The investment behind the brands also
continues to drive positive brand health
scores, with Tennent’s Lager brand index
score reaching 17.8, its highest ever in July
2022(x).
Bulmers volume increased 9.1% in the year,
driven by 57.6% growth in the on-trade
following the removal of COVID-19 related
restrictions. As anticipated, the introduction
of Minimum Unit Pricing (‘MUP’), in the off-
trade, resulted in a volume decline of 10.5%.
The brand’s MAT off-trade cider volume
share has grown, year-on-year, to 56.3%,
which is up significantly on pre-COVID-19
levels (+9.1%) and up 5.8ppts on last year(xi),
aided by the introduction of MUP. In the
on-trade, the latest Bulmers MAT cider
volume share at 63.9% reflects growth in
Bulmers market share of 2.4ppts ahead of
pre-COVID-19 levels and 0.9ppts ahead of
last year (xii).
Magners volume in C&C GB was down
6.4% in the year. As a category, total Cider
volumes within the on and off-trades are
down 5.7% compared to pre-COVID-19(xiii),
however, consumers are shifting back
towards traditional apple cider. Magners
was 6.5% of total Cider sold during the
12 weeks to end of February 2023 in GB
off-trade compared to 6.3% in FY2022(xiv).
This is the highest off-trade share in three
years(ii), showing the ‘always on’ activity
on the brand during the year to drive
reappraisal and penetration, allowed the
brand to grow sales during the Christmas
trading period. Additionally, Orchard Pig,
grew volumes by 78.9% in the year, albeit
from a low base.
Premiumisation remains a strategic focus
for our business and our Premium beer
brands delivered on-trade volume growth
of 44.1% in the year, albeit from a low base.
Menabrea and Heverlee, alongside our
agency and equity for growth premium
brands, Innis & Gunn, Drygate and Jubel,
have continued to grow both volumes and
penetration within our IFT account base
compared to prior year. Heverlee’s brand
awareness continues to grow and the brand
has gained 24.3% in draught HL sold in
Scotland during FY2023 vs FY2022, moving
it from 6.5% of premium lager pints poured
to 10.6%(xv). Menabrea has won a number of
national listings and the brand has delivered
its first above-the-line media campaign
which reached approximately one third of
UK adults.
Corporate GovernanceBusiness & StrategyFinancial Statements 12
Group Chief Executive Officer’s Review
(continued)
Distribution / System Strength
Our market leading on-trade distribution
system continues to strengthen its position
across the UK and Ireland, delivering to
24,000 outlets in FY2023, serving 21.5%
of the UK and Ireland On-Trade. This
is despite the total number of outlets
contracting across the two geographies by
approximately 4,700 outlets in the year(xiv).
Distribution volumes in GB were up 6.4% in
the year, with corresponding net revenues
up 19.5%. Performance over the key
Christmas trading period was negatively
impacted by weakening consumer demand
and the various strikes in Great Britain.
Distribution margins for the full financial year
were 2.9% down from the 4.0% achieved
in H1. Due to seasonality, distribution
margins were always expected to weaken
slightly in the second half of the financial
year but the softer than expected trading
over the Christmas period, combined with
our operational leverage, reduced margins
significantly. The steady state target of 4%
margin for our GB distribution business
remains applicable, in the medium term.
During February 2023, the Group
implemented a complex Enterprise
Resource Planning (‘ERP’) system upgrade
in the Matthew Clark and Bibendum (‘MCB’)
business. The implementation of this
advanced warehousing technology is a key
step in the Group’s digital transformation
of our GB operations, which will enhance
customer service, improve efficiency and
maximise capacity utilisation through more
automated processes. The implementation
process has taken longer than originally
envisaged, with a consequent material
impact on service and profitability within
MCB. As announced on 19 May 2023, the
Group Service levels had largely returned
to normal levels by the end of March 2023,
however continuing system implementation
challenges, impacted by greater seasonal
trading volume, saw a deterioration in
service levels in April 2023. An improvement
through May 2023 is being achieved by
investing in material additional cost and
resources, ahead of a system fix being
implemented to restore service to normal
levels permanently.
The Group currently expects a one-off
impact of c.€25 million associated with the
ERP system disruption in FY2024, reflecting
the cost associated with restoring service
levels and lost revenue. There is expected
to be a consequential increase in working
capital in FY2024, however the net debt(xvii)/
adjusted EBITDA(iv) multiple is expected
to remain within the Group’s stated range
of 1.5x to 2.0x. Excluding the impact on
MCB, the Group is currently performing
in line with management expectations for
FY2024 and the Board is confident in the
Group’s medium and long-term strategy
and prospects.
The Group continues to increase the share
of business which is generated via our
online portal. We remain confident that we
can continue to transition customers from
traditional customer contact centres to
online, increasing the Group’s opportunity
to cross-sell categories, leading to bigger
orders and enhanced revenues.
Sustainability
We recognise the powerful role brands can
play in raising the profile of sustainability
amongst consumers. As one of Ireland’s
most sustainable alcohol brands,
Bulmers has used the brand’s incredible
sustainability credentials to raise awareness
regarding the role of pollinators and
wildflowers in the creation of our cider
brand. Our award winning “No Bees,
No Bulmers” and “Bulmers starts with
a Bee” advertising campaigns, together
with our Bee Hotel and Bulmers Wild
Flowering programmes, have resonated
with consumers, profiled sustainability and
helped increase the brand health scores
for Bulmers. It’s a powerful demonstration
C&C Group plc Annual Report 2023 13
Notes
i. NI CGA OPA 28.02.23; ROI CGA OPM 28.02.23;
NielsonIQ Total off-trade including Dunnes &
Discounters 25 weeks to week ending 26.02.23 vs
52 weeks to end Feb 2020; CGA OPM 25.02.23 (GB
Beer & Cider DB); IRL UK off-trade DB to 19.02.23.
IRI UK off-trade DB MAT 36 months to 19.02.23.
ii.
iii. FY2022 comparative adjusted for constant currency
(FY2022 translated at FY2023 F/X rates)
iv. Adjusted EBITDA is earnings before exceptional
items, finance income, finance expense, tax,
depreciation, amortisation and share of equity
accounted investments’ profit after tax. A
reconciliation of the Group’s operating profit to
adjusted EBITDA is set out on page 52.
v. Adjusted basic/diluted earnings per share (‘EPS’)
excludes exceptional items. Please see note 9 of the
Consolidated Financial Statements.
vi. CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
IRL UK off-trade DB MAT to 19.02.23 combined.
vii. CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
internal analysis.
viii. CGA OPM MAT to 25.02.23 (GB Beer & Cider DB).
ix. IRI UK off-trade DB (all outlets) 12 weeks to 25.12.22
vs one year ago.
x. YouGov Brand Index (Summer 2022).
xi. NielsenIQ, total off-trade including Dunnes &
Discounters 52 weeks to week ending 26.02.23 vs
equivalent 52 weeks to end Feb FY22 and end Feb
FY20.
xii. ROI CGA OPM MAT to 28.02.23 vs equivalent 52
weeks to end Feb FY22 and end Feb FY20.
xiii. CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
IRI UK off-trade DB MAT to 19.02.23 combined vs
equivalent for FY20.
xiv. IRI UK off-trade DB MAT 12 weeks to 19.02.23 vs
equivalent for FY22.
xv. CGA OPM MAT to 25.02.23 (GB Beer & Cider DB),
Scotland only.
xvi. Liquidity is defined as cash plus undrawn amounts
under the Group’s revolving credit facility.
xvii. 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.
of how market leading brands, with great
sustainability credentials can impact society
positively to protect key elements of the
planet!
C&C continues to invest in sustainability
at Wellpark, our Glasgow based
manufacturing facility, where we are
pleased that our sustainability initiatives
delivered the Group’s carbon reduction
objectives for FY2023 with 1,300 tonnes of
carbon removed. We introduced a lighter
weight pint can for FY2023 reducing our
aluminium usage. We continue to focus
on efficiencies at the site to drive down
energy usage where 100% of electricity is
now generated from renewable sources.
Alongside our sustainability initiatives, we
have focused activity on maximising energy
efficiency, reducing both our site usage and
overall carbon footprint. This will ensure that
we have as competitive a manufacturing
cost base as is possible, whilst delivering on
our sustainability commitments at the site.
In Clonmel, we are in the process of
installing a heat pump. The pump will be
operational in FY2024 and will reduce
the site’s gas consumption by 40% and
reduce our CO2 emissions by 1,800 tonnes
per annum. This investment builds on
the investments made in previous years,
including the removal of single-use plastics
in our canned products manufactured; 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 the
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 remuneration, to ensure
alignment between executive incentives,
responsible business and stakeholder
expectations.
Our sustainability commitments and
achievements are disclosed in more detail
on in the Responsibility Report on pages 56
to 79.
Summary and Outlook
As we look forward, resolving the ERP
challenges in Matthew Clark & Bibendum
and restoring customer service is a key
priority. Beyond that, the Group’s priority
continues to be executing its strategy
and we are pleased with the Group’s
resilient performance in FY2023 despite
the challenges presented. Liquidity(xvi) and
net debt(xvii) reduction were a key focus for
the Group throughout FY2023, and the
Group maintains a robust liquidity position
with available liquidity(xvi) of €470.3m at 28
February 2023 and at year end achieved
net debt(xvii)/adjusted EBITDA(iv) of 1.3x. Our
target net debt(xvii)/adjusted EBITDA(iv) level is
between 1.5x and 2.0x. This demonstrates
the inherent strength of our business model,
the resilience of our brands and the ability of
our team.
Looking forward, we remain cautious on the
macro-economic challenges and inflationary
environment, however, with the actions
we have taken to invest in our brands, our
system and our sustainability credentials,
we believe C&C is well positioned to
execute its medium and long-term strategy.
Patrick McMahon
Group Chief Executive Officer & Group
Chief Financial Officer
Corporate GovernanceBusiness & StrategyFinancial Statements
14
Group Chief Executive Officer’s Review
Operating Review
Our brand-led distribution model
and its inherent strengths of
scale and reach is supported by
investment in our brands and in
our system. 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,
remaining agile to adapt and react
to market conditions and customer
requirements.
C&C Group plc Annual Report 2023 15
Operational Highlights
Customer service is core to the Group’s
success as a brand-led distributor and we
were pleased to note that the On Time In
Full (‘OTIF’) rate prior to the ERP system
implementation was 92.2%. Unfortunately
OTIF has been temporarily impacted as a
direct consequence of the system upgrade.
Service levels had largely returned to normal
levels in March however continuing system
implementation challenges, impacted by
greater seasonal trading volume, saw a
deterioration in service levels in April. An
improvement through May is being achieved
by investing material additional cost and
resources, ahead of a system fix being
implemented to restore service to normal
levels permanently.
For the market as a whole, customer numbers
are down 4.4% in GB with our share of the
market in FY2023 down 1.8ppts to 19.2%(iii).
We continue to grow the level of business we
conduct through our e-commerce platforms
and are consistently delivering +70% of our
on-trade revenues through online orders, the
business remains on track to achieve its near-
term target of 80% of on-trade revenue orders
to be captured online. Order values online
continue to be c.15% higher when compared
with traditional contact centre orders.
C&C continues to invest in the sustainability
programme at Wellpark, our Glasgow
based manufacturing facility, where we are
pleased that our environmental initiatives
have delivered the Group’s carbon reduction
objectives for FY2023, resulting in the removal
of 1,300 tonnes of carbon. We introduced a
lighter weight pint can for FY2023 reducing
our aluminium usage. We continue to focus
on driving efficiencies at the site to reduce
energy usage, where 100% of electricity is
now generated from renewable sources.
Our focus on maximising energy efficiency
to reduce both our site usage and overall
carbon footprint, will ensure that we have
as competitive a manufacturing cost base
as possible and ensure we deliver on our
sustainability commitments. Wellpark and
Clonmel have both also retained the British
Retail Consortium AA grade, the highest level
of food safety standards in the UK.
Great Britain
€m Great Britain
Constant currency(i)
Net revenue
of which Branded
- Price / mix impact
- Volume impact
of which Distribution
- Price / mix impact
- Volume impact
of which Co-pack / Other
Operating profit(ii)
Operating margin
of which Branded
of which Distribution
Volume – (kHL)
- of which Tennent’s
- of which Magners
FY2023
FY2022
Change %
1,410.5
192.5
1,203.3
169.2
1,190.9
996.2
27.1
56.0
4.0%
21.5
34.5
4,479
940
567
37.9
29.0
2.4%
21.8
7.2
4,305
897
606
17.2%
13.8%
13.2%
0.6%
19.5%
13.1%
6.4%
(28.5%)
93.1%
1.6ppts
(1.4%)
379.2%
4.0%
4.8%
(6.4%)
Our Great Britain division’s net revenue increased by 17.2% to
€1,410.5m in the year, driven by the full re-opening of the on-
trade and strong growth in our distribution business. Operating
profit was up 93.1% to €56.0m in the year driven by volume,
pricing growth and a more favourable channel mix. Operating
margins increased by 1.6ppts with branded margins at 11.2%
and distribution margin at 2.9%.
Branded margins reflect €6.1m of increased marketing
investment and continuing cost pressures, particularly in
manufacturing overheads. With a challenging market backdrop,
distribution margins in H2 were negatively impacted by a
weaker than expected Christmas trading period, various strikes
and operational leverage. The Group continues to target 4%
distribution margins in the normal course of operations.
Corporate GovernanceBusiness & StrategyFinancial Statements
16
Group Chief Executive Officer’s Review
Operating Review (continued)
Our Premium beer brands delivered on-
trade volume growth of 43.2% in the year,
albeit from a low base. Menabrea and
Heverlee, alongside our agency and equity
for growth premium brands, Innis & Gunn,
Drygate and Jubel, have continued to grow
both volume and penetration within our
IFT account base compared to prior year.
Heverlee’s brand awareness continues to
grow and the brand has gained 24.3% in
draught HL sold in Scotland during FY2023
vs FY2022, moving it from 6.5% of premium
lager pints poured to 10.6%(xiii). Menabrea
has won a number of national listings and
the brand has delivered its first above-
the-line media campaign which reached
approximately one third of UK adults. Both
Heverlee and Menabrea continue to grow
ahead of total beer across on and off-
trade(xiv), driven by increased brand footprint
in the on-trade helping deliver volume into
both brands. Heverlee on-trade volumes
are up 31.0% compared to last year with
Menabrea volumes increasing by 47.3%.
6.5% of total Cider sold during the 12 weeks
to end of February 2023 in GB Off-Trade
compared to 6.3% in FY2022(xi). This is the
highest off-trade share in three years(xii),
showing the ‘always on’ activity on the
brand during the year to drive reappraisal
and penetration, allowed the brand to grow
sales during the Christmas trading period.
Additionally, Orchard Pig grew volumes by
78.9% in the year, albeit from a low base.
Brands
Tennent’s performed strongly, with
volumes up 4.8% in the year including
25.8% in the on-trade. Tennent’s
continued to gain share in the Scottish
on-trade during FY2023, with its share
of total beer in Scotland up 1.8ppts
to 29.6% in the twelve months ended
February 2023(iv) and in the prior four
weeks it gained 3.5ppts (to 32.6%)
(v). Amongst mainstream beer brands,
Tennent’s represents 2 in every 3 pints
poured in the On-Trade (68.9%)(vi), and
across all Beer it represents 1 in every 2
pints poured in the on-trade(vii). Aided by
our focused marketing investment over
the key Christmas trading period with
the TV campaign “It’s A Wonderful Pint”,
in the Off-Trade during the 12 weeks
to Christmas 2022, Tennent’s volume
share increased to 23.8% which is ahead
of Christmas 2021(viii). The investment
behind the brands also continues to
drive positive brand health scores, with
Tennent’s Lager brand index score
reaching 17.8, its highest ever in July
2022(ix).
Magners volume was down 6.4% in the
year. As a category, total Cider volumes
in the on and off-trade are down 5.7%
compared to pre-COVID-19(x); however,
consumers are shifting back towards
traditional apple cider. Magners was
C&C Group plc Annual Report 2023 17
Distribution
International
We were pleased with the performance of
our International Business with volumes up
3.1% in the year on a comparative basis.
Key markets such as Spain saw volumes
return to pre-COVID-19 levels, with volumes
year-on-year increasing by 83.5%. Good
Drinks Australia Ltd, our new distributor, is
already growing distribution in both on and
off-trade and in Italy we look forward to
improving Tennent’s volume back to historic
levels via our new partner Bir.com srl.
Magners remains the primary brand for our
international business accounting for c.80%
of volume.
Distribution volumes were up 6.4% in the
year with corresponding net revenues up
19.5%. Performance over the key Christmas
trading period was negatively impacted
by weakened consumer demand and the
various strikes in Great Britain. Distribution
margins for the full financial year were
2.9% down from the 4.0% achieved in H1
FY2023. Due to seasonality, distribution
margins were always expected to weaken
slightly in the second half of the financial
year but the softer than expected trading
over the Christmas period, combined with
our operational leverage, reduced margins
significantly. The steady state target of 4%
margin for our GB distribution business
remains applicable, in the medium term.
During February 2023, the Group
implemented a complex Enterprise
Resource Planning (‘ERP’) system upgrade
in our Matthew Clark and Bibendum (‘MCB’)
business. The implementation process has
taken longer than originally envisaged, with
a consequent material impact on service
and profitability within MCB. The Group
currently expects a one-off impact of c.€25
million associated with the ERP system
disruption in FY2024, reflecting the cost
associated with restoring service levels and
lost revenue.
Corporate GovernanceBusiness & StrategyFinancial Statements
18
Group Chief Executive Officer’s Review
Operating Review (continued)
Operational Summary
Focused on delivering market-leading
customer service, we are pleased to report
that the average OTIF at the end of February
2023 was 98.1% in the Republic of Ireland
and 97.5% in Northern Ireland. This, as well
as the removal of COVID-19 trade restrictions,
was a key cornerstone underpinning the
revenue and profit growth in FY2023.
MUP, which was introduced in the Republic
of Ireland in January 2022 put in place a
minimum sales price for a unit of alcohol.
MUP was introduced in Scotland in 2018, and
we were able to use the data and learnings
from the Tennent’s brand and apply them to
Bulmers and the rest of our Irish portfolio. We
optimised the off-trade portfolio in preparation
for MUP by introducing new pack sizes,
vessels sizes and ABVs and we are pleased
to report that in the latest MAT volume share
data, our Bulmers brand has performed well
and has increased market share in the off-
trade by 5.8%(xv).
Total on-trade customers are down 0.6% in
the IOI (Island of Ireland) market compared
to the prior year, however C&C’s share of this
market has grown by +0.7pp to 40.4%(xvi).
More of our customers are ordering online
through our ecommerce platform with 81% of
our on-trade customers now ordering online
in February compared to 66% twelve months
ago.
Building on the work undertaken in FY2022
to reduce our Clonmel manufacturing site’s
energy usage, we have commenced work
to install a heat pump at the site. The pump
will be operational at the end of H1 FY2024
and will reduce the site’s gas consumption
by 40% and reduce our CO2 emissions by
1,800 tonnes per annum. This follows the
investment last year to eliminate single use
plastic for all canned products from January
2022, which removed approximately 150
tonnes of plastics from our products and the
investment in the largest rooftop solar panel
farm in Ireland which now generates 10%
of the site’s electricity requirements. Further
enhancing our sustainability credentials,
we are now the only significant drinks
manufacturer to use returnable pint bottles.
Ireland
€m Ireland
Constant currency(i)
Net revenue
of which Branded
- Price / mix impact
- Volume impact
of which Distribution
- Price / mix impact
- Volume impact
of which Co-pack / other
Operating profit(ii)
Operating margin
of which Branded
of which Distribution
Volume – (kHL)
- of which Bulmers
FY2023
278.5
105.9
FY2022
223.8
78.1
170.6
139.5
2.0
28.1
10.1%
20.8
7.3
1,450
360
6.2
18.9
8.4%
13.4
5.5
1,384
330
Change %
24.4%
35.6%
28.8%
6.8%
22.3%
19.9%
2.4%
(67.7%)
48.7%
1.7pts
55.2%
32.7%
4.8%
9.1%
Our Ireland division’s net revenue increased by 24.4% to
€278.5m in the year driven by the re-opening of the on-trade.
Ireland’s operating profit increased by 48.7% to €28.1m
with margins growing to 10.1% from 8.4% last year. A better
channel mix because of the removal of COVID-19 trade
restrictions, the introduction of Minimum Unit Pricing (‘MUP’)
and price increases helped improve margins year-on-year,
despite the inflationary cost pressures being faced by the
business and the increased marketing investment. Branded
margins have grown to 19.6% in FY2023 from 17.2% in
FY2022 despite the impact of increased marketing investment
(72% higher year-on-year) and cost pressures particularly,
manufacturing input costs. Distribution margins have grown to
4.3% from 3.9% last year.
C&C Group plc Annual Report 2023
19
Notes
(i)
FY2022 comparative adjusted for constant
currency (FY2022 translated at FY2023 F/X rates).
Before exceptional items.
(ii)
(iii) CGA GB outlet index Feb 23 vs Feb22.
(iv) CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
IRL UK off-trade DB MAT to 19.02.23 combined.
Ibid.
(v)
(vi) CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
internal analysis.
(vii) CGA OPM MAT to 25.02.23 (GB Beer & Cider DB).
IRI UK off-trade DB (all outlets) 12 weeks to
(viii)
25.12.22 vs one year ago.
(ix) YouGov Brand Index (Summer 2022).
(x) CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
IRL UK off-trade DB MAT to 19.02.23 combined vs
equivalent for FY20.
IRL UK off-trade DB MAT to 19.02.23 vs equivalent
for FY22.
IRL UK off-trade DB MAT 36 months to 19.02.23.
(xii)
(xiii) CGA OPM MAT to 25.02.23 (GB Beer & Cider DB),
(xi)
Scotland only.
(xiv) CGA OPM MAT to 25.02.23 (GB Beer & Cider DB);
IRL UK off-trade DB MAT to 19.02.23 combined.
(xv) NielsonIQ Total off-trade including Dunnes &
Discounters 52 weeks to week ending 26.02.23.
(xvi) CGA IOI Outlet Index Feb 23 vs Feb 22.
(xvii) YouGov Brand Index Bulmers Feb 23 score of
19.9, ahead of nearest cider rival Orchard Thieves
on 14.7; ROI CGA OPM 28.02.23; NielsonIQ Total
off-trade including Dunnes & Discounters 52
weeks to week ending 26.02.23.
(xviii) NielsonIQ Total off-trade including Dunnes &
Discounters 52 weeks to week ending 26.02.23 vs
equivalent 52 weeks to end Feb FY22 and end Feb
FY20.
(xix) ROI CGA OPM MAT to 28.02.23 vs equivalent 52
weeks to end Feb FY22 and end Feb FY20.
(xx) ROI CGA OPM to 28.02.23; NielsonIQ Total off-
trade including Dunnes & Discounters 52 weeks to
week ending 26.02.23.
Brands
Distribution and Wine
Distribution volumes increased 2.4% in
the year, with net revenue growing ahead
of volume at +22.3% aided by both
execution of our core agency premium
beer brands and pricing actions. We
have also grown our wholesale and wine
business year-on-year leveraging our key
system strength as a “one-stop shop”
for our customers as they continue to
expand their consumer offerings post-
COVID-19 (across both wet and food-led
outlets).
C&C took on the distribution of
Budweiser in summer 2020 and at the
time the brand was in MAT lager volume
share decline in the off-trade. We are
pleased to report that this has largely
stabilised with Budweiser MAT off-trade
volume share at 10.0% compared to
9.8% a year ago(xv). This reflects the
focus and investment that has gone into
repositioning the brand with retailers and
consumers.
Bulmers volume increased 9.1% in the year,
driven by 57.6% growth in the on-trade
following the removal of COVID-19 trade
restrictions. As anticipated, the introduction
of Minimum Unit Pricing, in the off-trade,
resulted in a volume decline of 10.5%.
Increased investment behind the Bulmers
brand continued and this year we achieved
40 weeks on air with our TV ad campaign,
driving awareness and affinity for the
brand with Irish consumers. In addition,
the brand was showcased in a lighter tone
of voice through a new TV campaign for
Bulmers Light. To expand beyond our
heartland summer occasion, sustainability
and Christmas campaigns were launched,
and Bulmers was centre stage at many live
events in the summer events calendar. Our
investments are bearing fruit as the brand
finishes the year in strong brand health and
market share growth(xvii).
The Bulmers brand MAT off-trade cider
volume share has grown year-on-year to
56.3% which is up significantly on pre-
COVID-19 levels (+9.1%) and up 5.8ppts
on last year(xviii), aided by the introduction
of MUP. In the on-trade, the latest Bulmers
MAT cider volume share at 63.9% reflects
growth in Bulmers market share of 2.4ppts
ahead of pre-COVID-19 levels and 0.9ppts
ahead of last year(xix). Between the on and
off-trade, Bulmers remains the largest and
most popular cider brand in Ireland(xx).
Corporate GovernanceBusiness & StrategyFinancial Statements
20
Strategic Report - Group Strategy
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 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
Medium Term strategic goals
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
• Target leverage of between 1.5x and
and wider system
• Deliver unrivalled portfolio strength,
value and service to the UK and
Ireland hospitality sectors
• Commercialising the unrivalled data
and insight on the hospitality sector
2.0x net debt / EBITDA
• Inorganic opportunities that
strengthen our brands and system
• Invest in sustainability & technology
• Return capital to Shareholders
Measurement
Measurement
• Cash generation and conversion
• Revenue growth
• Enhanced margins
• Share growth and brand health scores
• Margin expansion in our distribution
business
Measurement
• Net Debt/EBITDA
• EPS growth
• ROCE
C&C Group plc Annual Report 2023 Achievements during FY2023
Link to Strategic Pillars
Strategic priorities
21
• Investment across our core branded portfolio with multi-channel
advertising campaigns and promotional activity.
• Tennent’s continued to gain share in the Scottish on-trade during
FY2023, with its share of total beer in Scotland up 1.8ppts to
29.6% in the twelve months ending February 2023 and in the prior
four weeks it gained 3.5ppts (to 32.6%).
• Bulmers volume increased 9.1% in the year, driven by 57.6%
growth in the on-trade following the removal of COVID-19 related
restrictions. As anticipated, the introduction of Minimum Unit
Pricing, in the off-trade, resulted in a volume decline of 10.5%.
• Premium beer portfolio has continued to progress with on-trade
volume growth of 44.1% in the year.
• Our market leading on-trade distribution system continues to
strengthen its position across the UK and Ireland, delivering to
24,000 outlets in FY2023, serving 21.5% of the UK and Ireland on-
trade. This is despite the total number of outlets contracting across
the two geographies by approximately 4,700 outlets in the year.
• Distribution volumes in GB were up 6.4% in the year, with
corresponding net revenues up 19.5%.
• Performance over the key Christmas trading period was negatively
impacted by weakening consumer demand and the various strikes
in GB.
• Effective management of inflationary cost pressures with price
increases and hedging of input costs.
Invest and
grow our
portfolio of
leading local,
premium and
craft beer and
cider brands.
Strengthen
our position
as the No.
1 drinks
distribution
business in
the UK and
Ireland.
• Strong liquidity position of €470.3m and Net debt/EBITDA of 1.3x.
Our strong underlying cash generating characteristics have been
reflected in an encouraging performance with FCF conversion in
FY2023 of 60.7% and 64.6% before exceptional items.
• Focus on our core business with the divestment of our minority
interest in Admiral Taverns for gross cash consideration of £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.
Execute a credible sustainability strategy focused on people and planet. FY2023 highlights
include:
• The Group achieved its FY2023 target of reducing Scope 1 and 2 emissions by 6%.
• 91% of the electricity used at our sites is generated from renewable sources.
• In January 2023, the Group’s greenhouse gas reduction targets were formally validated
by the Science Based Targets initiative (SBTi).
• C&C again participated in the CDP Water Security questionnaire and achieved an
improved score, moving from a C rating to a B-.
• CDP also 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.
• To enhance the Group’s Employee Assistance Programmes, we have introduced c.50
fully certified Mental Health First Aiders (MHFA). These volunteers provide the initial
help to any colleague who is developing a mental health problem or experiencing a
worsening of an existing mental health problem. C&C Group committed to training an
additional 100 MHFA in FY2024.
The Group commenced a three-year partnership with the Big Issue Group, focused
on mentoring, skills transference, and providing employment opportunities to support
marginalised communities across Great Britain.
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
between 1.5x and 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 focused on people and
planet
Business & StrategyCorporate GovernanceFinancial Statements 22
Strategic Report - Business Model
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 pre-eminent brand-led distributor for
the UK and Ireland drinks market.
Brand Strength
An attractive portfolio of
Owned and Agency brands
leveraging C&C’s existing
strengths and market
opportunities.
Sustainability
A structured and ambitious
programme of continuous
improvement ensuring C&C
delivers to a better world!
System Strength
Strategy to position the
Group as the most efficient,
technology & sustainability
driven drinks distribution system
in the UK & Ireland.
C&C Group plc Annual Report 2023 23
Brand Strength
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. These brands form part
of the fabric of the respective drinks
markets they occupy, with their lasting
appeal underpinned by continued brand
and marketing investment, alongside
new product development. Together they
deliver strong margins and are highly
cash generative.
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, 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.
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
16th century.
Ireland’s
No. 1 cider
Bulmers is Ireland’s
No.1 cider, made at our
manufacturing site Clonmel,
Co. Tipperary.
No. 3 cider
in the UK
Magners is the No.3 apple
cider in the UK and is
recognised and distributed
internationally.
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.
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.
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.
Craft beer
A range of craft beer brands
which includes Innis & Gunn,
Scotland’s leading craft
beer brand into which C&C
made an ‘equity for growth’
investment.
Craft cider
Orchard Pig craft ciders are
full of Somerset character and
scrumptious tanins found in
West Country cider apples.
Other Owned
& Agency
Local, niche and speciality
brands as well as world
premium brands such
as Stella Artois, Becks,
Budweiser and Corona.
Corporate GovernanceBusiness & StrategyFinancial Statements 24
Strategic Report - Business Model
(continued)
System Strength
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.
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 in-
house 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 the on and off-trades.
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.
Owned, stocked
Owned, not stocked
Third party
Owned, third party
operated
Inverness
Kintore
Glasgow and Wellpark
Edinburgh
Cambuslang
Dumfries
Donegal
Culcavy
Kells
Galway
Borrisoleigh
Dublin
Kilkenny
Clonmel
Cork
Boldon
Wetherby
Runcorn
Grantham
Birmingham
Bedford
Park
Royal
Bristol
Fosse
Crayford
Southampton
Launceston
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
C&C Group plc Annual Report 2023 25
Social
Ensure alcohol is
consumed responsibly
Enhance health,
wellbeing & capability
of colleagues
ESG /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.
Environmental
Reduce our
carbon footprint
Sustainably source
our products &
services
Governance
Build a more
inclusive, diverse &
engaged C&C
Collaborate with
Government & NGOs
Corporate GovernanceBusiness & StrategyFinancial Statements 26
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
Ireland drinks markets as a
key route-to-market partner
for local and international
beverage brand owners.
Our purpose is to play
a role in every drinking
occasion, delivering joy to our
customers and consumers
with remarkable brands and
service.
Our vision is to be the first
choice brand-led distribution
partner for customers in
hospitality and retail in the UK
and Ireland.
Our values are:
To respect people and our
planet and to bring joy to life,
ensuring quality is at the core
of everything we do.
We focus on the most
material areas to guide our
actions around sustainability
and support the UN
Sustainable Development
Goals.
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. 100% of the electricity
across the Group’s main sites in the
UK and Ireland comes from renewable
sources, covering c.91% of the Group’s
total electricity use. The Clonmel rooftop
solar panel farm, the largest in Ireland
continues to provide 10% of the site's
electricity requirements, while reducing the
site’s carbon emissions by c.450 tonnes of
CO2 per annum. At Wellpark, Boiler house
Energy Recovery and Anaerobic Digestion
Heat Recovery delivers a c.1,000 tonne CO2
reduction per annum. The Group’s waste
reduction program across our operations
includes recycling and reducing packaging
waste. Again, in FY2023, we met our target
of sending zero waste to landfill.
Improve sustainable packaging
The Group continues to meet its
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 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 c.600 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. C&C’s
can lightweighting programme, which
commenced in FY2020, reduces aluminium
used by c.500 tonnes per annum, while
delivering a c.3,600 tonne reduction in CO2.
Manufacture
Embrace sustainable sourcing
We are committed to sourcing our raw
materials from local sustainable sources.
All apples crushed at the Clonmel site to
produce 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. Tennent’s Lager is only ever brewed
using the finest Scottish malted barley.
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’s Ethical and
Sustainable Procurement (‘E&SP’) Strategy
is focused on proactive engagement with
our supply chain, with key objectives
targeting social and ethical standards and
environmental issues, including climate
change. Through our E&SP approach,
we request that all Suppliers comply with
C&C’s Code of Conduct and Modern
Slavery policy as a prerequisite of trading
with our business. All Suppliers are required
to complete our E&SP questionnaire,
which confirms our partners commitment
to environmental management, health
and safety, sustainability, Diversity, Equity
and Inclusion (‘DE&I’), ethical working
practices and overall corporate social
responsibility. As part of our Science
Based Target initiative (‘SBTi’) validation,
we will collaborate with those suppliers and
customers making up 67% of C&C’s Scope
3 emissions to have science-based targets
in place by 2026.
ESG Pillars
see pages 56 - 57
1
2
4
5
C&C Group plc Annual Report 2023 27
Colleague engagement
The health and wellbeing 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 offer
competitive compensation and benefits
packages, flexible work arrangements,
and opportunities for learning and
development, alongside Employee
Assistance Programmes, Private
Health Care, and screening to support
the wellbeing of our employees. Our
Employee Resource Groups, covering
Mental Health, Physical Health, Working
Parents and Menopause alongside our
Diversity, Equity, and Inclusion (‘DE&I’)
Advisory Board ensures that colleagues
have the opportunity to advocate and
influence the Group’s approach to these
critical areas.
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.
In September 2022, we announced a
three-year partnership with The Big Issue
Group, who aim to change lives through
enterprise for marginalised communities
across Great Britain. All C&C colleagues
are now offered time off to volunteer,
whether it be for our Big Issue
partnership, or local charities, community
initiatives and causes that are of personal
interest or relevant to our brands and
Business Units.
We know that volunteering creates mutual
benefit for C&C, our local communities,
and our colleagues. Alongside a positive
contribution to the local economy,
volunteering also enhances the health,
wellbeing, and capability of colleagues.
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.
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. PROOF, our in-house data and
insight business, now has approximately
100 international and domestic drinks brand
owners and operators whom they work with
either directly or who subscribe to PROOF
assets.
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. As
part of our commitment to the responsible
consumption of alcohol we produce a range
of no and low alcohol variants of our leading
brands which we continue to develop. The
Group is an active members of the Portman
Group, Drinkaware and Drinkaware.ie.
The Group is 100% committed to the
responsible promotion of alcohol and
adherence to all legislation, and the globally
recognised self- and co-regulatory codes
in the UK and Ireland. All C&C colleagues
working in Marketing and Communications
undertake annual mandatory training on the
CAP/BCAP, Portman Group and CopyClear
Codes of Practice. In FY2023, we partnered
with Drinkaware to roll out e-learning at
work for all C&C colleagues.
ESG Pillars
see pages 56 - 57
3
6
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.
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
The Group continues to assess low carbon
distribution options as the leading final mile
delivery partner to the on trade in the UK and
Ireland and sees benefit from the optimisation
of the English and Scottish delivery networks
completed in FY2022. By consolidating
volumes from three separate networks into
two and bringing all our final mile English
distribution in-house, C&C has secured on-
going efficiencies, service improvements and in
turn enhanced future margins.
Piloting Alternative Fuel Vehicles
The Group continues to build understanding
around the adoption of alternative fuel systems
as part of our decarbonisation strategy. Trials
using 18 tonne electric vehicles at the Matthew
Clark Park Royal depot continue, together
with Hydrogenated Vegetable Oil (‘HVO’) as a
long-term diesel replacement at our Bedford
and Runcorn depots. ln Scotland, we are
working in partnership with Volvo on Electric
Vehicle (‘EV’) capability adoption. Data from
a trial is being reviewed to develop a desktop
electrification analysis of the Cambuslang fleet.
ESG Pillar
see page 56
1
Corporate GovernanceBusiness & StrategyFinancial Statements
28
Strategic Report - Key Performance Indicators
Strategic Priority
KPI
Definition (see also financial definitions
on pages 233 and 234)
FY2023 Performance
FY2023 Focus
To enhance
earnings growth
Operating
profit
Operating profit/(loss) (before
exceptional items)
Operating
margin
Operating profit/(loss) (before
exceptional items), as a
percentage of net revenue
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
Basic
earnings per
share
Attributable earnings divided by
the average number of shares
in issue
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)
Free Cash
Flow
Conversion
Ratio
The conversion ratio is the
ratio of free cash flow as a
percentage of Adjusted EBITDA
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 plus
lease liabilities) to Adjusted
EBITDA
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
Links to other
Disclosures
Group CFO
Review
page 50
€120.8m
(€59.6m)*
€47.9m
€84.1m
To seek continuing
growth, through
revenue
enhancement,
acquisition synergies
and cost control
7.0%
(8.1%)*
3.3%
5.0%
29.6c
(21.1c)**
7.5c
13.4c
2.9c
(31.1c)**
9.9c
13.3c
€155.1m
(€91.2m)*
€28.4m
€75.3m
101.0%
NM*
35.6%
64.6%
1.8x
NM*
3.4x
1.3x
To achieve adjusted
diluted EPS growth
in real terms
Group CFO
Review
page 50
To achieve EPS
growth in real terms
Group CFO
Review
page 50
To generate
improved operating
cash flows
Group CFO
Review
page 50
Move towards
medium term target
of 1.5x to 2.0x Net
Debt/adjusted
EBITDA
Group CFO
Review
page 50
C&C Group plc Annual Report 2023 29
Links to other
Disclosures
Group CFO
Review
page 50
Group CFO
Review
page 50
€335.3m
€314.6m
€438.7m
€470.3m
Ensure sufficient
liquidity to meet
the on-going
requirements of
the business and
execute its strategy
€233.6m
€362.3m
€191.3m
€152.7m
5.5c
-
-
3.79c
18.6%
-
-
28.3%
32,729t
26,865t
24,196t
22,578t
0t
0t
0t
0t
0.52
0.54
0.28
0.65
The Group will
continue to seek
to enhance
shareholder returns
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 56
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 56
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 56
Strategic Priority
KPI
Definition (see also financial definitions
on pages 233 and 234)
FY2023 Performance
FY2023 Focus
To ensure the
appropriate level
of liquidity
Liquidity
Liquidity comprises cash on
hand plus headroom available
in the Group’s revolving credit
facility)
To ensure the
appropriate
level of financial
gearing
Net debt
Net debt (net debt comprises
borrowings (net of issue costs)
less cash plus lease liabilities
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
Dividend
Payout Ratio
Dividend cover is Dividend/
Adjusted diluted EPS
Tonnes of CO2 emissions***
To achieve
the highest
standards of
environmental
management
Reduction
in CO2
emissions
Waste
recycling
Tonnes of waste sent to landfill
FY2020
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
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
FY2021
FY2022
FY2023
FY2020
FY2021
FY2022
FY2023
* COVID-19 had a material impact on KPIs in FY2021.
** During the prior 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 required 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 FY2021 period presented so as to provide a comparable result.
*** Market based scope 1 and 2 emissions as stated in annual Carbon Disclosure Project return.
Corporate GovernanceBusiness & StrategyFinancial Statements 30
Strategic Report - Management of Risks and Uncertainties
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 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.
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 organisational structures,
authority limits and authorisation
process 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 and brand plans 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 review of each operating division’s
quarterly financial 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.
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,
including a review of the implementation
of the Company’s complex Enterprise
Resource Planning (‘ERP’) system in our
Matthew Clark and Bibendum business,
which now aligns them to the same
system being used elsewhere across the
Group. This is a key step in our digital
transformation and optimisation of the
business. 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.
Identifying and Monitoring
Principal and Emerging 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 2014, 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 consider any
emerging risks (internal and external) for
inclusion in the Group Risk Register.
The risks facing the Group are reviewed
and challenged regularly by the Audit
Committee and the executive management
team. Each of the Group’s principal risks
is assigned an executive owner who, with
the assistance of the risk committee for
that specific risk, is responsible for ensuring
mitigating actions are sufficient to bring
risks to within the agreed risk appetite. The
risk management governance framework
ensures that these mitigations and internal
controls are embedded and operate
effectively throughout the organisation.
The annual Board and 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.
C&C Group plc Annual Report 2023 Principal Risk Matrix
31
h
g
H
i
t
c
a
p
m
I
w
o
L
7
13
1
3
5
12
4
2
11
8
6
14
10
9
1. Regulatory / Social Attitude Changes to Alcohol
2. Economic & Geopolitical
3. Sustainability & Climate Change
4. Change in Customer Dynamics &
Group Performance
5. People & Culture
6. Health & Safety
7. Product Quality & Safety
8. Supply Chain Operations, Costs and Inflation
9. Information Technology
10. Cyber Security & Data Protection
11. Business Growth, Integration and
Change Management
12. Compliance with Laws & Regulations
13. Brand & Reputation
14. Financial & Credit
Low
Likelihood
High
impact on service and profitability within
MCB. Service levels had largely returned
to normal levels by the end of March 2023,
however continuing system implementation
challenges, impacted by greater seasonal
trading volume, saw a deterioration in
service levels in April 2023. An improvement
through May 2023 is being achieved by
investing in material additional cost and
resources, ahead of a system fix being
implemented to restore service to normal
levels permanently.
We currently expect a one-off impact of
c.€25 million associated with the ERP
system disruption in FY2024, reflecting the
cost associated with restoring service levels
and lost revenue. There is expected to be
a consequential increase in working capital
in FY2024, however net debt / adjusted
EBITDA is expected to remain within our
stated range of 1.5x to 2.0x. Excluding the
impact on MCB, the Group is currently
performing in line with expectations for
FY2024 and the Board is confident in the
Group’s medium and long-term strategy
and prospects.
Emerging Risks
As part of our overall risk assessment
process and in line with the Code, the
Group captures and monitors areas of
uncertainty which, while not having a
significant impact on the business currently,
have the potential to adversely impact the
Group in the future. These are considered
to be emerging risks.
Following the FY2023 risk assessment no
new emerging risks were identified.
The monitoring of existing and identification
of new emerging risks are an ongoing focus
for the Group.
Risk Appetite
Risk appetite promotes consistent, “risk-
informed” decision-making aligned with
strategic aims, and it also supports robust
corporate governance by setting clear risk-
taking boundaries.
For each of the principal risks, the Group’s
risk appetite has been considered when
determining the nature and extent of the
key control mechanisms in place and the
level of assurance required. The Board
and the Audit Committee receive regular
reports from key functions such as health
and safety, finance, legal, IT, internal audit,
HR and ESG. Where the level of assurance
obtained is not considered to adequately
reflect the stated risk appetite, then
increased assurance activity is introduced.
Changes to the Principal Risks
The FY2023 overall risk assessment
process identified a number of risks that
have increased since the prior year and as
a result have an impact on the overall risk
profile of the Group. These include:-
Financial and Credit
Economic instability is increasing the risk
of bad debt/default and cost of capital
pressures. The profitability of some of our
customers and suppliers is being adversely
affected by the macro environment and
consumer spending;
Change in Customer Dynamics and
Group Performance
In addition to the profitability of some of our
suppliers and customers being adversely
affected by the macro environment and
consumer spending, the rapid increase
in interest rates to counter inflation might
adversely affect customer behaviour
and reduce profitability. Likewise, the
introduction of the deposit return scheme
(‘DRS’) in Scotland and in Ireland in 2024,
and other legislation developments such
as the introduction of Minimum Unit Pricing
in Scotland and Ireland, may influence
customer behaviour;
Economic and Geopolitical
The continued industrial action in the UK
is increasing uncertainty and the speed
of change across markets. Moreover,
geopolitical changes could impact
negatively upon commodity pricing (such as
oil and gas, and raw materials).
Cyber Security and Data Protection.
There is an increased threat of state-
sponsored cyber attacks.
In addition, the Group implemented a
complex Enterprise Resource Planning
(‘ERP’) transformation in February 2023
in the Matthew Clark and Bibendum
(‘MCB’) business, further aligning and
streamlining our technology infrastructure
across the Group. This is a key step in our
digital transformation and optimisation
of the business which will enable further
automation and simplification of our
business processes.
The implementation of the ERP has taken
longer and has been significantly more
challenging and disruptive than originally
envisaged, with a consequent material
Corporate GovernanceBusiness & StrategyFinancial Statements
32
Strategic Report - Management of Risks and Uncertainties
(continued)
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 32 to 38 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 page 38.
Risk and Uncertainties
Impact
Mitigation
Regulatory and Social Attitude Changes to Alcohol
Risk
Trend
The Group may be adversely affected
by changes in government regulations
affecting alcohol pricing (including duty,
and potential alignment of cider and
beer duties and extended producer
responsibility), sponsorship or advertising.
Economic and Geopolitical
Our business, financial results and
operations may be adversely affected by
economic or geopolitical instability and/or
uncertainty, such as the continuing conflict
and humanitarian crisis in Ukraine.
The Group’s performance is also impacted
by potential recessions, inflation, exchange
rates, taxation rates and social unrest.
The Group and business units continue to engage with trade bodies, NGOs and UK, Irish
and Scottish governments to ensure any proposed changes to legislation and restrictions are
appropriate within the industry.
The Group is actively involved with key trade bodies in UK and Ireland and has participated in
Government consultations and round table sessions with Ministers and officials on topics including
UK Alcohol Duty Review, Minimum Unit Pricing (Scotland), DRS (Scotland and Republic of Ireland)
and Alcohol Marketing Restrictions (Scotland).
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. C&C also adheres to the
responsible promotion of alcohol and all legislation, and the self- and co-regulatory codes in the
UK and Ireland (Portman, CAP/BPAC and CopyClear). C&C are also members of Drinkaware and
Drinkaware.ie, the alcohol education charities.
The Group has developed low and zero alcohol variants of our brands. This combined with our
ability to distribute the broadest range of third-party low and zero alcohol options allows C&C to
address legislation and possible duty increases as well as meet the needs of consumers looking to
moderate their drinking.
The Board and management will continue to consider the impact on the Group’s businesses,
monitor developments and engage with the British, Irish and Scottish governments to help ensure a
manageable outcome for our businesses.
Group businesses are active members in respected industry trade bodies in the UK and Ireland
including being a steering committee member of the UK all-party 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.
C&C Group plc Annual Report 2023 Risk Movement
New
No change
Increasing
Decreased
Impact
Mitigation
Sustainability and Climate Change
33
Risk
Trend
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.
The Group has established a strong governance model which includes an ESG Committee
responsible for the delivery of our ESG strategy. Ambitious targets are in place with regard to
reducing the carbon footprint of our operations, our water usage, waste and also the use of single
use plastics. Our Clonmel and Bristol sites continue to be ISO 14001 accredited for an effective
environmental management system.
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.
A materiality assessment exercise, in line with the Global Reporting Initiative, was started during
the year to ensure that the Group’s ESG priorities remain aligned with the views of our key
stakeholders.
The Group has pledged to be a carbon-neutral business by 2050 at the latest. We have set our
emissions reduction targets which are grounded in climate science and validated by the Science
Based Targets initiative (‘SBTi’) in February 2023. We are committed to reduce our absolute
Scope 1 and Scope 2 greenhouse gas emissions by 35% by 2030 (versus a FY2020 base year).
To achieve our target of reducing our Scope 3 emissions by 25% (versus a FY2020 base year)
by 2030, 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 Group is working with the Carbon
Disclosure Project (‘CDP’) on their supplier screening process to support and encourage suppliers
and customers to set and share science-based targets for their own emissions.
A cross functional team has been established to continue our alignment with the Task Force on
Climate-Related Financial Disclosures (‘TCFD’) guidance. An external party has been engaged to
support this process. For FY2023, the team has carried out a scenario scoping exercise for five
climate risks and two opportunities to provide a quantitative assessment of the potential range of
outcomes and associated financial impact for C&C.
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 and again in FY2023. We have established a Risk and
Compliance Committee which is responsible for monitoring the Sustainability and Climate Change
risk. This committee is composed of executives and various levels of management from across the
Group. 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 to the ESG Committee
twice a year in order to improve our oversight of climate-related risks and opportunities.
The Group has established an Ethical and Sustainable Procurement Steering Committee to ensure
that suppliers adopt a strong approach to corporate social responsibility. Suppliers are reviewed
and assessed both on an ongoing basis and as part of new tenders to ensure they adhere to C&C’s
Code of Conduct and Modern Slavery policies and that sustainability and ethical practices are a
fundamental part of their operations.
Customer and Consumer Dynamics and Group Performance
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 alcohol 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.
Brand health surveys, which provide an understanding of consumer and customer perception of
our brands, are used to inform and enhance our market offerings.
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.
The Group has established cross-functional working groups to engage with all stakeholders to plan
effectively for the implementation of the DRS in Scotland and Ireland.
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.
In the post pandemic environment there is
a smaller on-trade universe and possible
reduced value pool for the on-trade.
The rapid increase in interest rates
to counter inflation may adversely
affect customer behaviour and reduce
profitability. Deposit return schemes are
planned to come into force in Scotland
in March 2024 and in Ireland in February
2024, impacting consumer behaviour.
Corporate GovernanceBusiness & StrategyFinancial Statements
34
Strategic Report - Management of Risks and Uncertainties
(continued)
Impact
Mitigation
Risk
Trend
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.
Failure to continue to evolve our culture,
diversity and inclusion could impact our
reputation and delivery of our strategy.
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 criminal
prosecution, civil litigation and damage to
the reputation of the Group and its brands.
.
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 Group seeks to mitigate this risk through employment policies and procedures, as well as
ongoing enhancements of 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 Committee and is overseen by the ESG, Nomination Committee
and the Board.
The Board and the Executive team have a vital role in shaping and embedding a healthy corporate
culture, which continues to be a focus. Culture is monitored and assessed by the ESG 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. Our Employee Representative Groups (‘ERGs’) remain
key in evolving our culture, with each group having an executive sponsor. Our Diversity, Equity and
Inclusivity group continues to champion greater diversity throughout the Group.
The Group implemented a complex ERP transformation in February 2023 in the MCB business,
further aligning and streamlining our technology infrastructure across the Group. This is a key step
in our digital transformation and optimisation of the business which will enable further automation
and simplification of our business processes. The implementation of the ERP has taken longer and
has been significantly more challenging and disruptive than originally envisaged, with a consequent
material impact on service and profitability within MCB, which in turn has put employees working
on the project under significant pressure. More details can be found on page 85.
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.
Management meetings throughout the Group feature a health and safety update as one of their first
substantive agenda items. The Group has policies, procedures and standards in place to ensure
compliance with legal obligations and industry standards.
Our support for mental health and wellbeing has further increased this year, with a significant
further expansion of our Mental Health First Aider population and investment in a range of
resources.
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 to ensure the safe
production and distribution of the Group’s products.
Our Clonmel and Bristol sites continue to be ISO14001 accredited for an effective environmental
management system. Our Clonmel and Wellpark manufacturing sites have the highest standard of
BRC accreditation of AA+ achieved in October 2022 and March 2023 respectively.
C&C Group plc Annual Report 2023
Risk Movement
New
No change
Increasing
Decreased
Impact
Mitigation
Supply Chain Operations, Costs and Inflation
35
Risk
Trend
Circumstances such as the prolonged
loss of a production or storage facility,
disruptions to 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.
An increased number of 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. The continuing conflict in Ukraine
has contributed to heightened uncertainty
and inflationary pressures.
The Group seeks to mitigate the operational impact of such events 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.
Enhancement of business continuity planning launched to enhance the visibility of our key
dependencies, our key threats and solution design. The Group works closely with its suppliers to
protect the integrity and consistency of supply of raw materials.
The Group seeks to minimise input risks through sustainable sourcing and 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.
During February 2023, the Group implemented a complex ERP transformation in February 2023
in the MCB business, further aligning and streamlining our technology infrastructure across
the Group. The implementation of the ERP has taken longer and has been significantly more
challenging and disruptive than originally envisaged. More details can be found on page 85.
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.
Monitoring and alerting of availability of critical technologies and their inter-dependencies.
IT change management process is embedded to assess risk of all changes to technology including
changes made by third-party providers. Critical IT Technologies are either cloud-hosted, hosted
across two data centres or at third party provider locations with necessary fall over protocols and
security perimeters in place.
Incident management teams are in place 24/7 to manage low level IT incidents. If there is a major
incident or an escalation of an incident that has a wider impact on other parts of the business and
stakeholders, then it can be escalated into the IT major incident management team to respond
rapidly, with defined escalation and communication with the crisis management framework, via the
network duty manager.
During February 2023, the Group implemented a complex ERP transformation in February 2023
in the MCB business, further aligning and streamlining our technology infrastructure across
the Group. The implementation of the ERP has taken longer and has been significantly more
challenging and disruptive than originally envisaged. More details can be found on page 85.
Corporate GovernanceBusiness & StrategyFinancial Statements 36
Strategic Report - Management of Risks and Uncertainties
(continued)
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
a negative impact on 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.
Using personal data in a non-compliant
manner (whether deliberately or
inadvertently) may exacerbate the impact
of security incidents.
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 Group 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.
A data and cyber risk governance structure exists including an IT and data protection risk
committee to regularly review the data and cyber risk landscape and determine required action to
take place to manage risk effectively. Cyber security is a major focus area for the Board and Audit
Committee who receive regular updates from the Group Transformation and Technology Director.
A 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 including asset
management, a comprehensive patching schedule and consolidation of our IT Infrastructure.
During FY2023 we continued our ongoing programme of investment in cyber security controls
which included Endpoint Detect and Respond, Cloud Access Security Broker, Domain based
Message authentication, Reporting and Conformance, 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 several 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 Group Data Protection Officer.
During February 2023, the Group implemented a complex ERP transformation in February 2023
in the MCB business, further aligning and streamlining our technology infrastructure across
the Group. The implementation of the ERP has taken longer and has been significantly more
challenging and disruptive than originally envisaged. More details can be found on page 85.
Business Growth, Integration and Change Management
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.
During February 2023, the Group implemented a complex ERP transformation in February
2023 in the MCB business, further aligning and streamlining our technology infrastructure
across the Group. The implementation of the ERP has taken longer and has been
significantly more challenging and disruptive than originally envisaged. More details can be
found on page 85.
C&C Group plc Annual Report 2023 Risk Movement
New
No change
Increasing
Decreased
Impact
Mitigation
Compliance with Laws and Regulations
37
Risk
Trend
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
penalties.
Brand and Reputation
The Group faces considerable risk if
we are unable to uphold high levels of
consumer awareness service, 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.
Capability in digital marketing means there
is a risk of losing voice and ultimately
brand awareness/advocacy with target
consumers and trade customers.
The introduction of DRS in Scotland and
Ireland in 2024 presents a reputational risk
if not implemented correctly.
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.
Changes in laws and regulations are monitored, with policies and procedures being updated
as required 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 regarding 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.
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 and 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.
During February 2023, the Group implemented a complex ERP transformation in February
2023 in the MCB business, further aligning and streamlining our technology infrastructure
across the Group. The implementation of the ERP has taken longer and has been significantly
more challenging and disruptive than originally envisaged. More details can be found on page
85.
On time in full rates are tracked weekly as a measure of customer service in our distribution
business.
Corporate GovernanceBusiness & StrategyFinancial Statements
38
Strategic Report - Management of Risks and Uncertainties
(continued)
Impact
Mitigation
Risk
Trend
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.
Government and central bank policy can
also adversely impact Group results and
re-financing. Economic instability may
increase the risk of bad debts.
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.
The Group manages pension risk through 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. Credit limits are regularly reviewed in response to changing
market conditions.
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.
During February 2023, the Group implemented a complex ERP transformation in February 2023
in the MCB business, further aligning and streamlining our technology infrastructure across
the Group. The implementation of the ERP has taken longer and has been significantly more
challenging and disruptive than originally envisaged, with a consequent material impact on service
and profitability within MCB. More details can be found on page 85.
Assessment of the Group’s
Prospects
Going Concern
In adopting the going concern basis for
preparing these financial statements, the
Directors have considered the Group’s
business activities, together with factors
likely to affect its future development
and performance, as well as the Group’s
principal risks and uncertainties.
The Directors assessed the Group’s
cash flow forecasts for the period ending
31 August 2024 (the going concern
“assessment period”). The cash flows
included various stress testing scenarios.
These scenarios stress volume and working
capital outflows to reflect the potential
impact, to varying degrees, of a deepening
recessionary environment including the
impact of further inflation and interest rate
increases on customer and consumer
spending. The Group is satisfied that there
is sufficient headroom in the financial
covenants under current facilities under
each scenario.
The Group’s scenarios assume:-
• A base case projection using internally
approved forecast and strategic plans,
which reflect the external economic
environment;
• A downside and a severe downside
scenario which assesses the potential
impact on volume and working capital of
a deepening recessionary environment
including the impact of further inflation
and interest rate increases on customer
and consumer spending.
Overall conclusion
Having considered these scenarios, the
Group’s banking facilities, the ongoing
inflationary pressures within the macro
economy and the funding requirements
of the Group, the Directors are confident
that headroom under our banking facilities
remains adequate, future covenant tests
can be met, and there is a reasonable
expectation that the business can meet
its liabilities as they fall due for a period
of greater than 12 months (being an
assessment period of 15 months) from the
date of approval of the Group Financial
Statements. For these reasons the Directors
continue to adopt the going concern basis
of accounting in preparing the Group’s
financial statements and no material
uncertainty has been identified.
Viability Statement
As set out in Provision 31 of the UK
Corporate Governance Code, the Directors
have carried out a rigorous review of 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 2026.
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 2026.
C&C Group plc Annual Report 2023 Risk Movement
New
No change
Increasing
Decreased
39
Group’s strategic planning process
The Board considers annually a three-
year, bottom-up strategic plan and a more
detailed budget is prepared for the following
year. Current-year business performance is
reforecast during the year. The most recent
financial plan was approved by the Board
in February 2023. 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.
Period of Assessment
The Directors have determined that the
three-year period to February 2026 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;
• The Group’s strategic planning cycle
covers a three-year period; and
• The Directors believe that this presents
the Board and readers of the Annual
Report with a reasonable degree of
confidence over this longer-term outlook.
Viability Assessment
The Directors’ assessment of the Group’s
viability has been made with reference to
FY2023 performance and the budget for
FY2024.
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
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.
Strategic Report Approval
The Strategic Report, outlined on pages
2 to 79, (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 24 May 2023.
Mark Chilton
Company Secretary
and business unit levels and are subject
to detailed examination, challenge and
sensitivity analysis by management and
the Directors;
• A consideration of how the impact of one
or more of the Group’s Principal Risks
and Uncertainties, 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. An in-depth assessment of climate
risk has been conducted in the past 12
months, including a further scenario
scoping exercise of the climate risk
and opportunities and a quantitative
assessment of the potential range of
outcomes and associated financial
impact on the Group. See pages 40 to 49
for an overview of our work on TCFD.
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, 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
considered 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 2023, the Group
had total undrawn committed credit facilities
of €355.0m, and €115.3m 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, current performance,
forecasts, debt servicing requirements,
Corporate GovernanceBusiness & StrategyFinancial Statements 40
TCFD Disclosure
Response to Climate Change
Following the first disclosure last year
in line with the Task Force on Climate-
related Financial Disclosures (‘TCFD’)
Recommendations, the Group continued
to factor climate change into strategic
considerations in a formalised and robust
manner, including, but not limited to,
carrying out a quantitative scenario analysis.
In accordance with Listing Rule 9.8.6R(8),
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))
• 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 second 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 coming years.
Board of Directors
Audit
Committee
Nomination
Committee
Remuneration
Committee
ESG
Committee
Executive
Directors
Executive
Committee
ESG Working Group
ESG Champions
Risk Committees
(including the Risk Committee
for the Sustainability &
Climate Change principal risk)
Board level
Management level
Existing reporting lines
Planned reporting lines
Governance
C&C’s Board of Directors has the ultimate
responsibility for overseeing the Group’s
climate-related risks and opportunities
and for ensuring that climate change
considerations are considered when
reviewing and guiding the Group’s
strategy, when undertaking major plans
of action or capital expenditures.
Moreover, climate change is 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 33.
During the year, the Board has continued
to receive training on climate scenario
analysis and the strategic considerations
for C&C. A quantitative scenario analysis
was carried out starting in Q4 of FY2023
and into Q1 of FY2024 and the results were
presented to the Board in March 2023 and
the ESG Committee in May 2023.
During the remaining months of 2023,
we intend to carry out additional detailed
training on ESG and climate change as well
as the associated risks and opportunities,
to increase our leadership’s knowledge,
understanding and awareness of climate-
related issues.
The ESG Committee has delegated
responsibility from the Board over some
elements of oversight of climate change.
Please see pages 105 to 107 for the
Environmental, Social and Governance
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:
C&C Group plc Annual Report 2023 41
Risk & Compliance Committee:
Starting from FY2021, Sustainability and
Climate Change has been identified as a
principal risk for C&C, and therefore a Risk
Committee for Sustainability and Climate
Change was set up and is responsible for
monitoring and managing climate change,
including reviewing the climate-risks and
opportunities identified on a yearly basis.
The Risk Committee for Sustainability
and Climate Change reports to the Audit
Committee and is composed of executives
and various levels of management from
across the Group. During FY2023, the Risk
Committee for Sustainability and Climate
Change met four times.
Following a review of the internal reporting
lines, the Group is reviewing the frequency
at which the Committee will be meeting in
future, as well as establishing additional
reporting lines to the ESG Committee.
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 group of
ESG Champions across the business. The
responsibilities of the Champion’s role focus
on providing upward feedback on ESG
initiatives to the ESG Committee.
During the year, to support our Supply
Chain Screening approach, CDP delivered
training to 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. We intend
to roll out further 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.
The Environmental, Social and Governance Committee Report on pages 105 to 107
contains details on the ESG related metrics considered by the Committee. In relation to
climate change, these remain unchanged from FY2022 and include the following metrics:
Metric
Target
Relevant to
Reductions in kWh per
hectolitre (intensity metric)
+ total kWh (absolute
metric) across each
production site, as part of
a wider suite of site-level
performance metrics
Carbon reduction for the
Group
Subset of employees
(working in our major
manufacturing sites, for
which carbon reduction
targets have been set)
Executive Directors
These activities are linked
to our overall corporate
emissions reduction
targets. The incentive
scheme applies to all
employees who work
within our production sites
The Group has set a target
to reduce its Scope 1
emissions and Scope 2
emissions1 over the three
financial years ending with
FY2024 as follows:
Threshold - 6% reduction
Maximum - 12% reduction
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.
Strategy
The Group has pledged to be a carbon-
neutral business by 2050 at the latest. We
have grounded our emissions reduction
targets in climate science through the
Science Based Targets initiative (‘SBTi’),
which have been validated in FY2023 as
discussed on page 63 of the Responsibility
Report.
Our Approach to Identifying Climate-
related Risks and Opportunities
In FY2023, we collaborated with external
consultants to support us in carrying out a
quantitative scenario analysis on the CROs
that had been identified during FY2022
to further understand and to quantify
the impact that climate-related risks and
opportunities could have on the Group.
The Risk Committee for Sustainability and
Climate Change, as per their Terms of
Reference, have reviewed the CROs that
had been identified during FY2022 and
determined that they are still relevant to the
business, and that no further changes were
required for FY2023.
These CROs were identified in FY2022
through workshop sessions involving
external consultants and a range of key
stakeholders within C&C, and utilised the
existing Risk Management framework (as
described on pages 30 to 31 of the Annual
Report) to assess the impact and the
likelihood associated with each CRO. The
time horizons were reviewed in order to take
into account the fact that climate change
will manifest itself over a longer period of
time. The time frames, which focus on when
the identified CRO is likely to begin having a
significant impact on the Group’s 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 GovernanceBusiness & StrategyFinancial Statements 42
TCFD Disclosure
(continued)
Our Identified CROs
Please find below the CROs that are
most relevant for the Group, which were
determined based on the methodology
described above.
Heatmap
l
*
y
e
k
L
i
l
y
h
g
H
i
l
y
e
k
L
i
l
i
e
b
s
s
o
P
l
y
e
k
i
l
n
U
e
t
o
m
e
R
3
4
5
6
7
2
1
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
Minor
Moderate
Significant
Major
Intolerable*
*As defined in our Group Risk Register.
TCFD CRO Category
Time Horizon
Value Chain Impact and
divisional impact
Description of impact prior to
any mitigating activities being
considered
Management of risks and
opportunities
Link to relevant Metric(s) and
Targets
1. Climate Change Levy / Carbon Tax
Transition risk
- policy & legal
Transition risk
- technology
Short
term
Upstream,
Production &
distribution
Branded
Wholesale
Scope 1, Scope
2 and Scope 3
emission and
emission reduction
targets.
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
greenhouse gas 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 to assess
potential future financial
impacts that could arise
from proposed increases
in carbon pricing.
C&C Group plc Annual Report 2023
43
TCFD CRO Category
Time Horizon
Value Chain Impact and
divisional impact
Description of impact prior to
any mitigating activities being
considered
Management of risks and
opportunities
Link to relevant Metric(s) and
Targets
2. Effects on ingredient production due to climate change
Physical risk -
chronic
Long
term
Raw materials
Branded
Wholesale
The Group has assessed
the climate related risk
to each ingredient on
an individual basis. The
results will be incorporated
into our supply chain
strategy.
CDP Supplier
Screening
programme /
Science Based
Target
Scope 3
Engagement Target
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.
3. Water scarcity reduces availability of water for production
Physical risk -
chronic
Transition risk -
policy & legal
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 enhance regulatory
controls over seasonal
water extraction activities,
disrupting the Group’s
production.
6. Floods disrupt production and distribution at Clonmel facility
Physical risk - acute
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.
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.
Monitoring of water
usage in C&C’s
facilities. Targets
to manage this risk
are currently being
developed by the
Group.
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.
As a significant employer
in Tipperary in Ireland,
the Group will work with
the local authorities to
foresee and mitigate any
associated risk.
Metrics and targets
to manage this risk
are currently being
developed by the
Group.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 44
TCFD Disclosure
(continued)
TCFD CRO Category
Time Horizon
Value Chain Impact and
divisional impact
Description of impact prior to
any mitigating activities being
considered
Management of risks and
opportunities
Link to relevant Metric(s) and
Targets
7. Disruption to supply chain & distribution network due to extreme weather
Physical risk - acute
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.
4. Invest in low carbon intensity supply chains and distribution networks
Transition
Opportunity
(Resource
Efficiency)
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.
5. Sustainable trends in consumer demand
Transition
Opportunity
(Resilience and
Market)
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.
Metrics and targets
to manage this risk
are currently being
developed by the
Group.
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
Intergovernmental Panel
on Climate Change
(‘IPCC’) scenarios.
The Group will mitigate the
financial impact of such
events through business
interruption insurance
cover.
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.
Metrics and targets
to manage this
opportunity are
currently being
developed by the
Group.
The Group will work
with our partners in our
recently launched Supply
Chain engagement
programme to help
them lower their carbon
emissions.
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).
Metrics and targets
to manage this
opportunity are
currently being
developed by the
Group.
C&C Group plc Annual Report 2023 45
In FY2023, we carried out a quantitative
scenario analysis to understand further the
impact of the identified CROs on the Group.
Following the understanding gained from
this assessment, in FY2024 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 represents 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 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.
Transition Plan
During FY2023, the Group’s emission
reduction targets were validated by the
Science Based Targets initiative (‘SBTi’), in
line with a well below 2°C trajectory. C&C
is committed to reducing absolute Scope 1
and Scope 2 greenhouse gas emissions by
35% by 2030 (versus FY2020 baseline). In
addition, to achieve the target of reducing
Scope 3 emissions by 25% (versus FY2020
base year) by 2030, the Group has also
committed that suppliers and customers
making up 67% of Scope 3 emissions
(Purchased Goods, Downstream Transport
and Use of Sold Goods) will have science-
based targets in place by 2026. The Group
is now in the process of developing a
transition plan to deliver on these targets,
also considering the Net Zero commitments
set by the jurisdictions in which we operate.
Understanding the impact on our
CROs through Scenario Analysis
The following CROs were selected for
quantitative scenario analysis and evaluated
across a range of scenarios to understand
how they may evolve under certain
hypothetical situations:
• Increased costs from a climate change
levy / carbon tax.
• The reduction of water available for
production due to water stress.
• Disruption of production and distribution
at key facilities due to flood events and
extreme weather.
• Effects of chronic climate change on
ingredient production of five key crops
(apples, barley, sugar, wine grapes, and
hops).
• Increased market opportunity for low
carbon products due to sustainable
trends in consumer demand.
These CROs were selected for quantitative
scenario analysis based on their assessed
potential to have a significant impact. This
analysis has allowed us to understand
and improve the resilience of our business
model and strategy to climate change.
Several factors were considered during the
selection of scenarios for this quantitative
analysis (as outlined in the table below).
This analysis made use of publicly available
scenarios from the IPCC.
The range of scenarios was selected to
consider the impacts of the selected CROs
across the widest range of outcomes,
to best prepare for all eventualities. The
scenarios are broadly aligned with the
qualitative analysis conducted in FY2022,
however, to adhere with the latest science
and IPCC findings, a 1.5°C scenario was
prioritised over the previously selected <2°C
scenario.
Climate scenarios selected for analysis
Warming trajectory by 2100
Data source
Key assumptions, outputs, and sensitivities
1.5°C (Paris Ambition)
IPCC SSP11-1.92
2.5°C (Stated Policy)
IPCC SSP2-4.5
>4°C (No policy)
IPCC SSP5-8.5
• The financial analysis is based on the forecasted financial position up to
FY2027. Climate risks and opportunities were assessed over the short,
medium and long-time horizons based on this forecasted position.
• Analysis of acute physical risks is limited to 27 of our key distribution and
manufacturing sites. The vulnerability of each of these sites is based on a
typical manufacturing or distribution facility.
• Analysis is based on existing sites, products and market share.
• The results represent the gross risk position of our business strategy.
1. SSPs - Shared Socio-economic Pathways outline different economic, social, and technological contexts, in the absence of further climate policy, that accompany the RCPs.
2. RCP - The IPCC’s Representative Concentration Pathways outline different greenhouse gas concentration trajectories. RCP 8.5 indicates that GHG concentrations will result in
global temperatures warming by >4°C on average, and therefore is associated with higher physical climate impacts.
Corporate GovernanceBusiness & StrategyFinancial Statements 46
TCFD Disclosure
(continued)
The relative impact of each of the CROs,
without any current or future mitigating
action was considered under each of the
scenarios. The results are presented in the
table below.
exposure to increasing costs from direct
or indirect carbon taxation and improving
our position to capitalise on the market
opportunity of low carbon products.
We believe our business, with its strategic
focus on local brands and distribution
capability, is shown to be resilient to climate
change. Sustainability forms a core part
of our strategy, and we will continue to
focus on reducing our Scope 1, 2 and 3
emissions, thereby reducing our potential
Going forward, as recommended by the
TCFD, we will look to reassess our business
strategy and model against these CROs
under different scenarios where there is
a significant change to the business. Our
priorities for FY2024 include examining further
mitigation strategies in response to those
risks that present the most potential impact.
Impact scale
Low Risk
Medium
Risk
High Risk
High
Opportunity
Medium
Opportunity
Low
Opportunity
Scenario
Assumptions
1. Climate Change Levy / Carbon Tax
Potential Impact
Short
Medium Long
Summary of results
1.5°C
2.5°C
>4°C
All countries apply an average
carbon price of $80/tCO2.
This carbon price varies by country
and over time.
$40/tCO2 is applied in all advanced
economies. This carbon price varies
by country and over time.
All carbon pricing is repealed ($2/
tCO2 ).
2. The reduction of water available for production due to water stress
1.5°C
2.5°C
>4°C
This analysis examined 27 of our
own manufacturing and distribution
sites.
The vulnerability curve assumes
~4 days disruption for offices and
manufacturing sites (for a severe
water stress event) and ~2 days
disruption for warehouse/distribution
sites.
The application of a carbon tax to our Scope 1, 2
and 3 emissions may have the potential to result in a
significant cost to the business under the 2.5°C and
1.5°C scenarios. As our scope 3 emissions account
for the majority of our exposure, these costs are
anticipated to be realised through indirect costs via
our supply chain. The size of this cost will depend on
the extent to which suppliers reflect their own carbon
tax expenditure within their prices and the extent
to which we are able to absorb this cost ourselves
instead of passing the cost on to our customers.
To mitigate this risk, we are engaging with our
suppliers, encouraging them to publish a CDP
disclosure, and share their full carbon footprint. We
are also looking to reduce emissions from our own
operations.
Water stress was examined for each of the 27 priority
sites. Overall, while the probability of this risk is
expected to increase under all scenarios between
2025-2050, even doubling in this time period under
the >4°C scenario, it is not estimated to result in a
significant potential impact on revenue.
C&C Group plc Annual Report 2023
47
Scenario
Assumptions
Potential Impact
Short
Medium Long
Summary of results
3. Disruption of production and distribution at key facilities due to flooding
1.5°C
2.5°C
>4°C
This analysis examined 27 of our
own manufacturing and distribution
sites. The analysis examines both
riverine and coastal flood events.
Flash floods, however, are not
included within this analysis.
The vulnerability curve assumes ~8
days disruption for manufacturing
sites, ~1 for offices and ~7 for
warehouse/distribution sites (for a
0.5m flood).
Both coastal and riverine flooding were examined
under this analysis. It was found that the risk of
both coastal and riverine flooding was found to
increase over time for all scenarios, although it
was not found to present a significant risk to the
overall business.
4. Disruption of production and distribution at key facilities due to extreme weather events
1.5°C
2.5°C
>4°C
This analysis examined 27 of our
own manufacturing and distribution
sites. The vulnerability curve
assumes ~0.1 days disruption for
offices, ~1.1 days for manufacturing
sites and warehouse/distribution
sites (for a major temperate
windstorm).
5. Effects of chronic climate change on ingredient production
1.5°C
2.5°C
>4°C
The optimal growing conditions
for 5 key crops were examined
(apples, wine grapes, barley, sugar
beet, and hops) for our sourcing
locations for both our distribution
and own-branded products). It was
assumed that these products were
not substitutable.
Analysis is limited to the impacts of heatwaves
and temperate windstorms at 27 key distribution
and manufacturing sites. Heatwaves are expected
to present a minimal risk, whereas temperate
windstorms have the potential to result in significant
impacts in the form of asset damage and revenue
disruption. However, the baseline risk for windstorms
is currently high. The potential financial impact of
this risk under a >4°C scenario, in terms of revenue
disruption and property damage, is expected to
increase by 6% between 2025 and 2050.
Overall, wine grapes and sugar beet were found to be
the most impacted crops with the greatest potential
for significant impacts expected in the longer term
under the 2.5°C and >4°C scenarios. Conversely,
under the same scenarios, some crops, particularly
those sourced locally, are estimated to experience
a net increase in yields. We will continue to monitor
risk at key sourcing locations and use the outputs to
inform procurement decisions.
Where our sourcing locations may experience lower
yields as a result of climate change, we may see
an increase in the cost of products purchased for
distribution in these areas. Going forward we will
monitor these areas and factor this risk into our
buying decisions.
6. Increased market opportunity for low carbon products due to sustainable trends in consumer demand.
1.5°C
2.5°C
>4°C
Rapidly growing demand for
sustainable products in all markets.
Limited consumer demand for
sustainable products within both
leading and emerging markets.
Little consumer demand for
sustainable products.
The market opportunity for low carbon products may
be significant under a 2.5°C - 1.5°C scenario.
There is potential for a significant increase in revenue
as consumer preferences shift towards low carbon
alternatives.
Further prioritising the production and distribution of
low carbon products could also limit our exposure to
carbon taxes and their associated costs.
Corporate GovernanceBusiness & StrategyFinancial Statements 48
TCFD Disclosure
(continued)
Risk Management
In FY2021, Sustainability and Climate
Change was identified as being a
principal risk for C&C. Therefore, the
identification, prioritisation, assessment,
and management of our ‘Sustainability
and Climate Change’ risk is carried out in a
manner consistent with the Group’s other
principal risks with the exception of the
timeframe used (please refer to page 41 of
the Strategy section of the TCFD report).
C&C adopts a standard risk management
framework which is discussed in detail on
pages 30 to 31. Given the increasing focus
on climate, in FY2022 we completed a deep
dive on CROs as described in the strategy
section above, which have been validated
by the Risk and Compliance Committee
for Sustainability and Climate Change in
FY2023. We have integrated the results
of this assessment into our overall risk
management system.
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 pages 41 to 47. Climate change
mitigation is a current and ongoing
responsibility for the Risk Committee for
Sustainability and Climate Change as
highlighted on page 41.
During FY2023, the Group also assigned a
risk owner to manage each of the principal
risks, including Sustainability and Climate
Change. Additionally, the owner of the
Sustainability and Climate Change risk
reviews all the other principal risks on the
Group’s risk register to assess them under a
sustainability and climate change lens, thus
reflecting the commitment of the Group
to ensure that sustainability and climate-
related risks are considered and integrated
into the business in a holistic manner.
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 and have
identified the importance of implementing a
bottom-up risk assessment process, which
is currently being structured and will be
disclosed in FY2024. During the year, we
will also investigate the roll out of education
and awareness training that will be carried
at 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
The Board recognises the importance of
ensuring that we monitor our performance
with respect to the CROs identified with
tailored KPIs.
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.
However, we acknowledge that more
work needs to be done and the Group is
currently working on developing additional
metrics that are more tailored to the
identified CROs, following the output and
the learnings from the quantitative scenario
analysis.
For further information on how our metrics
currently map to the identified CROs,
please refer to the Strategy section of the
TCFD report on pages 41 to 47. For more
information on our performance and our
historical progress around wider ESG
matters please refer to the Responsibility
Report on pages 56 to 79.
TCFD Index and Focus areas for FY2024
Disclosure Requirement
Governance
TCFD
disclosure met
Page
Reference
Actions Undertaken
Next Steps
(a) Describe the board’s oversight of
climate-related risks and opportunities.
(b) Describe management’s role in
assessing and managing climate-related
risks and opportunities.
Yes
Yes
Page 40
Pages 40
to 41
• Additional reporting lines
being developed which
will see the RCC for
Sustainability and Climate
Change also report to the
ESG Committee.
• A Risk & Compliance
Committee (‘RCC’)
continued to operate
in order to monitor and
manage Sustainability
and Climate Change as a
principal risk.
• The Board received further
training on ESG and
climate change as well as
the associated risks and
opportunities.
C&C Group plc Annual Report 2023 49
Disclosure Requirement
Strategy
TCFD
disclosure met
Page
Reference
Actions Undertaken
Next Steps
(a) Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
Yes
Pages 41
to 47
(b) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
(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 41
to 47
Yes
Pages 46
to 47
Risk Management
(a) Describe the organisation’s processes
for identifying and assessing climate-related
risks.
(b) Describe the organisation’s processes
for managing climate-related risks.
(c) Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organisation’s
overall risk management.
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.
(b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
(c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
Yes
Page 48
Yes
Yes
Pages 41
and 48
Page 48
Partially
Yes
Partially
Pages 41
to 47, and
48
Pages 61
to 63
Pages 41
to 47, and
48
• Conducted a detailed
• Continue to monitor the
quantitative climate change
risk assessment and
scenario analysis with
the support of an expert
external party.
risks that we have identified
and consider emerging
CROs as new climate data
and policies emerge.
• Continue to monitor actively
the changing landscape
of sustainability reporting
requirements.
• Integrate climate change
and the results of the
quantitative scenario
analysis within C&C’s
strategy and financial
planning.
• Continue to work towards
setting a SBTi approved Net
Zero target.
• Further integrated climate-
related risks within C&C’s
overall risk management
process.
• Develop bottom-up risk
assessment process
relevant to CROs.
• Roll out education and
awareness training that will
be carried at an operational
level to enhance the
Group’s risk identification
processes.
• Carbon reduction targets
• Evaluate and develop,
validated by SBTi.
• Assessed our current
metrics in relation to the
identified CROs.
where applicable, additional
metrics and targets to
support us in managing the
identified climate-related
risks and opportunities.
• Achieve our SBTi objectives.
Corporate GovernanceBusiness & StrategyFinancial Statements 50
Group Chief Financial Officer’s Review
“ Despite a challenging
trading backdrop,
the performance
of the Group’s core
brands, Bulmers and
Tennent’s, has been
resilient”
Patrick McMahon
Group Chief Executive
Officer & Group Chief
Financial Officer
Results For the Year
FY2023 is the Group’s first full financial year
without COVID-19 trading restrictions since
FY2020. COVID-19 restrictions however
gave way to fresh challenges - primarily a
high-inflation environment and associated
impact on consumers’ discretionary
spending but also strikes in the UK - which
have had an adverse impact on the drinks
and hospitality sector during the fiscal year
ended 28 February 2023. Despite these
challenges, the Group’s performance
has been resilient and underlying cash
generation robust. As a consequence,
the Board are proposing the payment of a
dividend for the first time since 2019.
C&C is reporting net revenue of €1,689.0m,
operating profit(i) of €84.1m, liquidity(ii)
of €470.3m and net debt(iii) of €152.7m.
Net debt excluding IFRS 16 Leases was
€78.9m. Adjusted diluted EPS for FY2023
is 13.4 cent. The Group’s operating profit(i)
of €84.1m, which is up from an operating
profit(i) of €47.9m in the prior year(iv), reflects
a number of factors, including a high-
inflation environment and associated impact
on consumers’ discretionary spending and
strikes in the UK.
The conflict in Ukraine continues to
contribute to heightened uncertainty and
inflationary pressures. Geopolitical events
continue to cause distortions in supply,
and inflationary pressures are negatively
impacting input costs. It is not clear to what
extent these external factors will continue
to impact the Group as supply chains and
markets adjust in the medium to long-
term, and whether product price increases
continue to mitigate input price inflation.
The rapid increases in interest rates to
counter inflation may cause a longer-term
shift in customer purchasing behaviour. In
response to this challenging and evolving
inflationary backdrop and uncertain macro
environment, the Group has implemented a
series of price increases which, alongside
a series of optimisation measures, the
Board believes will protect the medium-term
profitability of the Group.
Despite a challenging trading backdrop, the
performance of the Group’s core brands,
Bulmers and Tennent’s, has been resilient
and brand health scores and market share
for both Tennent’s and Bulmers improved
year-on-year, maintaining clear market-
leading positions(vii).
Liquidity(ii) and net debt(iii) reduction have
been a key focus for the Group throughout
FY2023, and the Group maintains a robust
liquidity position with available liquidity(ii) of
€470.3m at 28 February 2023 and at year
end achieved net debt(iii)/adjusted EBITDA(v)
of 1.3x. The Group’s target net debt(iii)/
adjusted EBITDA(v) level is between 1.5x and
2.0x.
C&C Group plc Annual Report 2023 51
During February 2023, the Group
implemented a complex Enterprise
Resource Planning (‘ERP’) system upgrade
in the Matthew Clark and Bibendum (‘MCB’)
business. The implementation is a key step
in the Group’s digital transformation and
optimisation program in GB, designed to
enhance the service the Group provides to
customers and, in time, improve efficiency
and maximise capacity utilisation through
more automated processes.
Post Balance Sheet date comment
The implementation of the ERP has taken
longer and has been significantly more
challenging and disruptive than originally
envisaged, with a consequent material
impact on service and profitability within
MCB. Service levels had largely returned
to normal levels by the end of March 2023,
however continuing system implementation
challenges, impacted by greater seasonal
trading volume, saw a deterioration in
service levels in April 2023. An improvement
through May 2023 is being achieved by
investing in material additional cost and
resources, ahead of a system fix being
implemented to restore service to normal
levels permanently.
C&C currently expects a one-off impact
of c.€25 million associated with the ERP
system disruption in FY2024, reflecting
the cost associated with restoring service
levels and lost revenue. There is expected
to be a consequential increase in working
capital in FY2024, however net debt(iii)/
adjusted EBITDA(v) is expected to remain
within the Group’s stated range of 1.5x
to 2.0x. Excluding the impact on MCB,
C&C is currently performing in line with
management expectations for FY2024
and the Board is confident in the Group’s
medium and long-term strategy and
prospects.
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 169.
Finance Costs, Income Tax and
Shareholder Returns
Net finance costs before exceptional items
of €17.3m were incurred in the financial year
(FY2022: €16.1m). As outlined previously,
the Group successfully negotiated financial
covenant waivers as a consequence of
the impact of COVID-19 with its lenders
and exceptional finance costs of €2.0m
(FY2022: €6.7m) were incurred directly
associated with these waivers including
waiver fees, increased margins payable
and other professional fees associated with
the covenant waivers. Of the €17.3m net
finance cost, €3.5m relates to the Group’s
debtor securitisation facility, €3.8m relates
to USPP notes, €4.2m relates to the Group’s
main bank lending facilities, €3.1m relates to
lease interest, €1.5m relates to amortisation
of prepaid issue costs and €1.2m relates to
other interest costs.
In FY2023, the UK trading group continued
its significant contribution to overall Group
profits. Expectedly, this impacts the Group’s
effective tax rate for FY2023 of 21.2%, 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. During the year
the Group undertook a significant self-
review exercise in Ireland and invested in
strengthening the central tax function.
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,
Subject to shareholder approval, the
Directors have proposed a final dividend of
3.79 cent per share to be paid on 21 July
2023 to ordinary shareholders registered
at the close of business on 9 June 2023.
No interim dividend was paid with respect
to FY2023; therefore, the Group’s full year
dividend will amount to 3.79 cent per share.
The proposed full year dividend per share
will represent a pay-out of 28.3% of the full
year reported adjusted diluted earnings
per share. The reinstatement of a dividend
reflects the Directors’ confidence in the
cash-generating capability of the business.
Using the number of shares in issue at 28
February 2023 and excluding those shares
for which it is assumed that the right to
dividend will be waived, this would equate
to a distribution of €15.0m. There is no scrip
dividend alternative proposed. Due to the
impact of COVID-19, total dividends for the
prior financial year were €nil.
Exceptional Items
A total net exceptional charge, before the
impact of taxation, of €0.9m was incurred
in the current financial year. In the opinion
of the Board the presentation provides
more useful analysis of the underlying
performance of the Group. Full details
of Exceptional Items are set out in detail
in note 5 to the consolidated financial
statements.
Balance Sheet Strength and Debt
Management
Balance sheet strength provides the Group
with the financial flexibility to pursue its
strategic objectives. It is the Group’s policy
to ensure that a medium/long-term debt
funding structure is in place to provide the
Group with the financial capacity to promote
the future development of the business and
to achieve its strategic objectives.
The Group manages its borrowing
requirements by entering into committed
loan facility agreements and also holds
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
Corporate GovernanceBusiness & StrategyFinancial Statements 52
Group Chief Financial Officer’s Review
(continued)
Scotland, Barclays Bank, HSBC, Rabobank
and Ulster Bank. During FY2023, Ulster
Bank left the syndicate, following the sale
of their Irish commercial loan book to Allied
Irish Bank; however, the facility remained
unchanged at €450m. In FY2021, the Group
renegotiated an extension of the repayment
schedule of the Euro term loan with its
lenders and the last instalment was paid on
12 July 2022.
In May 2023, post-FY2023 year end and
upon publication of the Group’s FY2023
results the Group has completed a
refinancing of the current multi-currency
facility. The facility is a new five-year
committed, sustainability-linked, facility
comprised of a €250m multi-currency
revolving loan facility and a €100m non-
amortising Euro term loan, both with a
maturity of FY2028. The facility offers
optionality of two one-year extensions to the
maturity date callable within 12 months and
24 months of initial drawdown respectively.
Both the multi-currency facility and the Euro
term loan were negotiated with six banks -
namely ABN Amro Bank, Allied Irish Bank,
Bank of Ireland, Barclays Bank, HSBC and
Rabobank.
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. Following the disposal of
Admiral Taverns in May 2022 for £55.0m,
the first two of three tranches of proceeds
of €42.8m (£36.7m) were received in August
2022. A condition of the negotiated waiver
agreement (which ceased in October
2022) was that these proceeds were made
available to USPP noteholders to divest.
With noteholders divesting in November
2022, the subsequent new holdings as at
28 February 2023 is €100.6m (FY2022:
€145.4m). This waiver condition ceased with
the publication of the Group’s Condensed
Consolidated Interim Financial Statements
in October 2022, and the third and final
tranche of Admiral proceeds of €20.8m
(£18.3m) received in February 2023 was
fully retained by the business.
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, however given strong return
of trading on re-opening, the Group
successfully exited waivers early with its
bank syndicate in June 2022, returning to
normal covenants at pre-COVID-19 levels.
With regard to the new facility, which will go
live in FY2024, the Group has agreed the
same covenants as the previous agreement
with the Group’s lending group.
The Group maintains a £150.0m receivables
purchase facility (£120.0m committed,
£30.0m uncommitted), renewable annually
in May. As at 28 February 2023, €94.1m of
this facility was drawn (FY2022: €84.1m).
Table 1 – Reconciliation of Adjusted EBITDA(v) to Operating profit
Cash Generation
Summary cash flow for the year ended
28 February 2023 is set out in the table
below. Overall liquidity remains robust.
The increase in the Group’s receivables
purchase programme was used to offset
the Group’s repayment of previously
deferred tax payments to the Irish Tax
Authorities, in accordance with agreed
repayment schedules, of €18.1m. The
contribution to year end Group cash from
the receivables purchase programme was
€94.1m compared to €84.1m (€80.6m on a
constant currency basis(iv)) at 28 February
2022 - a cash inflow of €13.5m(iv). Owing
to the timing of the implementation of a
Group technology project in the Group’s GB
operations (February 2023), usual year end
working capital procedures were relaxed
in favour of holding increased levels of
stock to safeguard against issues of stock
availability.
Capital expenditure in FY2023 amounted
to €15.2m, with €4.8m relating to the
technology project in the Group’s GB
operations, a key step in the digital
transformation and optimisation of the
business, and €1.8m directly related to ESG
initiatives and investments, including the
completion of the Group’s Out of Plastics
projects for owned alcohol brands in
Wellpark and Clonmel and the heat pump
project at Clonmel.
Operating profit
Exceptional items
Operating profit before exceptional items
Amortisation and depreciation charge
Adjusted EBITDA(v)
2023
€m
83.9
0.2
84.1
32.5
116.6
2022
€m
58.5
(10.6)
47.9
31.8
79.7
C&C Group plc Annual Report 2023
Table 2 – Cash flow summary
Adjusted EBITDA(v)
Working capital
Advances to customers
Net finance costs excluding exceptional finance costs
Tax paid
Pension contributions paid
Tangible/intangible expenditure
Net proceeds on disposal of property plant & equipment
Exceptional items paid
Other*
Free cash flow(vi)
Free cash flow(vi)
Net exceptional cash outflow
Free cash flow(vi) excluding net exceptional cash outflow
Reconciliation to Group Cash Flow Statement
Free cash flow(vi)
Net proceeds from exercise of share options/equity interests
Drawdown of debt
Repayment of debt
Payment of lease liabilities
Proceeds from Rights Issue
Payment of Rights Issue costs
Disposal of asset held for sale
Disposal of subsidiary/equity investment
Cash outflow re acquisition of equity accounted investments/financial assets
Net increase/(decrease) in cash
53
2022
€m
79.7
(19.2)
2.3
(16.7)
(3.2)
(0.4)
(17.1)
2.3
(12.5)
3.0
18.2
18.2
10.2
28.4
18.2
0.7
49.5
(271.7)
(21.9)
176.3
(9.2)
-
12.9
(0.3)
(45.5)
2023
€m
116.6
1.8
(3.6)
(14.2)
(12.0)
(0.5)
(15.2)
-
(4.5)
2.4
70.8
70.8
4.5
75.3
70.8
-
48.5
(108.5)
(22.5)
-
(0.7)
63.6
0.7
-
51.9
* Other relates to the add back of share options, pension contributions: adjustments from charge to payment and the add back of intangible asset impairment.
Corporate GovernanceBusiness & StrategyFinancial Statements 54
Group Chief Financial Officer’s Review
(continued)
Retirement Benefits
deferred tax are as outlined below:
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 50 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 2023, the retirement
benefits computed in accordance with IAS
19 Employee Benefits amounted to a net
surplus of €42.2m gross of deferred tax
(€29.2m surplus with respect to the Group’s
staff defined benefit pension scheme,
€9.4m surplus with respect to the Group’s
executive defined benefit pension scheme
and a €3.6m surplus with respect to the
Group’s NI defined benefit pension scheme)
and a net surplus of €36.1m net of deferred
tax.
The key factors influencing the change in
valuation of the Group’s defined benefit
pension scheme obligations gross of
Net surplus at 1 March 2022
Translation adjustment
Employer contributions paid
Credit to Other Comprehensive
Income
Charge to Income Statement
Net surplus at 28 February
2023
€m
37.6
(0.3)
0.5
4.3
0.1
42.2
The increase in the surplus from €37.6m at
28 February 2022 to a surplus of €42.2m
at 28 February 2023 is primarily due to an
actuarial gain of €4.3m over the year. The
increase in the net surplus of the Group’s
defined benefit pension schemes from the
28 February 2022 to 28 February 2023,
as computed in accordance with IAS 19
Employee Benefits, is primarily due to a
decrease in liabilities as a result of the
significant increase in bond yields over
the year, which also offsets asset value
decreases.
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, counterparty
creditworthiness 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.
Interest Rate Risk Management
With a rising interest rate environment,
following recent history of modest or
negative interest rates, the Group executed
a €60m three-year Euro interest rate hedge
against Euro debt facilities exposed to
EURIBOR fluctuations. The hedge was
executed in line with the Group guardrails
and ensures that 82% of the Group’s
interest-bearing loans and borrowings as at
28 February 2023 are now either hedged or
fixed through the USPP notes.
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.
Currency transaction exposures primarily
arise on the Sterling, US, Canadian and
Australian Dollar denominated sales of
the Group’s Euro subsidiaries and Euro
purchases in the Group’s Great Britain
(GB) business. The Group seeks 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 €11.5m
forward foreign currency cash flow hedges
outstanding.
The average rate for the translation of
results from Sterling currency operations
was €1:£0.8604 (year ended 28 February
2022: €1:£0.8524) and from US Dollar
operations was €1:$1.0438 (year ended 28
February 2022: €1:$1.1701).
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.
C&C Group plc Annual Report 2023 55
Applying the realised FY2023 foreign currency rates to the reported FY2022 revenue, net
revenue and operating profit(i) are shown in the table below:
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. 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. The Group’s policy is
to fix the cost of a certain level of energy
requirement through fixed price contractual
arrangements directly with the Group’s
energy suppliers.
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 and
has long-term apple supply contracts with
farmers in the west of England and an
agreement with farmers in Scotland for the
supply of malted 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.
Patrick McMahon
Group Chief Executive Officer & Group
Chief Financial Officer
Table 3 – Constant currency comparatives
Year ended
28 February 2022
€m
FX transaction
€m
FX translation
€m
Year ended
28 February 2022
€m
Revenue
Ireland
Branded
Distribution
Co-pack/Other
Great Britain
Branded
Distribution
Co-pack/Other
Total
Net revenue
Ireland
Branded
Distribution
Co-pack/Other
Great Britain
Branded
Distribution
Co-pack/Other
Total
Operating profit(i)
Ireland
Branded
Distribution
Great Britain
Branded
Distribution
Total
338.3
126.5
202.1
9.7
1,457.8
285.8
1,131.6
40.4
1,796.1
224.3
78.3
139.8
6.2
1,213.8
170.1
1,005.5
38.2
1,438.1
16.7
13.6
3.1
31.2
21.7
9.5
47.9
-
-
-
-
0.3
0.3
-
-
0.3
-
-
-
-
0.3
0.3
-
-
0.3
2.2
(0.2)
2.4
(2.0)
0.2
(2.2)
0.2
(0.5)
(0.3)
(0.3)
0.1
(13.2)
(2.3)
(10.5)
(0.4)
337.8
126.2
201.8
9.8
1,444.9
283.8
1,121.1
40.0
(13.7)
1,782.7
(0.5)
(0.2)
(0.3)
-
223.8
78.1
139.5
6.2
(10.8)
1,203.3
(1.2)
(9.3)
(0.3)
169.2
996.2
37.9
(11.3)
1,427.1
-
-
-
(0.2)
(0.1)
(0.1)
(0.2)
18.9
13.4
5.5
29.0
21.8
7.2
47.9
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) FY2022 comparative adjusted for constant currency (FY2022 translated at FY2023 F/X rates).
(v) Adjusted EBITDA is earnings 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 to EBITDA is set out on page 52.
(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 €94.1m (FY2022:
€84.1m reported/€80.6m on a constant currency basis) of cash as at 28 February 2023. A reconciliation of FCF to
net movement in cash per the Group’s Cash Flow Statement is set out above.
(vii) NI CGA OPM 28.02.23; ROI CGA OPM 28.02.23; NielsonIQ Total off-trade including Dunnes & Discounters 52
weeks to week ending 26.02.23 vs 52 weeks to end Feb 2020; CGA OPM 25.02.23 (GB Beer & Cider database);
IRI UK off-trade database to 19.02.23.
Corporate GovernanceBusiness & StrategyFinancial Statements
56
Responsibility Report
Our Environmental, Social and Governance (ESG) strategy is
integral to C&C Group’s purpose and our three core values:
‘Respect people and the planet’; ‘We bring joy to life’; and ‘Quality
is at our core’.
With Board level commitment to ESG, a dedicated ESG Team and
a group of ESG Champions advocating across the business, we
are delivering on our promise of embedding ESG into everything
we do at C&C.
Reduce Our
Carbon
Footprint
Sustainably Source
Our Products &
Services
Ensure Alcohol
Is Consumed
Responsibly
Focus Areas
Focus Areas
Focus Areas
• Carbon Neutral by 2050 at the latest –
Achieving our Science-Based Targets
• Supply Chain Engagement
• Enhanced Ethical Sourcing
• Energy and Water Conservation
• Fleet Decarbonisation
• Waste Minimisation
• Promoting 0%, Low Alcohol & Low-
Calorie Brands
• Alcohol Awareness Training
Alignment to UN SDGs
Alignment to UN SDGs
Alignment to UN SDGs
C&C Group plc Annual Report 2023 57
ESG Strategy:
‘Delivering to a Better World!’
Our impact materiality assessment and 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. In
FY2023, C&C Group carried out an impact materiality assessment,
engaging a wide range of stakeholders, which has further strengthened
our focused priorities.
Enhance Health,
Wellbeing & Capability
of Colleagues
Build A More
Inclusive, Diverse,
and Engaged C&C
Collaborate With
Government,
NGOs, and Industry
Programmes
Focus Areas
Focus Areas
Focus Areas:
• Health & Safety – ‘Vision Zero’
• Health & Wellbeing Employee
Resource Groups
• Diversification of Board
• Diversity, Equity & Inclusion (DE&I)
Advisory Group
• Building Meaningful Charity Partnerships
• Deposit Return Scheme Implementation
• Review of Minimum Unit Pricing in
• Training and Development
• Employee Engagement Tracking
Scotland
Alignment to UN SDGs
Alignment to UN SDGs
Alignment to UN SDGs
Corporate GovernanceBusiness & StrategyFinancial Statements 58
Responsibility Report
(continued)
Understanding our materiality process
C&C significantly improved the formality of the process supporting our materiality
assessment this year by carrying out an impact materiality assessment, drawing on
elements of guidance contained in the Global Reporting Initiative (‘GRI’) framework. We
structured our materiality approach as follows:
1
2
3
4
5
Developing a
comprehensive
list of ESG topics
Stakeholder
mapping
Stakeholder
consultation
Impact
assessment
Collation and
analysis of
results
Figure 1: Broad approach to materiality assessment
1. Developing a comprehensive list of
ESG topics
C&C carried out a preliminary desktop
review to identify the existing and emerging
trends and business risks in the alcoholic
beverage sector. This was followed by
a thorough analysis of material topics
suggested within relevant reporting
frameworks along with topics disclosed
by industry peers. These inputs were used
to identify 89 potentially relevant topics
which were further reviewed and grouped
into 26 key topics, and sub-topics in terms
of Environment, Social, Governance and
Economic.
2. Stakeholder mapping
We created an extensive list of stakeholders
across our value chain and prioritised them
through a comprehensive stakeholder
mapping exercise, analysing the influence
and dependency we have on our
stakeholders. Those with high influence
and dependency scores, as summarised
in the table below, were considered to be
significant for the purposes of engagement
in the impact materiality assessment
process.
3. Stakeholder consultation
As this was the first year completing
an impact materiality assessment, we
consulted with internal stakeholder
representatives through one-to-one
interviews to understand C&C’s impact
on the particular stakeholder group. We
also distributed surveys to employees on
a sample basis. Through the consultation
process, we incorporated our stakeholders’
perspectives, concerns and expectations
into our materiality assessment process.
4. Impact assessment
For further prioritisation of material topics,
we conducted workshops with internal
topic experts to score the impact of each
topic in terms of scale, scope, irremediable
character and likelihood in order to
determine the significance of the impacts.
5. Collation and analysis of results
Based on the results from stakeholder
consultation and impact assessment
exercise a final list of 21 topics and their
associated impacts was generated. The
below material topic list was approved by
the ESG Committee in May 2023.
Table 1: List of prioritised stakeholders
Employees
Community/Community Representatives
Consumers
Suppliers - Branded Business Partners
Suppliers – Third Party / Finished Goods
Shareholders and Lenders
Customers
Farmer Associations
Business Partners/Joint Ventures
including Agency and Invested brands
Workers in the value chain
Industry Associations
Trade Union Representatives
C&C Group plc Annual Report 2023
59
Value chain
mapping
Upstream
and
Downstream
Time
horizon
Short,
medium and
long term
Strategy &
performance*
Pillar 2 - Sustainably Source
Our Products & Services
Direction
of impact
Impact
type
Impact
materiality
level
Potential
Medium
Potential
High
Upstream
and
Downstream
Short,
medium and
long term
Potential
Medium
Operations
Potential
High
Operations
Potential
High
Downstream
Potential
Medium
Downstream
Potential
High
Downstream
Potential
Medium
Downstream
Potential
High
Potential
Medium
Potential
Medium
Potential
Medium
Potential
Medium
Potential
Medium
Potential
Medium
Upstream
and
Operations
Upstream
and
Operations
Upstream,
Operations
and
Downstream
Upstream,
Operations
and
Downstream
Upstream,
Operations
and
Downstream
Upstream,
Operations
and
Downstream
Upstream,
Operations
and
Downstream
Potential
Medium
Operations
Potential
Medium
Upstream,
Operations
and
Downstream
Potential
Medium
Downstream
Potential
Low
Downstream
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Pillar 4 - Enhance Health,
Wellbeing & Capability of
Colleagues
Pillar 2 - Sustainably Source
Our Products & Services
Pillar 4 - Enhance Health,
Wellbeing & Capability of
Colleagues
Pillar 3 - Ensure Alcohol Is
Consumed Responsibly
Pillar 1 - Reduce Our Carbon
Footprint
Pillar 1 - Reduce Our Carbon
Footprint
Pillar 2 - Sustainably Source
Our Products & Services
Pillar 4 - Enhance Health,
Wellbeing & Capability of
Colleagues
Pillar 2 - Sustainably Source
Our Products & Services
Pillar 1 - Reduce Our Carbon
Footprint
Pillar 2 - Sustainably Source
Our Products & Services
Pillar 3 - Ensure Alcohol Is
Consumed Responsibly
Figure 2: Final list of material topics
Topic
Impact generated
1. Human Rights
and sustainable
sourcing across
our Value Chain
Sourcing responsibly and having appropriate oversight
and controls across our value chain, engaging with
suppliers and distributors, understanding their
expectations and working with them to mitigate ESG
risks creates a shared economic value for society and
the environment.
Appropriate controls around responsible sourcing
are not in place or these standards are not upheld
by our suppliers, there is potential for impact on the
biodiversity of an area and/or human rights of workers
in the supply chain.
2. Employee
health, safety &
wellbeing
Appropriate processes and controls around
employees’ health and safety can create a safe working
environment.
3. Product
Quality,
Customer
Health and
Safety
4. Consumer
Engagement
and Responsible
Drinking
5. Water
6. Climate
change
and carbon
emissions
Appropriate processes and controls around employees’
health and safety are not in place or are not properly
operating, leading to health & safety risks.
Appropriate controls around product safety and
quality are not in place, hindering the quality of C&C’s
products.
Appropriate controls around product safety and quality
are in place allowing C&C to produce and deliver quality
products.
Excessive consumption of alcohol can impact
consumers’ health.
Impact created on consumers as products and
associated communications are presented to them in
an ethical and socially responsible manner and they
are able to understand the impacts on their health from
the consumption of alcohol use and the importance of
drinking responsibly.
Use of water in our production processes as well as
for cleaning or water withdrawal from high stress areas
or areas with low precipitation can impact biodiversity,
local communities and future generations.
Production processes lead to the generation of
wastewater - disposal of poor quality or untreated
wastewater results in contamination of biodiversity and
fresh water sources impacting the environment and the
local communities.
Greenhouse gas emissions in our value chain (Scope 1,
2 and 3) have adverse impacts on the environment.
Usage of fossil fuel based energy contributes to climate
change and pollution impacting the environment and
people.
Usage of renewable energy sources and improving
energy efficiency in the operations results in lower
pollution and impacts on the environment.
Achieving carbon neutrality/net zero shall significantly
reduce the amount of harmful emissions that contribute
to global warming.
7. Data privacy
If data privacy is not safeguarded, potential impact
on those whose data we hold such as employees,
customers, and vendors in the event of a data breach or
cyber-attacks and their privacy is impacted.
8. Chemical
and Hazardous
material
management
9. Air pollution
10. Clean
labelling and
responsible
marketing
Improper management of chemical and hazardous
material can cause contamination of the environment
and a safety/health hazard if not stored, managed or
disposed properly.
Direct release of pollutants such as SOx, NOx and
particulate matter generated from our manufacturing
process deteriorates the ambient air quality impacting
public health and the environment.
Products and associated communications are
presented to consumers in an ethical and socially
responsible manner to allow consumers to make an
informed choice based on accurate and fact based
information which is not misleading.
Excessive consumption of alcohol can impact
consumer health.
+
-
+
-
-
+
-
+
-
-
-
-
+
+
-
-
-
+
-
Corporate GovernanceBusiness & StrategyFinancial Statements 60
Responsibility Report
(continued)
Topic
Impact generated
11. Biodiversity
and Land
The impact on natural ecosystems due to poorly
managed agricultural land and using pesticides/
herbicides and poor cultivation practices leads to
habitat loss and degradation, erosion, species loss, air
and water pollution, soil and water contamination.
Carbon negative farming, e.g., cover cropping and
carbon sequestration, can support the creation of well
managed agricultural land, leading to healthier and
more productive ecosystems.
12. Packaging
and Circular
Economy
Technological innovations in sustainable packaging
solutions contributes to the reduction of packaging
waste and lowers carbon and the overall environmental
impact.
Creating impact on the society and environment by
encouraging consumers to dispose of their finished
products responsibly.
Improper controls around the disposal of materials
and ineffective use of alternative waste management
techniques (e.g. recycle, recover and reuse) can
generate waste and if not disposed properly can
contaminate the environment and lead to wasteful use
of resources.
13. Diversity,
Equity &
Inclusion
Promoting equality, creating unbiased working
conditions, and creating equal opportunities for our
employees.
14. Economic
Performance &
Contributions
The direct and indirect impact of an organisation’s
operations on its stakeholders and the environment
through its economic activities and monetary impact.
15. Community
engagement
Engaging and supporting communities through
investment programmes, charities and partnerships
which uplifts and positively impacts local communities.
16.
Transparency
and Reporting
17. Input Raw
Materials
The impact of applying transparency and best
practice reporting principles on ESG performance to
how we report to our stakeholders and meeting their
expectations.
Procurement practices that take into account the
quantity and quality of materials used in manufacturing
leads to more efficient use of materials and reduces the
wasteful use of resources.
18. Ethical
Business and
Resilience
Impact created on all stakeholders as a result of ethical
business practices and sustainable and resilient
business structures.
19. Employee
Engagement
and
Relationships
20. Worker
Rights,
Collective
Bargaining and
Freedom of
Association
21. Employee
Benefits and
Development
Increased employee productivity and trust due to
consistent engagement with employees.
Supporting, engaging and fostering good relationships
with Employees so that they are able to practice
freedom of association and expression leading to better
working conditions.
Rewarding talent and retaining employees by offering
competitive remuneration and through measures
that promote professional development, long-term
employability, job satisfaction and healthy working
culture.
Direction
of impact
Impact
type
Impact
materiality
level
Value chain
mapping
Time
horizon
Strategy &
performance*
-
+
+
+
-
+
+
+
+
+
+
+
+
+
Potential
Low
Upstream
and
Operations
Short,
medium and
long term
Pillar 1 - Reduce Our Carbon
Footprint
Pillar 2 - Sustainably Source
Our Products & Services
Potential
Low
Upstream
and
Operations
Short,
medium and
long term
Potential
Medium
Upstream,
Operations
and
Downstream
Potential
Medium
Downstream
Potential
Low
Upstream,
Operations
and
Downstream
Actual
Medium
Operations
Actual
Medium
Upstream,
Operations
and
Downstream
Actual
Medium
Operations
Potential
Medium
Upstream,
Operations
and
Downstream
Potential
Medium
Operations
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Short,
medium and
long term
Pillar 1 - Reduce Our Carbon
Footprint
Pillar 2 - Sustainably Source
Our Products & Services
Pillar 5 - Build A More Inclusive,
Diverse, and Engaged C&C
Pillar 2 - Sustainably Source
Our Products & Services
Pillar 6 - Collaborate With
Government, NGOs, and
Industry Programmes
Pillar 6 - Collaborate With
Government, NGOs, and
Industry Programmes
All ESG Pillars
Short,
medium and
long term
Pillar 2 - Sustainably
Source Our Products &
Services
Potential
Medium
Upstream,
Operations
and
Downstream
Short,
medium and
long term
Pillar 2 - Sustainably
Source Our Products &
Services
Potential
Medium
Operations
Potential
Medium
Operations
Short,
medium and
long term
Pillar 5 - Build A More
Inclusive, Diverse, and
Engaged C&C
Short,
medium and
long term
Pillar 5 - Build A More
Inclusive, Diverse, and
Engaged C&C
Potential
Medium
Operations
Short,
medium and
long term
Pillar 4 - Enhance Health,
Wellbeing & Capability of
Colleagues
Future Reporting
We understand that external stakeholders’
inputs are very valuable, especially
when conducting an impact materiality
assessment and gauging perspective from
an external point of view. It familiarises
us with the topics that are most material
to our stakeholders and also provides an
opportunity to share information about our
strategy and focus areas, aiding in creating
a transparent relationship between us. In
future reporting periods, engaging directly
with external stakeholders shall remain a
key focus area. We are conscious of the
need to prepare for the expected future
reporting requirements under the Corporate
Sustainability Reporting Directive (‘CSRD’)
which includes the completion of a double
materiality assessment.
C&C Group plc Annual Report 2023
61
Reducing carbon emissions
Reduce Our Carbon
Footprint
Our carbon emission reduction targets are validated by the Science Based Targets initiative
(‘SBTi’). We commit to reduce absolute Scope 1 and 2 greenhouse gas emissions by 35%
by 2030 from a 2020 base year. To meet our Scope 3 emissions target of 25% reduction by
2030, we will work with our supply chain to set ambitious targets. 67% of C&C’s suppliers
and customers by emissions will have science-based targets by 2026.
Target
KPI
Reduce direct operations emissions
by 35% by 2030 (Scope 1 and 2)
Reduce value chain emissions by
25% by 2030 (Scope 3)
C&C’s targeted supply chain partners
will have science-based targets by
2026
Conservation of Energy
19% location based reduction from
FY2020 (base year)
31% market based reduction from
FY2020 (base year)
23% reduction from FY2020 (base year)
67% of supply chain by emissions
committed to science-based targets
The Group is committed to transitioning our operations to clean energy sources in line
with our carbon reduction targets. We have committed to switching to renewable energy
where possible, and c. 91% of our total electricity use for the Group is renewably sourced.
We have recently confirmed a Corporate Purchase Power Agreement for our Clonmel
manufacturing site, obtaining electricity from the Cronalaght Wind Farm in Donegal.
We identify and manage 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.
Our Energy Consumption position is set out below.
FY2019-20
FY2020-21
FY2021-22
FY2022-23
Change YoY
Change V FY2019-
20
Natural Gas
88,630,000
83,199,000
89,904,000
79,232,000
LPG
LNG
Diesel
HVO
Petrol
Wood
Biogas
Electricity
2,332,000
3,556,000
3,949,000
3,844,000
5,591,000
5,007,000
-
-
33,257,000
15,329,000
24,618,000
25,675,000
4%
450,000
111,000
346,000
1,303,000
3,635,000
Kerosene/Fuel Oil
65,000
209,000
208,000
209,000
-
-
-
-
83,000
7,735,289
9,189,000
4,778,000
-48%
5657%
41,401,000
41,187,738
41,900,128
40,467,461
(Of which renewables)
14,737,000
14,946,029
39,486,899
36,844,224
Total Scope 1
Total Scope 2
130,325,000
107,411,000
119,025,000
113,898,000
41,401,000
41,187,738
41,900,128
40,467,461
Total Scope 1 and 2
171,726,000
148,598,738
160,925,128
154,365,461
-12%
-3%
277%
0%
-11%
65%
-100%
-23%
190%
222%
-3%
-7%
-4%
-3%
-4%
-2%
150%
-13%
-2%
-10%
Corporate GovernanceBusiness & StrategyFinancial Statements
62
Responsibility Report
(continued)
Scope 1, 2 and 3 emissions
The table below outlines C&C Group’s
carbon emissions in FY2023, including
Scope 1 and Scope 2 (with location and
market-based emissions) and a detailed
breakdown of Scope 3 emissions. To drive
further progress in C&C’s de-carbonisation
efforts, the Group has set a target under
the 2022 Long Term Incentive Plan (‘LTIP’)
to reduce its Scope 1 emissions and Scope
2 emissions over the three financial years
ending FY2025. The incentive relates to
delivery of a 12% (4,500 tonnes) reduction
in Scope 1 and 2 carbon emissions (versus
FY2020).
C&C Group’s Scope 3 emissions (including
Purchased Goods, Use of Sold Product,
End of Life Treatment and other indirect
emissions) account for approx. 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 is part of the CDP
Supply Chain Screening Programme,
working closely with key supply chain
partners and requesting 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. We encourage
our key supply chain partners to disclose
their carbon footprint via CDP as C&C has
done since 2010.
Scope 1
Scope 2 - Location based figure
Scope 2 - Market based figure
Scope 3
Purchased Goods (Total for CDP)
PG Subtotal - Agriculture
PG Subtotal - Brewing Ingredients
PG Subtotal - Packaging
PG Subtotal - Distributed product
Capital Goods
Investments
Fuel not in Scope 1 & 2
Upstream Transport
Waste
Business Travel
Employee Commuting
Downstream Transport
Use of Sold Products (Total for CDP)
Use - Own Products
Use - Distributed Products
End of Life Treatment (Total for CDP)
End of Life - Own Products
End of Life - Distributed Products
Total Footprint (Location-based)
Total Footprint (Market-based)
Total C&C 2022-23
21,989
9,605
588
555,434
383,186
33,750
20,088
53,270
276,078
10,047
555
7,164
48,698
1,411
1,100
2,225
37,819
51,756
10,733
41,023
11,886
1,631
10,255
587,029
578,012
C&C Group plc Annual Report 2023
63
Initiative
Progress
Targets
Science Based
Target Initiative
(‘SBTi’)
C&C Group’s emissions reduction targets, which are grounded in
climate science, received independent validation and approval by
the Science Based Targets initiative (‘SBTi’) in January 2023.
Energy Conservation
Summary of Energy Conservation Projects implemented:
• Solar Panels (Bulmers Clonmel)
• Boiler house Energy Recovery (Tennent’s Wellpark)
• AD Plant Heat Recovery (Tennent’s Wellpark)
• Hot Liquor Tank Replacement (Tennent’s Wellpark)
• LED Lighting Upgrades (C&C depot sites)
Estimated reduction of 2,000 tonnes CO2e
Fleet
Decarbonisation
Out of Plastics
Summary of Fleet Decarbonisation Projects implemented:
Alternative Fuel Trials: Hydrotreated Vegetable Oil (‘HVO’) trials at
two C&C depots (Bedford and Runcorn) throughout 2022.
Estimated CO2 reduction of 900 tonnes CO2e Electric Vehicle
(‘EV’) Trials: Trials at two sites (Park Royal depot and Wellpark
Brewery) was the first stage in electrifying the fleet as part of C&C’s
decarbonisation strategy. This process has been successful in
proving the capability and the limits of this type of vehicle in our
operations. In addition, C&C completed a three-week trial with
Volvo in December 2022 in partnership with the Scottish Wholesale
Association.
To reduce our environmental impact and ecological footprint, all
C&C Group’s canned product is now packaged in fully recyclable
cardboard, removing more than 200 million plastic rings per
annum. The investment also recognises the future market changes
including the Deposit Return Scheme (‘DRS’) introduction in
Scotland, planned for March 2024 and in Ireland, February 2024.
C&C is committed to reducing absolute
Scope 1 and Scope 2 greenhouse gas
emissions by 35% by 2030 (versus
FY2020 base year). To achieve the
target of reducing Scope 3 emissions
by 25% (versus FY2020 base year) by
2030, the Group has also committed
that suppliers and customers making up
67% of 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.
Continued commitment to energy
conservation initiatives at sites across
C&C Group. In the next financial year,
installation of a heat pump is being
explored at two manufacturing sites
(Bulmers Clonmel and Tennent’s
Wellpark) with the potential to provide an
annual carbon reduction saving of over
3,000 tonnes CO2e.
Continue and expand trials across C&C’s
distribution network, involving larger EV
vehicles and alternative fuels.
Work with Scottish Wholesale
Association and other partners
across UK and Ireland to explore
new technologies to accelerate fleet
decarbonisation.
Continued commitment to UK Plastics
Pact targets and exploration of circular
economy opportunities to improve reuse
and recycling across the Group.
FT Europe's Climate
Leaders 2023
For the third year in succession, C&C has been identified, by the
Financial Times and leading research agency Statista, as being
one of the most ambitious European companies in reducing their
greenhouse gas emissions relative to their revenue.
Maintain position as an ambitious
Climate Leader in Food and Beverage
category of FT’s Climate Leaders 2024.
Corporate GovernanceBusiness & StrategyFinancial Statements 100% of our manufacturing 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.
In 2022, as part of a Scottish Government
funded initiative, Tennent’s conducted
a Circular Economy Assessment with
Zero Waste Scotland (‘ZWS’) and leading
environmental consultancy, Eunomia. The
results of this assessment have shaped
our Group approach and as part of our
continued commitment to circular economy
principles, the Group is exploring further
circular opportunities in our operations and
to develop a pathway towards adoption
and implementation of those opportunities.
Through Glasgow Chamber of Commerce’s
‘Step Up to Net Zero’ programme,
Tennent’s has recruited a placement to
deliver on our Circular Economy action plan.
64
Responsibility Report
(continued)
Streamlining our Logistics
Operations
Water Optimisation and
Conservation
In providing our customers with a complete
drinks distribution service, transportation
and logistics are a significant part of C&C’s
carbon footprint. Through our ‘end-to-end’
supply chain model, we have approximately
360 vehicles in operation across the UK
and Ireland. Our Supply Chain Logistics
and Procurement teams have a dedicated
focus on Continuous Improvement, using
our Group-wide logistics forum to share
best practice and efficiencies to consolidate
deliveries, reduce transport miles and
minimise environmental impact. Using our
fleet management platform, Microlise, our
teams have real-time data on location,
driver efficiencies and utilisation, as well as
safety and compliance. This system allows
a data-driven approach, improving route
optimisation across our secondary network,
reducing fuel consumption and driving
efficiencies.
Across 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%.
C&C Group’s ‘Fleet Decarbonisation
Transition Plan’ is focused on utilising a
range of technologies and processes to
meet our ambitious carbon reduction
targets. The ten-year plan prioritises
measures including Continuous
Improvement initiatives, alternative
and decarbonising fuels, as well as a
transition to battery electric vehicles
(‘BEVs’) and hydrogen vehicles (‘HVs’)
when infrastructure and equipment is
commercially available. As a Group, we
are exploring all tools and technologies
available to reach our carbon reduction
targets in fleet decarbonisation.
As part of our sustainability commitment,
we remain committed to reducing our water
usage. C&C Group has a water efficiency
target of 3.4:1 (Water Ratio of hectolitres
extracted versus hectolitres produced),
and is committed to maintain this position.
Our water efficiency KPI shows that we
have maintained our water ratio in FY2023,
meeting our target.
Maintaining our current efficiency rating
requires investment across the Group. We
have conducted an analysis of improvement
opportunities and these have been reflected
in Capex projects including:
• Upgrading can filler at Wellpark
• Bottle Pasteuriser Filler at Wellpark
• Filtration Plant water recovery at Wellpark
• Upgrade to pasteuriser at Clonmel
• Packaging water recovery at Clonmel
In addition, 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%.
In 2022, C&C again participated in the CDP
Water Security questionnaire and achieved
an improved score, moving from a C rating
to a B-.
Waste Minimisation and
Circularity
Across our manufacturing sites, C&C
Group has maintained a commitment
to Zero Waste to Landfill. Our waste
management policy is guided by a waste
hierarchy approach, prioritising prevention,
reuse and recycling where possible. In our
manufacturing sites, waste materials are
source-segregated, and in all operations
waste minimisation and prevention is
prioritised. We routinely monitor our waste
streams for contamination and target
improvement through our waste KPIs.
C&C Group plc Annual Report 2023 65
Collaboration with our Apple and
Barley Growers
C&C Group is committed to sourcing
our raw materials from local sustainable
sources. All apples crushed at the Clonmel
site to produce 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 is 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 patron 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 Food Standard Agency
(‘FSA’) Gold accredited and the balance is
Red Tractor assured, which ensures the
best environmental practices are adhered
to.
Sustainably Source
Our Products &
Services
Case study:
Bulmers Always Begins with
a Bee Campaign
The bees pollinate the blossoms, that
become the buds, that give life to the 17
varieties of apples that go into every pint
of Bulmers. But Ireland’s bee population
is vital to more than Bulmers – bee
pollination is vital to all life.
Building on the success of our campaign
in FY2022, this year, Bulmers extended
its efforts to save Ireland’s bees via
an instant win on-pack promotion on
Original and Light 8 packs, that gave
consumers the opportunity to win an
apple tree. In addition, 10c from every
pack sold went to All Ireland Pollinator
Plan (AIPP) for the future of Ireland’s
Bees, raising €20,000. On World Bee
Day, May 20th, Bulmers distributed
a pack of wild bee flower seeds to
colleagues to encourage them to ‘Go
Wild’ and play their part in providing
much needed shelter to Ireland’s bees.
Corporate GovernanceBusiness & StrategyFinancial Statements Bibendum
At Bibendum, furthering our sustainability
agenda is a question of culture – ensuring
the right decisions are made at every big
and small step of the way. Bibendum’s Vivid
charter was founded in 2008, and we are
one of the few UK drinks businesses with
ISO 14001 accreditation, first awarded in
2011.
Bibendum partners with mindful producers,
while pursuing a positive impact on the
planet and communities. Collaboration
focuses on practices such as organic
and biodynamic viticulture, ISO 14001
certification, carbon emission reduction,
water management, waste reduction and
recycling, and ethical working conditions.
There is a consistent focus on sustainability
throughout our events and communications
in the year. Bibendum has recently
joined the Harpers Sustainability Charter
as a Sustainability Champion, and the
Sustainable Wine Roundtable. Both
membership organisations provide a greater
opportunity for knowledge sharing and
collaboration across the wine producing
supply chain.
66
Responsibility Report
(continued)
Supply Chain Engagement
C&C’s Ethical and Sustainable Procurement (‘E&SP’) Strategy is focused on proactive
engagement with our supply chain, with key objectives targeting social and ethical
standards and environmental issues, including climate change. Through our E&SP
approach, we request all Suppliers comply with C&C’s Code of Conduct and Modern
Slavey policy as a prerequisite of trading with our business. All Suppliers are required to
complete our E&SP questionnaire, which confirms partners’ commitment to environmental
management, health and safety, sustainability, DE&I, ethical working practices and overall
corporate social responsibility. In addition, audits and reviews across the supply chain –
during initial procurement and throughout the contractual agreement – provide assurance
where required.
Initiative
Progress
Targets
Ethical and
Sustainable
Procurement
(‘E&SP’) Strategy
Commitment to Code of
Conduct / Modern Slavery
compliance.
Undertake E&SP benchmarking
review with external consultants
to create organisational roadmap
to move beyond compliance.
E&SP KPIs:
Code of Conduct / Modern
Slavery sign up – 81% achieved
versus 100% target.
CDP Supplier Screening sign
up – 67 suppliers versus 55
suppliers target
Engage strategic supply chain
partners in CDP and request
that they 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.
Deliver a CDP Supplier Webinar
in FY2024 to support suppliers in
their disclosure.
Maintain ISO 14001 certification
and extend to additional sites.
Maintain AA rating in FY2024.
CDP Supply
Chain
Engagement
Programme
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.
ISO 14001
MSCI ESG
Ratings
The Group has achieved the
ISO 14001 certification for
its Clonmel, Matthew Clark
(Whitchurch, although scope
covers all vehicle emissions
including commercial fleet
and all waste and packaging
requirements) and Bibendum
sites.
Progression in ranking to
AA (Jan 2023) versus A (Feb
2022).
C&C Group plc Annual Report 2023
67
Alcohol Awareness Training
C&C is 100% committed to the responsible
promotion of alcohol and adherence
to all legislation, and the self- and co-
regulatory codes in the UK and Ireland.
All C&C colleagues working in marketing
and communications undertake annual
mandatory training on the CAP/BCAP and
the Portman Group Codes of Practice in the
UK and CopyClear in Ireland. This builds
colleague capability, protects our license to
operate, our brands’ reputation and, most
importantly, our consumers and society.
This training is mandatory for relevant
colleagues and must be undertaken
annually. All new colleagues, in marketing,
communications, corporate affairs and legal
functions, should undertake the training
within three months of starting their role.
Launched in September 2022, by February
2023, 54% of colleagues had completed
this training.
The Group also partners with leading
alcohol charity, Drinkaware, to provide our
colleagues access to e-learning resources
to improve alcohol awareness and
understanding. The training is designed to
support colleagues’ health and wellbeing
and ensure a safe working environment.
Supporting Drinkaware and
Drinkaware.ie
We include “Drinkaware” & “Drinkaware.
ie” and responsible drinking referencing
prominently on all of our owned brand
communications (including TV, out of home,
social media and on our sponsorship media
assets) in the UK and Ireland.
Portman Group
C&C continue to support Portman Group
aims to deliver higher standards of best
practice and ensure the responsible
marketing and promotion of alcoholic
products.
The Group accesses Portman Group
services including training and advice
on how to market in line with Codes of
Practice and research around alcohol
trends. C&C participates fully in all Portman
forums including Council and Public Affairs
Directors meetings and supports their
work on key industry initiatives including
Alcoholic Drinks Industry Forum, low
and no alcohol industry roundtable and
responses to Government consultations
including Scottish Government Alcohol
Marketing Restrictions and UK Government
Mandatory Labelling proposals.
Ensure Alcohol
Is Consumed
Responsibly
Alcohol Awareness
At C&C, we advocate 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.
Promoting 0%, Low Alcohol &
Low-Calorie Variants
Recognising the evolving trends around
consumer moderation and reduced
consumption, C&C has introduced low/
no alcohol and low-calorie variants of
its core brands. This is supplemented
by the Group offering a broad range of
third party low/no alcohol and low-calorie
variants to meet increasing customer and
consumer demand. Since FY2019, low/
no volume distributed by C&C has grown
52%.
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.
In June 2022, the ASA challenged C&C
Group regarding some social posts
on the Tennent’s Facebook page. The
word ‘just’ was used ahead of the
calorie content for some posts regarding
Tennent’s Light – “just 66 calories”,
which is in breach of the CAP code for
advertising of nutritional information on
alcoholic drinks. As soon as this was
flagged, it was immediately resolved on
our channels.
Corporate GovernanceBusiness & StrategyFinancial Statements 68
Responsibility Report
(continued)
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
C&C has launched a new three-year
Health and Safety Strategy with a vision
of achieving zero lost time accidents
across the Group with the ultimate
purpose to ‘provide a safe and healthy
workplace’.
The “Vision Zero” strategy focuses on
four priorities:
• Regulatory Compliance
• Designing a safe and healthy
workplace
• Fostering a culture of proactive health
& safety
• Monitoring Performance
To help improve Health and Safety
across the Group, we set KPIs to reduce
both Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations
(‘RIDDOR’) and Lost Time Accidents
(‘LTAs’), for employees, agency staff and
contractors, by 10% (versus FY2022).
We failed to achieve these KPIs in
FY2023. Tracking shows that the highest
incidence of C&C RIDDOR and LTAs
occur in Warehousing and Distribution
sites across the Group, however
Wellpark Brewery and a number of
depots achieved a full year without any
LTAs .
Challenges in recruitment of permanent staff and resulting overreliance on agency
colleagues contribute to C&C failing to hit RIDDOR and LTA KPIs. We will see improved
performance as recruitment challenges have started to stabilise, we deliver enhanced H&S
training for all colleagues and embed our new Health, Safety and Operational Risk Strategy.
We have seen some improvement in RIDDOR and LTA since November, and we have
finally returned to pre-COVID rates (although the three sites that are still having difficulty in
recruiting permanent staff account for the highest accident rates).
KPI
Reduce by 10% YOY - RIDDOR - Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations
(incidents per 100,000 hrs)
Reduce by 10% YOY - LTAR - Lost Time Incident Rate
(incidents per 100 employees)
Restated
KPI (10%
reduction)
Performance
FY23
FY22 Base
0.37
0.33
0.65
1.97
1.77
1.85
We anticipate further improvement via the launch of our new Health and Safety strategy and
as we rely less on agency staff.
Health & Wellbeing
Health and wellbeing external support
systems
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, colleagues can access Health
Screening Plus which offers on site
employee health screening and lifestyle
assessments. In the UK, we have launched
C&C’s Aviva DigiCare+ Workplace, a free
employee healthcare benefit. Accessed via
an app, colleagues can access five different
services: an annual Health Check, Digital
GP, Second Medical Opinion, Mental Health
Consultation and Nutritional Consultation.
During the year, free influenza jabs were
again offered to all colleagues across the
Group.
C&C Group plc Annual Report 2023 69
Employee Resource Groups (‘ERGs’)
C&C has four Executive Committee-sponsored Employee Resource Groups, to enhance our Health and Wellbeing efforts in key areas
identified by colleagues:
Parents Returning to
Work - how we can support
working parents.
Initiatives include:
• Reviewing family leave
policies.
• Removing barriers for
career development.
• Building on a culture of
flexible working.
Menopause – to highlight
that menopause is an
“everyone” issue
Initiatives include:
• Partnering with The
Menopause Hub.
• Developing programmes
around: Safe Space to
Talk & Listen; Education &
Awareness; and Policy &
Support.
Mental Health - to ensure
no colleague faces a mental
health problem alone.
Initiatives include:
• Over 1,200 colleagues
joined the World Mental
Health Day video call
in October 2022 where
Sir Lenny Henry shared
his own mental health
experience and journey.
• Time to Talk Day February
– encouraging colleagues
to make space for
conversations on Mental
Health.
Physical Health - how we
prioritise our physical wellbeing
during times of stress and
different ways of working.
Initiatives include:
• Get Fit for Spring Campaign.
• ‘Health Heroes’ sharing their
journey to inspire colleagues.
• Incentives and giveaways
inc. water bottles, Fitbit,
bikes and gym membership.
• Blue Monday – insulated,
reusable water bottles
distributed to all colleagues.
• Business partnership with
Love to Ride cycle scheme
launched – colleagues can
use the online community to
log their cycle rides and win
prizes.
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 these critical
areas with their ERG Members.
Mental Health First Aiders
To enhance the external Employee Assistance Programmes that are in place across C&C
Group, we have already introduced c.50 fully certified Mental Health First Aiders (‘MHFAs’),
with a commitment to training an additional 100 MHFAs in FY2024. These volunteers
provide the initial help to any colleague who is 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.
Supporting our MHFAs with the skills,
knowledge and confidence to assist our
colleagues, their family members, friends,
and others is a key differentiator in our
business. The C&C Group Mental Health
First Aid policy further supplements the
training provided to our colleagues and our
community, and providing clear guidance
on the role and expectations is essential
to foster a culture of trust and encourage
colleagues to seek support.
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 awareness
The mental health first aid training aims to teach colleagues how to identify, understand and
help someone who may be experiencing a mental health issue.
Corporate GovernanceBusiness & StrategyFinancial Statements 70
Responsibility Report
(continued)
Remote working
To facilitate and support remote working,
the Group operates a 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.
C&C4Me Platform
In FY2023, the Group launched C&C4Me,
allowing colleagues’ access to hundreds
of offers to help them save money on
everyday purchases, covering groceries
and clothing, entertainment, tech, and
travel. The platform offers the very best
deals and discounts, allowing colleagues
to make meaningful savings every time
them shop. Approximately 150 colleagues
per month are accessing C&C4Me and
have made savings of c.€17,000 (£15,000)
in the four months since launch.
Case study:
Our journey to becoming a Cycling Friendly Employer
In 2022, C&C Group conducted an
annual employee travel survey to gather
baseline data on how colleagues travel
to and from their place of work. Results
showed that approximately 10% of
C&C’s workforce cycled to work, and
an additional 16% of respondents
highlighted that they would be more
likely to have an active commute to
work if workplace facilities and policies
were improved. As part of C&C Group’s
journey to becoming a Cycling Friendly
Employer, we are working to improve
access for colleagues.
Through grant funding from Cycling
Scotland, new bicycle shelter facilities
have been installed at three Tennent’s sites
(Wellpark, Cambuslang and Newbridge),
with colleagues also having access to bike
maintenance equipment on-site. At C&C’s
new Bristol office, colleagues have access
to upgraded bicycle shelter facilities as well
as lockers and showers. C&C’s Cycle to
Work policy has been improved to increase
the value of bicycles that colleagues can
purchase through the scheme, and the
Group has a company account with the
Love to Ride platform: a supportive bike
riding encouragement platform and
online community for all levels of riders.
In addition, across the Group, cycling
events have been arranged to support
colleagues in accessing active travel
and social cycling opportunities. In May
2023, a Dr Bike event was hosted at our
Cambuslang depot offering colleagues
free bicycle repairs and maintenance
support.
C&C Group plc Annual Report 2023 71
Learning and Development
Programmes
Our People Plan is guided by our leadership behaviours framework, aligned with our three
values of “Joy”, “Respect” and “Quality”.
We are committed to rewarding and
recognising our colleagues while continuing
to invest in their career and personal
development and we aspire to have the
most talented, engaged and inspired
colleagues in our industry.
Our vision is to be a purpose-led employer
of choice that enables, supports, engages
and develops great leaders and colleagues
by delivering an outstanding employee
experience.
C&C is committed to professional
development across all functions, including
Finance, Marketing, Sales, Operations
and HR. Support covers further education
and professional exams including SVQs in
Management, MBAs, CIMA, CIPD and IBD
qualifications.
Following a strategic review of our approach
to Learning and Development in FY2022,
C&C Group has introduced our People
Growth agenda under 5 key pillars.
Develop the best
leaders
Develop our
differentiating
capabilities
• Leadership standards
• Leadership
• Capability gap
assessment
C&C Group Leadership Behaviours
We are rigorous
logical and
creative
We win hearts
and inspire
others
We deliver
results and
create a culture
of winning
together
Quality
Joy
Respect
We build
everyone’s
confidence and
foster the
courage to act
We support
and develop
all our people
to be their best
We build trust
Execute people
processes
consistently &
perfectly
Live our Values,
Behaviours and
Culture
Bring the outside
in to win!
• Deliver “one C&C”
• More structured,
• C&C “employer brand”
programme
development
• Structured capability
• Organisational design
• Continuous leadership
measurement
assessment (360
development
feedback)
• Continuous
external/competitor
benchmarking
• Rewarding the “how”
as well as the “what”
& delivery
• Performance
management
• Talent management
• Career development
and pipeline
management
• Compensation &
Benefits
• Group Policy
deployment
development
• Attracting talent
through technology
• Leaders as talent
magnets
• Pro-active talent
targeting
deeper, company wide
communication
• Embed “one C&C”
mindset
• Clear feedback loops,
including people &
technology
• Accelerate Diversity,
Equity and Inclusion
journey
Corporate GovernanceBusiness & StrategyFinancial Statements 72
Responsibility Report
(continued)
The Group will create a leadership culture based on our behaviours, focusing on the following five areas:
Leadership
Development
• Development plans
based on 360
feedback -Cohorts
from October
• Programmes develop
our behaviours i.e ILM
Level 3 & Level 5 from
2023
Performance
Recruitment
Coaching &
Mentoring
Leadership
Careers
• Personal Development
Objectives from March
2023
• External assessments
for selected Senior
Positions 2023
• Check-ins
• Behavioural interview
• Coaching
• Future leaders
conversations based
on behavioural
objectives
assessed against
framework
• Career progression
Conversations –
behavioural examples
supporting feedback
questions 2023
• Frames mentoring
conversations for
future leaders
based on role
modelling
Leading to Win
At C&C Group, we recognise that the
success of our business is dependent on
the success of our people and that requires
great leadership. The Group has partnered
with Aspire Development Ltd. to develop
a leadership development programme
that will help current and future leaders to
consider the impact they have as a leader,
expose them to new insights and different
ways of thinking about themselves, their
team and their contribution to the success
of our business. This learning is completely
aligned with C&C vision, values and
strategic objectives.
This certified training is aimed at two levels
of colleagues – Foundation and Advanced
and will last between thirteen and fifteen
months.
Cyber Training
Recognising that human error is involved
in more than 90% of security breaches,
over the last year our Technology and
Transformation team have rolled out security
awareness training to colleagues, to help
minimise risk. This training covers monthly
phishing tests where users clicking on a test
link are enrolled in phish awareness training.
In August 2022, we ran the first all-
C&C Security Awareness Training as a
competition and over 900 colleagues
successfully completed the course and test.
We followed this up with a second invite for
Security Awareness Training and a further
500 colleagues completed the course and
test. For 2023, we kicked off the training
in March 2023 with 1,464 successful
completions and are following up with those
that have yet to do so (any new starters are
automatically enrolled). Over the last year,
our phish tests led to over 500 test URLs
being clicked and users enrolled in specific
phishing awareness training.
Embed key codes including
Employee Code of Conduct
The Group continues to roll out online
policy compliance training, created by legal
specialists, ZING (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
C&C Group plc Annual Report 2023 73
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.
Diversity, Equity & Inclusion
(‘DE&I’) Advisory Group
In July 2022, the Group established
our DE&I Advisory Group, represented
by colleagues across business areas
and locations, with a clear focus on
understanding our colleague population to
drive our DE&I Strategy.
To inform our DE&I strategy and guide
our actions, the Group is utilising the
Global Diversity, Equity and Inclusion
Benchmarking Framework and
collaborating on the industry Diversity in
Grocery Partnership. In addition, C&C
has engaged a leading DE&I consultant
to support our efforts by conducting a
robust audit to provide honest, detailed
and constructive feedback and create a
roadmap of how the Group can improve its
DE&I practices and approach. Colleagues
acknowledge our efforts in this critical
area with November 2022 Peakon Survey
Diversity and Inclusion score of 7.7, +0.3
(versus May 2022).
Gender Pay Group Reporting
We published our inaugural gender pay
gap report in December 2022, in line with
the regulatory requirements for companies
in Ireland having published gender pay
gap reports in the UK since the regulations
were introduced in 2019. This constitutes
an opportunity to further assess and report
on our strategy and progress towards
promoting diversity, equity and inclusion
at C&C, and as we build a culture where
everyone can progress. Ensuring that our
colleagues are paid a fair and equitable
rate for the work they do, regardless of
gender or other differences, is of extreme
importance to the Board. Outlined in the
report are two medium term priorities to
continue to drive progress in this critically
important area:
• Attracting female talent into our
organisation into roles and business
areas that have previously been less
gender balanced.
• Retaining female talent in our organisation
by identifying personal growth and
development opportunities and
embedding clear succession planning.
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.
Build A More
Inclusive, Diverse, and
Engaged C&C
Diversity, Equity and Inclusion
At C&C, we seek to embrace diversity,
equity and inclusion across our business
and look to create a welcoming culture
where everyone feels comfortable to be
themselves. We champion individuality
and believe diverse perspectives help us
create a better workplace for ourselves
and others.
We strive to provide a safe, caring
and supportive work environment for
all our colleagues. We treat everyone
with fairness, respect and honesty.
We encourage the same approach
among our customers and suppliers.
By employing people who reflect the
diverse nature of society we will attract,
engage and inspire colleagues to be the
best version of themselves every day
and make C&C a great place to work for
everyone.
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
Corporate GovernanceBusiness & StrategyFinancial Statements 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 Statements
are available on our website.
Anti-Bribery and Corruption
Our Anti-Bribery and Corruption Policy
and accompanying training materials 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 FY2023, no
incidences of bribery or corruption were
uncovered across the Group.
74
Responsibility Report
(continued)
Our aim will always be to make C&C a
great place to work for all colleagues with
the Peakon survey being a key channel
to capture their views. In 2022, all C&C
colleagues were surveyed via Peakon
in May and November. These surveys,
submitted anonymously, look to identify
where we are as a business and how
our values reflect colleagues’ experience
working at C&C.
Peakon survey results are shared with the
Executive Committee and the Board and
cascaded to direct reports and broader
business areas. Actions taken based on
survey feedback include a review of reward
and remuneration, engaging colleagues
on our business strategy via weekly and
monthly calls and face-to-face regional
roadshows, and a review of colleague
benefits. Survey feedback has also resulted
in the establishment of our four ERGs,
focusing on mental health and wellbeing,
physical health, supporting working parents
and menopause and our DE&I Advisory
Group. These colleague-led forums
promote a culture of diversity and inclusion
across our business, with many colleagues
having personal interest and experience
in these areas, which helps guide our
business and informs decision making. In
FY2023, engagement survey participation
rates reached industry-leading levels and
we made significant, positive improvement
on our engagement score.
The Group recognises that communication
is a priority in improving colleague
understanding of strategy & mission.
Alongside weekly briefings to managers
and monthly briefings to all colleagues,
roadshows were held in GB and Ireland
to present and discuss brand plans and
receive feedback from colleagues. In
October 2022 and again in March 2023,
sessions to communicate strategy were
held with senior leaders. The content from
these Forum sessions is cascaded across
the business, to allow colleagues to identify
how C&C’s purpose, values and strategy
can be embedded in their day-to-day work.
Colleague “Our Forum” sessions were again
held across the Group, 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 or 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.
Whistleblowing – Vault
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 digital application that
allows colleagues to raise any concerns
they may have about themselves, a
colleague or our working environment.
There were 40 instances of “concern or
suspicion related to ethical or compliance
related wrongdoing in the Group” raised
via Vault in FY2023 (out of 95 instances of
concerns raised across 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
C&C Group plc Annual Report 2023 75
Collaborate With
Government,
NGOs, and Industry
Programmes
Building Meaningful Charity
Partnerships
The Group is committed to the
communities in which it operates and
undertakes a range of initiatives that
benefit our local communities.
Case Study:
Big Issue Group
In September 2022, C&C announced a
three-year partnership with the Big Issue
Group (‘BIG’), who’s aim is to change
lives through enterprise for marginalised
communities across Great Britain. This
partnership is aligned with our charitable
agenda across homelessness, addiction,
mental health, and poverty. Working
with C&C colleagues and the brilliant
team at the BIG, we are looking to play
a meaningful part in tackling these
complex social issues.
In the first six months of the BIG
partnership, C&C has hosted three
Vendor Days – in Glasgow, Bristol and
London – providing an opportunity
for colleagues to spend a day with a
Big Issue Vendor selling copies of the
magazine. Money raised from sales
goes towards helping vendors reach
their aspirations for the future. For C&C
colleagues, the Vendor Days give our
teams first-hand experience of working
with a vendor, sharing expertise,
advice, and guidance, as well as better
understanding the positive impact that
BIG makes to thousands of peoples’
lives.
The partnership focuses on four priorities:
1
2
Big Issue Foundation
and Big Issue Pitch
Supporting vendors with immersion
and education opportunities,
allowing them to access C&C sites
and facilities and to engage and sell
magazines to colleagues through
Sheltered Pitches.
Employability
Programme – Big
Issue Recruit
Offering opportunities for vulnerable
people into work and mainstream
living. We have committed to placing
15 Vendors each year in employment
across the Group, with our first 6
placements joining in May 2023.
3
4
Big Issue
Breakthrough
Mentoring opportunities between
C&C colleagues and Big Issue
vendors, offering practical training,
support, and skills development. C&C
Group will deliver a minimum of 50
mentoring / volunteering opportunities
across the year.
Cause Related
Marketing
Campaigns
Collaborate on joint campaigns
including colleague fundraising.
Corporate GovernanceBusiness & StrategyFinancial Statements In 2023, Matthew
Clark will again
partner with PubAid
and the All-Party
Parliamentary Beer
Group to support the
Community Pub Hero
Awards, recognising
the critical role that
hospitality plays
across the UK in
helping communities.
76
Responsibility Report
(continued)
Colleague Volunteering & Charity
Policy
We know that volunteering creates mutual
benefit for C&C, our local communities,
and our colleagues. Alongside a positive
contribution to the local economy,
volunteering also enhances the health,
wellbeing, and capability of colleagues. To
support this, in April 2023, C&C launched
our Colleague Volunteering & Charity
Policy, which offers colleagues time off
to volunteer, whether it be through Big
Issue Group partnership, or local charities,
community initiatives and causes that are of
personal interest or relevant to our brands
and Business Units.
Other Community Partnerships
C&C Group continues to support a range of
charitable organisation across the UK and
Republic of Ireland. In Dublin, C&C partners
with Inner City Enterprise (‘ICE’), 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
several of our colleagues have joined their
panel of business advisors to support the
entrepreneurs that they work with.
In 2023, Matthew Clark will again partner
with PubAid and the All-Party Parliamentary
Beer Group to support the Community
Pub Hero Awards, recognising the critical
role that hospitality plays across the UK in
helping communities.
Tennent’s has a 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.
Now in its second year, 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.
In addition to supporting emerging Scottish
talent like Paul Black and The Snuts,
the scheme continues to support five
creatives living and working in Scotland:
Danny Aubrey, Katie Doyle, Jubemi Iyiku,
Jonny MacKinnon and Michael Rankin,
spanning industries including music,
sustainable fashion, film, photography and
skateboarding.
C&C Group is a funder and active
member of Drinkaware, which performs
the valuable role of educating consumers
about responsible alcohol consumption.
In addition, we support Best Bar None
in Scotland, a national accreditation and
award scheme for licensed premises.
Participants are given 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 British Beer and
Pub Association, 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 Drinkaware.ie, the
Licensed Vintners Association, the Vintners
Federation of Ireland and Hospitality Ulster.
In FY2023, the Group has responded to the
UK Government’s consultations including
Alcohol Duty Review (UK) and Alcohol
Marketing Restrictions and Minimum Unit
Pricing Review (Scotland).
C&C Group plc Annual Report 2023 77
Case Study:
Tennent’s ‘Pint & A Plan’
As part of the Group’s active
membership of the British Beer
and Pub Association (‘BBPA’), we
have again supported the Brewing
Green programme, which looks to
communicate how Britain’s breweries
and pubs, alongside their supply
chains, play their part in making Britain
a world-leader in sustainability. A case
study on Tennent’s ‘Pint & a Plan’
initiative was included in this year’s
BBPA Brewing Green launch event,
which was presented at Westminster
on 19 April 2023. ‘Pint and a Plan’ was
a series of three events held in 2022.
The events were open to anyone who
would like to learn more about the
climate crisis and understand how they
can make a plan for action in a casual
and friendly environment. Hosted in pubs
around Scotland, the series was created in
partnership with Tennent’s, 2050 Climate
Group and the Scottish Environmental
Protection Agency (‘SEPA’). The events
explored how we can all be empowered
to take action on the climate crisis through
things we use, how we travel and how we
use our money. The events focused on
positive discussion and were accessible to
all those who want to make a difference,
but are not quite sure where to start. The
target audience was those aged 18-35
years old who are not yet actively engaged
with climate conversations. Tennent’s
young customer base, as well as that of the
chosen venues, was a valuable resource in
engaging the target demographic.
The Pint and A Plan events were sold
out and over 100 people were engaged
in a climate discussion whilst enjoying
a beer and meeting new people. 79%
of attendees were in the target age
bracket – 18-35 year old – and 100% of
attendees who completed the feedback
survey said that they were ‘more
motivated to take climate action following
the event’:
“I thought the event was great. I came on
my own so was slightly nervous about
that, but the group discussions and
focused topics were great. I met lots of
interesting people from lots of different
sectors who all share an interest in
climate change and the need for action”
Corporate GovernanceBusiness & StrategyFinancial Statements 78
Responsibility Report
(continued)
Deposit Return Scheme
Minimum Unit Pricing (‘MUP’)
Scotland
From late 2017, C&C were asked to
participate directly in an advisory group
supporting the portfolio of studies to
assess this ground-breaking legislation.
C&C supported Public Health Scotland,
which was tasked with evaluating
the implementation by the Scottish
Government, by regularly contributing to
improving the studies and assessments
of the economic impacts of MUP, via the
Economic Advisory Group (‘EAG’).
C&C offered analytical expertise,
introductions to research agencies, and
expert assistance to testing and interpreting
some of the observed findings. Our
objective was, and remains, to ensure the
best possible evaluation of this pioneering
legislation. C&C’s representative was
thanked by Public Health Scotland for
their input to both the group, and direct
contributions.
In October 2022, the Group participated
in the Scottish Government consultation
seeking industry views on the level of MUP
from May 2024.
C&C Group will participate fully with all
stakeholders on the Scottish Government
review of MUP commencing in summer
2023.
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 (‘CSL’), the
system administrator appointed to operate
the DRS in Scotland. The Group continues
to collaborate with customers and suppliers
and engages fully in all DRS working groups
established by the Scottish Government,
our Trade Bodies and CSL.
Given the outstanding critical issues
around the implementation of the
scheme in Scotland, C&C welcomes the
announcement by the Scottish Government
to delay introduction of DRS until March
2024. To meet the new timetable,
although achievable, it still requires
resolution of these issues and greater
senior engagement between the Scottish
Government, CSL and industry.
Republic of Ireland (ROI)
C&C is working with Re-turn, the scheme
administrator in ROI, customers, and
suppliers on the implementation of DRS in
February 2024.
C&C have established a Group Steering
Committee and functional project teams to
ensure that we prepared for the introduction
of DRS in Scotland and the Republic of
Ireland.
Republic of Ireland (ROI)
MUP was introduced in ROI on 4 Jan
2022. The Group continues to review the
impact of MUP and work with retailers and
convenience sectors on implications on
pack strategy.
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
the Group is headquartered in Dublin. The
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, as well as VAT and employment
taxes.
C&C Group plc Annual Report 2023 79
Corporate GovernanceBusiness & StrategyFinancial Statements 80
Directors’ Report
The Directors present the Annual Report and audited Consolidated Financial Statements of the Group for the year ended 28 February
2023.
Principal Activities
The Group’s principal trading activity is the manufacturing, marketing and distribution of branded beer, cider, wine, spirits and soft drinks.
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
Sustainability and Climate Change is one of our
principal risks. Please refer to page 33 for more
details.
For employee matters, retention and recruitment
of staff is one of our principal risks. Please refer
to page 34, the ESG Committee Report on pages
105 to 107 and the Nomination Committee report
on pages 108 to 114 for more details.
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.
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.
Environmental
matters
Social and
Employee matters
Environmental Sustainability
Responsibility Report
Diversity and Inclusion
Health and Safety
Speak Up
Conflicts of Interest
Responsibility Report
Human Rights
Anti-Modern Slavery
Responsibility Report
Anti-bribery and
Corruption
Code of Conduct
Compliance
Anti-Bribery
Description of the
business model
Non-Financial
key performance
indicators
Dividends
Responsibility Report
Please refer to pages
22 to 24
Please refer to page
29
Subject to approval at the 2023 Annual General Meeting, it is proposed to pay a final ordinary dividend of 3.79 cent per share for the year
ended 28 February 2023 to shareholders who are registered at close of business on 9 June 2023. For the previous financial year ended 28
February 2022, no interim or final dividend was paid.
C&C Group plc Annual Report 2023
81
Board of Directors
The names, functions and date of appointment of the current Directors are as follows:
Director
Ralph Findlay
Function
Executive Chair
Independent Non-Executive Chair
Independent Non-Executive Director
Patrick McMahon
Group Chief Executive Officer and Group Chief Financial Officer
Vineet Bhalla
Jill Caseberry
Vincent Crowley
John Gibney
Helen Pitcher
Jim Thompson
Group Chief Financial Officer
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Appointment
2023
2022
2022
2023
2020
2021
2019
2016
2022
2019
2019
Research and Development
Share Price
3. The key performance indicators relevant
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.
The price of the Company’s ordinary shares
as quoted on the London Stock Exchange
at the close of business on 28 February
2023 was £1.49 (28 February 2022: £2.11).
The price of the Company’s ordinary shares
ranged between £1.44 and £2.16 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 Group
CEO’s Review on pages 10 to 19 and
the Strategic Report on pages 2 to 79.
2. The principal risks and uncertainties
which the Company and the Group
face are set out in the Strategic Report
on pages 30 to 39.
to the business of the Group, including
environmental and employee matters,
are set out in the Strategic Report on
pages 28 to 29 and in the Group CFO’s
Review on pages 50 to 55; and further
information in respect of environmental
and employee matters is set out in the
Responsibility Report on pages 56 to
79.
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
CFO’s Review on pages 50 to 55 and
note 24 to the financial statements.
The Group’s Viability Statement is contained
in the Strategic Report on pages 38 to 39.
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 88 to 99.
Corporate GovernanceBusiness & StrategyFinancial Statements 82
Directors’ Report
(continued)
Substantial Interests
As at 28 February 2023 and 19 May 2023, 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:
Artemis Investment Management LLP
FIL Limited
Aberforth Partners LLP
Brandes Investment Partners, L.P.
Silchester International Investors LLP
BlackRock, Inc.
Setanta Asset Management Limited
Magallanes Value Investors SA SGIIC
No. of ordinary
shares held as
notified at
28 February 2023
% at
28 February 2023
No. of ordinary
shares held as
notified at
19 May 2023
% at
19 May 2023
59,082,210
38,307,252
19,739,135
19,674,675
12,341,061
16,310,918
9,803,738
12,271,597
15.04% 58,939,447
14.99%
9.75%
38,182,496
5.02%
5.01%
3.96%
4.15%
3.16%
3.12%
19,739,135
19,674,675
12,341,061
16,310,918
9,803,738
12,271,597
9.72%
5.02%
5.01%
3.96%
4.15%
3.16%
3.12%
As far as the Company is aware, other than as stated in the table above, no other person or company had, at 28 February 2023 or 19 May
2023, 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 7
July 2022, 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 2023 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 2024 and
the date 18 months after the passing of the
resolution, whichever is earlier.
At the Annual General Meeting held on
7 July 2022 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
2023 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 2024 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 19 May 2023, being the latest
practicable date, options to subscribe for a
total of 3,762,219 ordinary shares (excluding
Recruitment and Retention Awards)
are outstanding, representing 0.96% of
the Company’s total voting rights. If the
authority to purchase ordinary shares were
used in full, the options would represent
1.07% 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.
The European Communities
(Takeover Bids (Directive 2004/25/
EC)) Regulations 2006
Structure of the Company’s share capital
At 19 May 2023, being the latest practicable
date, the Company has an issued share
capital of 402,007,212 ordinary shares of
C&C Group plc Annual Report 2023
83
€0.01 each and an authorised share capital
of 800,000,000 ordinary shares of €0.01
each.
At 28 February 2023, the trustee of the C&C
Employee Trust held 1,133,822 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 2023, 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
2.24% of issued share capital as at 28
February 2023. Further details can be found
in Note 25 (Share Capital and Reserves) on
page 222.
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 115 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 82.
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
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 84
Directors’ Report
(continued)
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
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
Remuneration Policy (‘policy’) was last put
to our shareholders on an advisory basis at
the 2021 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.
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.
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.
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.
C&C Group plc Annual Report 2023 85
Post Balance Sheet Events
In May 2023, post-FY2023 year-end and
upon publication of the Group’s FY2023
results, the Group has completed a
refinancing of the current multi-currency
facility. The facility is a new five-year
committed, sustainability-linked, facility
comprised of a €250m multi-currency
revolving loan facility and a €100m non-
amortising Euro term loan, both with a
maturity of FY2028. The facility offers
optionality of two one-year extensions to the
maturity date callable within 12 months and
24 months of initial drawdown respectively.
Both the multi-currency facility and the Euro
term loan were negotiated with six banks -
namely ABN Amro Bank, Allied Irish Bank,
Bank of Ireland, Barclays Bank, HSBC and
Rabobank.
in FY2024, however net debt / adjusted
EBITDA is expected to remain within our
stated range of 1.5x to 2.0x. Excluding the
impact on MCB, the Group is currently
performing in line with expectations for
FY2024 and the Board is confident in the
Group’s medium and long-term strategy
and prospects.
On 18 May 2023, David Forde stepped
down as the Group’s Chief Executive Officer
(‘CEO’) and Director with immediate effect,
and consequently Patrick McMahon, Chief
Financial Officer (‘CFO’), was appointed
CEO with immediate effect. Ralph Findlay,
Chair, was appointed Executive Chair
to support the management transition
as Patrick McMahon will also retain his
responsibilities as CFO until a new CFO is
appointed.
The Directors’ Report for the year ended 28
February 2023 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
Patrick McMahon Ralph Findlay
Group Chief
Executive Chair
Executive
Officer and Group
Financial Officer
24 May 2023
The Group implemented a complex
Enterprise Resource Planning ('ERP’)
transformation in February 2023 in the
Matthew Clark and Bibendum (‘MCB’)
business, further aligning and streamlining
our technology infrastructure across
the Group. This is a key step in our
digital transformation and optimisation
of the business which will enable further
automation and simplification of our
business processes.
The implementation of the ERP has taken
longer and has been significantly more
challenging and disruptive than originally
envisaged, with a consequent material
impact on service and profitability within
MCB. Service levels had largely returned
to normal levels by the end of March 2023,
however continuing system implementation
challenges, impacted by greater seasonal
trading volume, saw a deterioration in
service levels in April 2023. An improvement
through May 2023 is being achieved by
investing in material additional cost and
resources, ahead of a system fix being
implemented to restore service to normal
levels permanently.
We currently expect a one-off impact of
c.€25 million associated with the ERP
system disruption in FY2024, reflecting the
cost associated with restoring service levels
and lost revenue. There is expected to be
a consequential increase in working capital
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.
Other Information
Other information relevant to the Directors’
Report may be found in the following
sections of the Annual Report:
Information
Results
Principal risks & uncertainties including
risks associated with recent emergence of
COVID-19
Directors’ remuneration, including the
interests of the directors and secretary in the
share capital of the Company
Location in the Annual Report
Financial Statements – pages 147 to 153.
Principal Risks and Uncertainties – pages
30 to 39.
Directors’ Remuneration Committee Report
– pages 115 to 135.
Long-Term Incentive Plan, share options and
equity settled incentive schemes
Directors’ Remuneration Committee Report
– pages 115 to 135.
Significant subsidiary undertakings
Financial Statements – Note 29.
Director biographies and Board composition
Directors and Officers – pages 86 to 87.
Audit Committee Report
Pages 100 to 104.
Corporate GovernanceBusiness & StrategyFinancial Statements
86
Directors and Officers
1. Ralph Findlay OBE
3. Vineet Bhalla
5. Vincent Crowley
Executive Chair
Ralph Findlay (62) was appointed a Non-
Executive Director of the Company in March
2022, Chair on 7 July 2022 and Executive
Chair on 18 May 2023. Ralph, a Chartered
Accountant and qualified member of the
Association of Corporate Treasurers, served
as Chief Executive Officer of Marston’s, the UK
pub group, for 20 years. 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 Non-Executive Chair of
Vistry Group plc in May 2022, having served
as a Non-Executive Director since 2015 and
Senior Independent Director from January
2020. He also previously served as Chair of
the British Beer and Pub Association (‘BBPA’).
Ralph was awarded an OBE for services to the
hospitality sector in 2022.
Independent Non-Executive Director
Vineet Bhalla (50) 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.
Independent Non-Executive Director
Vincent Crowley (68) 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. Most
recently, Vincent was appointed Chair of Davy
Stockbrokers in December 2022. Vincent
brings considerable domestic and international
business experience across a number of sectors
to the Board.
2. Patrick McMahon
4. Jill Caseberry
6. John Gibney
Group Chief Executive Officer and
Group Chief Financial Officer
Patrick McMahon (43) was appointed Group
Chief Financial Officer in July 2020 and Group
Chief Executive Officer in May 2023. 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 17 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 Group
Strategy Director prior to his appointment as
Group CFO and subsequently Group CEO.
Patrick is a Fellow of Chartered Accountants
Ireland, having trained at KPMG, and a
member of the ESG Committee.
Independent Non-Executive Director
Jill Caseberry (58) 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 Senior Independent Director,
Chair of the Remuneration Committee and
a member of the Nomination Committee 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.
Independent Non-Executive Director
John Gibney (63) was appointed as a Non-
Executive Director of the Company in October
2022 and as Chair of the Audit Committee in
February 2023. John served for 17 years as
Chief Financial Officer and board member
of Britvic plc, the international soft drinks
business, where he was responsible for
finance, legal, estates, risk management,
quality, safety and environment, and
procurement. Prior to joining Britvic plc,
John was Senior Corporate Finance and
Planning Manager for Bass plc and, before
that, Finance Director and subsequently,
Deputy Managing Director of Gala Clubs.
John was appointed a Non-Executive Director
of 4imprint Group plc in 2021 and serves as
Chair of their Audit Committee. He previously
served as a Non-Executive Director and Chair
of the Audit Committee at PureCircle PLC and
Dairy Crest plc (now Saputo Dairy UK).
C&C Group plc Annual Report 2023 87
For information on independence of
the Directors, please see Directors’
Statement of Corporate Governance on
pages 88 to 89.
Board Committees
Audit Committee
John Gibney (Chair)
Vincent Crowley
Jim Thompson
Vineet Bhalla
Nomination Committee
Ralph Findlay (Chair)
Vincent Crowley
Helen Pitcher
Remuneration Committee
Helen Pitcher (Chair)
Jill Caseberry
Vineet Bhalla
ESG Committee
Jim Thompson (Chair)
Jill Caseberry
Helen Pitcher
Patrick McMahon
Vineet Bhalla
Senior Independent Director
Vincent Crowley
7. Helen Pitcher OBE
8. Jim Thompson
Independent Non-Executive Director
Helen Pitcher (65) 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. Most recently, Helen
was appointed as Chairman of Judicial
Appointments Commission. Helen is also
currently Chair of a leading board effectiveness
consultancy, Advanced Boardroom Excellence
Ltd, Chair of the Criminal Cases Review
Commission, Chair of the Public Chairs’
Forum, 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
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, Chairman of the
pladis Advisory Board and a Board member
and Remuneration Chair for the CIPD. 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.
Independent Non-Executive Director
Jim Thompson (62) 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.
9. Mark Chilton
Company Secretary & Group General
Counsel
Mark Chilton (60) 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 88
Corporate Governance Report
Board succession and diversity
Board Succession and Effectiveness
This year has been marked by some
important changes to the composition of
the Board, and while we are sad to see
some of our longest-tenured members step
down, we are certain that the breadth of
skills and contributions from the recently
appointed Directors will significantly
contribute to the Board’s decision-making
process. John Gibney was appointed as
an independent Non-Executive Director
and took on the role of Chair of the Audit
Committee, following Emer Finnan’s
decision to step down from the Board on
8 February 2023. We also announced that
Helen Pitcher will not be seeking re-election,
following her appointment as Chair of the
Judicial Appointments Commission, and
Jim Thompson will also be stepping down
from his role in light of the difficulties in
travel from the USA. The Board would
like to thank Emer, Helen and Jim for their
significant contributions and service to the
Group during their respective tenures on the
Board. The process to recruit two additional
independent Non-Executive Directors is
ongoing. C&C will also appoint a new Chair
of the Remuneration Committee to succeed
Helen Pitcher. The Board is mindful of the
impact of these changes on the gender
balance of our Board. I am committed to
ensuring that the Board composition reflects
a diverse mix of skills, experience, personal
attributes as well as broader aspects of
diversity. I look forward to announcing
progress on the Non-Executive Director
search in the near future.
At the 2022 AGM, Stewart Gilliland stepped
down from his role as Chair of the Board,
after having supported the C&C Board over
the last ten years. This change has also
given me the opportunity to contribute to
the Board in the capacity of Non-Executive
Chair, and I appreciate and look forward
to the opportunity to support C&C in its
ambitious growth strategy, and to continue
building relationships with our stakeholders.
As detailed on page 85, on 18 May 2023,
David Forde stepped down as the Group’s
Chief Executive Officer (‘CEO’) and Director
with immediate effect, and consequently
Patrick McMahon, Chief Financial Officer
(‘CFO’), was appointed CEO with immediate
effect. I have been appointed Executive
Chair to support the management transition
as Patrick McMahon will also retain his
responsibilities as CFO until a new CFO is
appointed.
Our People, Diversity and Culture
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 society, the better equipped we are
to meet the needs of our customers and
consumers.
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, Inclusion and
Wellbeing (‘DI&W’) 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 Group
forward, and link to the Group’s strategy.
Further details about our overall approach to
diversity and inclusion can be found in the
Nomination Committee Report on pages
111 to 112.
Gender Pay Gap
We published our gender pay gap report
for the Group in December 2022. Whilst our
mean and median Gender Pay Gaps are
lower than the national averages across the
UK and Republic of Ireland, we recognise
that there’s still progression to be made
to increase the representation of women
across our Group.
In the medium-term, we will be focusing on
two priorities to continue to drive progress
in this important area: 1) Attracting female
Dear Shareholder
On behalf of the Board, I am
pleased to present the FY2023
Corporate Governance Report.
This report sets out our
approach to effective corporate
governance and outlines the
key areas of focus of the Board
and its activities undertaken
during the year.
During my first year as Chair, I have met
with many C&C colleagues, as well as
other key stakeholders, in order to gain a
deeper understanding of C&C’s culture
and business. In my visits to our operations
in Ireland and the UK, I gained first hand
insight from our local management teams
and colleagues about the opportunities and
challenges they face. These activities have
enabled me over the last twelve months to
build a good understanding of C&C, our
customers, consumers and suppliers.
I am very grateful to all the colleagues and
stakeholders who have taken time to speak
with me during the year and to share their
insights and experiences. This knowledge,
and the ongoing engagement with our key
stakeholders, is essential to ensure that I
can lead the Board effectively and create
the right conditions to enable us to deliver
on our strategy.
C&C Group plc Annual Report 2023 89
talent into our organisation into roles and
business areas that have previously been
less gender balanced; 2) Retaining female
talent in our organisation by identifying
personal growth and development
opportunities, and embedding clear
succession planning. Throughout FY2023
Diversity, Equity and Inclusion (‘DE&I’) has
remained a key focus and we’re pleased
with our progress, with highlights including:
– Establishing our DE&I Advisory Group,
represented by colleagues across business
areas and locations, with a clear focus on
understanding our colleague population to
drive our DE&I Strategy;
– Enrolling four DE&I Executive Committee
Sponsors, who support vibrant, committed
Employee Resource Groups across mental
health and wellbeing, physical health,
working parents and menopause.
Sustainability
Important progress has been made in
incorporating the Task Force on Climate-
related Financial Disclosures (‘TCFD’)
framework into our reporting and risk
management processes. During the year,
the Board and the ESG Committee received
training from an external provider on the
quantitative scenario analysis required
by TCFD which will extend into FY2024
and builds upon the work completed in
FY2022. By strengthening our governance,
we continue to accelerate efforts to
mitigate climate change risks and identify
opportunities for transitioning to be a carbon
neutral business by 2050. Full details on the
work undertaken on TCFD during FY2023
can be found on pages 40 to 49.
Protecting our environment remains an
integral part of the Group’s strategy. For
this reason, the Board decided that ESG
considerations should also be part of the
Executive remuneration policy at C&C. With
consideration to the strategic ESG targets
set out for the Group during FY2023, and
with guidance from the ESG Committee,
an environmental target has been included
in the performance conditions of the 2022
Long Term Incentive Plan (‘LTIP’). More
details can be found in the Remuneration
Committee Report on page 118.
A materiality assessment exercise, in line
with the Global Reporting Initiative, was
started during the year to ensure that the
Group’s ESG priorities remain aligned
with the views of our key stakeholders.
The exercise will strengthen the Group’s
response to ESG regulations, such as
the Corporate Sustainability Reporting
Directive, our reporting efforts in line with
TCFD, while ensuring that the ESG matters
of most importance to stakeholders are
captured accurately and are part of the ESG
Committee’s deliberations.
To promote the alignment of the ESG
strategy with financing decisions, the
ESG Committee reviewed and supported
a proposal to link ESG KPIs on carbon
emissions, water efficiency and health and
safety, in a debtor securitisation exercise
and a re-financing exercise during the year.
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 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 91.
Board Evaluation
It is very important that the performance of
the Board, its Committees and individual
Directors is rigorously reviewed. This year,
an externally facilitated effectiveness review
was conducted by Independent Audit
Limited (‘IAL’) (in accordance with the UK
Corporate Governance Code 2018 (‘the
Code’) and supported by the Company
Secretary and Group General Counsel.
The expertise and independence of IAL
provides me and my colleagues with a more
complete assessment of our strengths and
areas of improvement of the Board. The
results were insightful and I am pleased to
report that key areas of Board strength were
held to be its strong composition, shared
passion, and the open and collaborative
culture within the Board. Leveraging on our
strengths, we want to ensure that we work
as effectively as possible. There are five
areas of improvement that will form part of
our action plan for FY2024.
Priority areas for FY2024 are as follows:
Board oversight of and input into strategy,
succession planning, risk and control
oversight, meeting dynamics, and
understanding of culture.
Our progress against last year’s areas of
focus, as well as the outcome of this year’s
effectiveness review can be found on pages
96 to 97.
Looking forward
As a Board, we will continue to maintain the
highest standards of corporate governance
across the Group and continue to promote
and enhance the inclusive culture we are
building at C&C. We will also focus on
the delivery of our strategy through such
things as the implementation of the Group’s
complex Enterprise Resource Planning
(‘ERP’) system in our Matthew Clark and
Bibendum business, which now aligns them
to the same system being used elsewhere
across the Group. This is a key step in our
digital transformation and optimisation of
the business. More details regarding the
implementation of the ERP system and the
challenges experienced can be found on
page 85.
I encourage all stakeholders to take every
opportunity presented to engage with
the Company and I would welcome you
to attend, and in any case vote at, the
forthcoming Annual General Meeting on 13
July 2023.
Corporate GovernanceBusiness & StrategyFinancial Statements
90
Corporate Governance Report
(continued)
I am delighted to be part of the C&C team.
I would like to thank my Board colleagues
and the Executive Committee for their
support during my first year as Chair, and
now Executive Chair, as well as for their
continued leadership as we build a business
which delivers on the interests of all our
stakeholders and the communities and
wider society in which we operate.
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 FY2023 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.
Ralph Findlay
Executive Chair
Compliance with the UK
Corporate Governance Code
The Board considers that the Company
has, throughout FY2023 complied with the
provisions of the Code with the exception
of provision 19 of the Code, regarding Chair
tenure. 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 the AGM
Stewart Gilliland had 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.
Leadership and Company Purpose
Role of the Board
The Group is led and controlled by the
Board of Directors (‘the Board’) and chaired
by Ralph Findlay.
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 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 whereby
Directors (including Non-Executive
Directors) receive a 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 sites.
Our Purpose and Strategy
C&C is a premium drinks company
which owns, manufactures, markets and
distributes a unique portfolio of beer and
cider brands in its home markets and
across the globe. The Board considers
C&C’s purpose 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.
Information on our strategy is set out on
pages 20 to 21.
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 a good culture and the role it plays in
delivering the long-term success of the
Company. C&C colleagues want to work
for a company that values them and allows
them to be themselves and to thrive. The
Board and Executive Committee strive to
create a positive culture at C&C, providing
colleagues with the opportunity to grow,
and develop in an inclusive environment.
To create the right culture, it is important
that colleagues live and breathe C&C’s
values, and this starts with our leaders.
The Board sets the tone from the top to
demonstrate and promote these values,
which are a critical element in achieving
our purpose of knocking down barriers
so everyone can thrive. The Board uses a
variety of mechanisms, cultural indicators
and reporting lines to monitor the culture,
listen to colleagues and act on what they
say. The table below highlights some of
those indicators.
C&C Group plc Annual Report 2023 91
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
• Number of colleague
interactions with
Mental Health First
Aiders
• Employee “town hall”
meetings/face-to-face
meetings
• Results of “Peakon”
employee engagement
surveys
• Employee turnover rates
• Gender pay gap
• Internal audit reports
and findings
• Fraud and
misconduct statistics
• Annual confirmation of
compliance with our
anti-financial crime
policies
• Compliance with
supply chain
standards
• Customer retention
rates
• Supplier audits
• Brand satisfaction
ratings
• Tracking of ESG
targets in line with
the Company’s ESG
strategy
• Collaboration with
Governments,
NGOs and Industry
Programmes
disclosures
• Whistle blower
• On time in full rates
• Engagement with
• Reports on progress
statistics
on equity, diversity and
inclusion
stakeholder groups
such as suppliers and
the community
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.
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 as well as other
Non-Executive Directors, particularly as
part of their committee responsibilities,
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 across a range of topics that are
material to C&C. 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 and Group General
Counsel 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 92
Corporate Governance Report
(continued)
Key decision
Hybrid AGM
Stakeholders
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 2022, the AGM was held in a hybrid format and shareholders were
invited to join the AGM in person or online, to listen, vote and ask questions. Shareholders were also provided with
an opportunity to submit their questions about the business or any matter pertaining to the AGM, in advance of the
meeting.
• Shareholders
• Government
and regulators
• Employees
All Directors joined the AGM physically, together with the external auditor. All resolutions at the 2022 AGM were
voted on a poll. Shareholders who were unable to attend the meeting, were asked to register their vote in advance
of the AGM by appointing the Chair of the AGM as proxy and providing their voting instructions. All resolutions
were passed with over 94% cast in favour.
Disposal of the Group’s stake in Admiral Taverns tenanted pub group
In May 2022, the Board approved the sale of its entire minority interest in Admiral Taverns to Proprium Capital
Partners, with whom it originally invested into Admiral Taverns in September 2017, for total gross aggregate cash
consideration of £55.0m. 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. We estimated that the disposal represented an
FY2023 EBITDA multiple of 10.9x. The aggregate proceeds receivable were to be used to reduce net debt and
contribute to the delivery of our stated medium-term target Net debt/EBITDA multiple of less than 2.0x. As part of
the divestment, C&C negotiated a long-term supply agreement into the Admiral estate, which included our owned
and agency brands. 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.
• Customers
• Suppliers
• Shareholders
• Lenders
Re-financing
The Board approved the decision to re-finance the Group’s €450m multi-currency revolving credit facility expiring
in July 2024, having regard to the current volatile environment and upward pressure on bond yields. The target of
the exercise was to provide ample, but not inefficient liquidity and headroom for the Group, allowing it to execute
against its stated strategy. In addition, to ensure a diversified capital structure, whilst optimising the Group’s cost of
debt and linking any new facility to our sustainability ambitions.
• Employees
• Customers
• Suppliers
• Shareholders
In formulating its decision, the directors considered the views of the investor community regarding, 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 re-financing, 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 macro-economic developments. 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.
In May 2023, post-FY2023 year-end and upon publication of the Group’s FY2023 results the Group has completed
a refinancing of the current multi-currency facility. The facility is a new five-year committed, sustainability-linked,
facility comprised of a €250m multi-currency revolving loan facility and a €100m non amortizing Euro term loan,
both with a maturity of FY2028. The facility offers optionality of two one-year extensions to the maturity date
callable within 12 months and 24 months of initial drawdown respectively. Both the multi-currency facility and
the Euro term loan were negotiated with six banks - namely ABN Amro Bank, Allied Irish Bank, Bank of Ireland,
Barclays Bank, HSBC and Rabobank.
C&C Group plc Annual Report 2023 93
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, Ralph Findlay 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 and Group
General Counsel 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.
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. 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.
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 104, the ESG Committee Report is on
pages 105 to 107, the Nomination Committee Report is on pages 108 to 114 and the
Directors’ Remuneration Committee Report is on pages 115 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
Co Sec/Legal and Group Communications
Finance
GB
HR
Ireland
IT
Operations
Non-Executive Director
Jim Thompson
John Gibney
Jill Caseberry
Helen Pitcher
Vincent Crowley
Vineet Bhalla
Helen Pitcher
Corporate GovernanceBusiness & StrategyFinancial Statements 94
Corporate Governance Report
(continued)
‘Our Forum’ sessions were held during
the year. Hosted by Executive Committee
members and Non-Executive Directors
(‘NEDs’). These sessions provide a short
business update, with the key focus being
to answer any questions / concerns that
colleagues have about C&C. ‘Our Forum’
meetings 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
feed back to the C&C Board.
Board Meetings in FY2023
The Directors’ attendance at Board
meetings during the year is shown in the
table. 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 7 Board meetings,
7 Audit Committee meetings, 5 ESG
Committee meetings, 5 Nomination
Committee meetings and 11 Remuneration
Committee meetings held in the year under
review.
Board and Committee members are
expected to attend each scheduled
meeting, and, wherever possible, any
ad hoc meetings. If a director is unable
to attend a meeting due to exceptional
circumstances, or pre-existing
commitments, they are encouraged to
provide comments and observations on
the relevant Board and Committee papers,
to the Chair of the Board or Committee
so that they may be shared with Directors
at the meeting. The Board aims to hold at
least two meetings in different operating
locations each year. When visiting operating
locations, Directors can meet with a
diverse group of senior business leaders
and colleagues, which allows them to gain
further insight into how the business works
and the opportunity to listen to colleagues'
views and ask questions.
Directors may attend any Board Committee meeting they wish, irrespective of whether they
are a Committee member. This is subject only to recusal regarding matters concerning the
individual(s) or any conflicts of interests.
All Directors holding office at the time attended the 2022 AGM.
Director
Executive
David Forde
Patrick McMahon
Non-Executive
Stewart Gilliland 1
Vineet Bhalla
Jill Caseberry
John Gibney 2
Vincent Crowley
Emer Finnan
Helen Pitcher
Jim Thompson
Number of Meetings
Attended*
Maximum Possible
Meetings
% of Meetings
Attended
7
7
3
7
7
2
7
7
7
7
7
7
3
7
7
2
7
7
7
7
100
100
100
100
100
100
100
100
100
100
1. Meetings attended by Stewart Gilliland until the date of his retirement from the Board.
2. Meetings attended by John Gibney from the date of his appointment.
3. Meetings attended by Emer Finnan until the date of her stepping down from the Board.
Board activity during FY2023
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 FY2023 is set out below.
Strategy, Operations and Finance
• Approved the Group’s Viability Statement;
• Received presentations from
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 our
shareholding in the Admiral Taverns
tenanted pub group;
• Reviewed and approved the Group’s full
year FY2022 and half year FY2023 results
as well as trading updates;
• Approved the Group’s 2022 Annual
Report (including a fair, balanced and
understandable assessment) and 2022
AGM Notice;
• Received and reviewed updates from
senior management on the Group’s
sustainability strategy including ESG
frameworks, climate change risks and
TCFD reporting;
• Received and discussed presentations
from the GB Head of Logistics and the
Manufacturing Director;
• Reviewed and approved the terms of the
external re-financing arrangements;
• Received Investor relations updates; and
• Received updates from the Technology
and Transformation Director on the
implementation of the Company’s
ERP system in our Matthew Clark and
Bibendum business, a set of projects
whose purpose was 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. More details regarding the
projects can be found on page 85.
C&C Group plc Annual Report 2023 95
People and Culture
• Review of succession planning;
• Continued focus on the composition,
balance and effectiveness of the Board,
including the appointment of a Chair of
the Audit Committee;
• Reviewed and discussed six monthly
“Peakon” 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
• Received and discussed a presentation
on the Group Remuneration policy and
reward strategy.
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 and emerging risks;
• 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
from the Technology and Transformation
Director.
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 2022
internal Board evaluation action plan;
• Conducted an external Board evaluation
covering the Board’s effectiveness, with
the outcome discussed by the Board;
• Approved an updated Whistleblowing
Policy and new Volunteering and
Community Investment policies;
• Received and reviewed whistleblowing
reports and activities;
• Received and discussed six monthly
reports and updates presented by the
Group Data Protection Officer; 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 20 to 21 and a summary of
performance against the Group’s KPIs is
at pages 28 to 29. 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
30 to 39, to manage the key risks to the
Group’s business.
Business Model and Risks
The Group’s Business model is set out on
pages 22 to 25. The Risk Management
Report on pages 30 to 39 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
As at 28 February 2023, the Board
consisted of a Non-Executive Chair, two
Executive Directors and seven independent
Non-Executive Directors including the
Non-Executive Chair. As at 24 May 2023,
the Board consists of the Executive Chair,
one Executive Director and six independent
Non-Executive Directors.
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 86 to 87.
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 108 to 114.
Time Commitment and external
appointments
Following the Board evaluation process,
detailed further on pages 96 to 97, 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 96
Corporate Governance Report
(continued)
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:
• Vincent Crowley’s appointment as Chair
of the Company’s Irish corporate brokers,
Davy;
• Jill Caseberry’s appointment as Senior
Independent Director and Chair of the
Remuneration Committee of Bakkavor
plc; and
• Helen Pitcher’s involvement as Senior
Independent Director of One Health
Group Limited, which listed on Aquis.
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.
Board Evaluation
FY2023 Board and Committee external
evaluation
Each year, the Board undertakes a rigorous
review of its own effectiveness and
performance, and that of its Committees
and individual Directors. At least every three
years, the evaluation is externally facilitated.
In FY2023, an external effectiveness review
was undertaken.
Independent Audit Limited (‘IAL’), an
external independent evaluator, was
engaged to carry out this activity, which
took place between January and May
2023. IAL conducted the previous external
evaluation in 2020. The Board felt that
retaining IAL would allow progress to be
tracked on areas of focus identified in the
previous effectiveness review. This would
also enable C&C’s new Chair, Ralph Findlay,
to get the benefit of assessing Board
performance and progress against the
previous external evaluation. In addition,
the Board was of the view that IAL’s re-
appointment was appropriate, taking into
account their knowledge of the Company
and the evolution of the Board, since the
2020 evaluation, including the change in
Board Chair. IAL has no other connection
with the Company or any of the Directors.
The evaluation was conducted according to
the guidance provided in the Code. It was a
comprehensive review of all aspects of the
board's effectiveness.
The Board considered the results of the
evaluation and has separately assessed
the independence and time commitment
of each Director. It concluded that each
Director’s performance continues to
be effective and that they demonstrate
commitment to their roles. These findings
are fully considered when making
recommendations in respect of their
election or re-election to the Board.
C&C Group plc Annual Report 2023 97
Board Evaluation Process
In January, February and March 2023, IAL observed the Board and Committee meetings and carried out a review of Board and Committee
papers. In March 2023 Board members, the Company Secretary, the external auditor, the remuneration advisor, and management
participants in Board and Committee meetings completed an online questionnaire via IAL’s ‘Thinking Board’ platform.
The findings of the evaluation were discussed with the Chair and the Company Secretary and finalised into a report. IAL presented the
findings of the effectiveness review at the May Board meeting, discussed the outcomes and answered directors’ questions. A report on
the Chair’s performance was presented to the Senior Independent Director and the results discussed at a meeting of the Non-Executive
Directors without the Chair present. The Chair received feedback on individual Directors’ performance, which was followed by one-to-one
meetings between the Chair and each individual Director to discuss the findings. Feedback on each Committee was presented to each
Committee Chair and was discussed at the relevant Committee meeting.
The Board considered the findings of the effectiveness review and agreed on the priority areas noting that the action plans would be built
into the Board’s objectives, meeting agendas and engagement activities for FY2024, and progress against these will be monitored and
reported in the FY2024 Annual Report.
Key areas of focus identified in FY2022
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.
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.
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.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 98
Corporate Governance Report
(continued)
FY2023 External Board effectiveness evaluation observations
Based on the review the Board concluded that it has a number of important strengths including good cohesion as a Board, an appropriate
balance of experience, skills and knowledge, and Board meetings operating in a spirit of openness and collaboration, fostered by the Chair.
The Board, and the now Executive Chair in particular, are committed in retaining this dynamic and cohesive environment, particularly in
light of the recent and upcoming changes to the Board.
FY2024 key areas of focus
Area of Focus
Detailed Feedback
Strategy
The evaluation found enthusiasm for having greater Board input into the strategy development
process, as well as more focus on monitoring of strategic progress. Directors are keen to spend
more time on assessing the resilience of the business model, the role of technology in driving the
strategy, and the strategic risks and opportunities that may come from big market shifts.
Succession Planning
Risk and Control
Participants in the evaluation communicated a need to continue to make progress on management
succession and development planning, including by giving the Board greater exposure to potential
successors, and having regular sessions on talent management at the Board and Nomination
Committee.
Feedback indicated that Board oversight of risk could be enhanced, particularly in relation to major
projects, crisis preparation and ESG risks. Directors are pleased to see progress on cyber and
health and safety risk, and would like to see further progress on legacy control issues in the finance
area.
Dynamics and Meetings
The evaluation suggested the Board could be enabled to provide more value in meetings through a
variety of mechanisms including increasing time allocated for discussion, more timely information,
and changes to the structure of agendas.
People and Culture
There is a desire to increase the focus on people, particularly regarding the skills that will be
needed to underpin the strategy, and in terms of fair reward for management. Additionally, feedback
suggests board oversight of culture has improved but the area needs further development.
Internal Control
Details on the Group’s internal control
systems are set out on page 102.
Internal Audit
Details of the Internal Audit function are
provided within the Audit Committee report
on page 103.
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 104.
Audit, Risk and Internal Control
Financial and Business Reporting
The Strategic Report on pages 2 to 79
explains the Group’s business model and
the strategy for delivering the objectives
of the Group.
A Statement on Directors’ Responsibilities
on the Annual Report can be found on page
136, a Statement on the Accounts being
fair, balanced and understandable can be
found on page 102 and a statement on the
Group as a going concern and the Viability
Statement are set out on pages 38 to 39.
Risk Management
Please refer to pages 30 to 39 for
information on the risk management
process and the Group’s principal risks and
uncertainties.
C&C Group plc Annual Report 2023
99
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 115 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 79 and throughout this Corporate Governance Report on pages 88 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 74.
Division of Responsibilities
Pages 86 to 87 gives details of the Board and Management Team. The Board governance structure is
detailed on pages 88 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 114. Details on evaluation are set out on pages 96 to 97.
Audit, Risk and Internal
Control
The Audit Committee Report can be found on pages 100 to 104, with further detail on the principal
risks to the business in the Risk Report on pages 30 to 39.
Remuneration
The Company’s Remuneration Policy can be found in the FY2021 Annual Report. The Directors’
Remuneration Committee Report can be found on pages 115 to 135.
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 24 May 2023.
Mark Chilton
Company Secretary
Constructive Use of the Annual General
Meeting
The AGM provides a valuable opportunity
for the Board to engage with shareholders
and listen to their feedback. In 2022, the
AGM was held in a hybrid format and
shareholders were invited to join the AGM
in person or online, to listen, vote and
ask questions. Shareholders were also
provided with an opportunity to submit
their questions about the business or any
matter pertaining to the AGM, in advance
of the meeting. All Directors joined the AGM
physically, together with the external auditor.
All resolutions at the 2022 AGM were voted
on a poll. Shareholders who were unable
to attend the meeting, were asked to
register their vote in advance of the AGM by
appointing the Chair of the AGM as proxy
and providing their voting instructions. All
resolutions were passed with over 94% cast
in favour.
Corporate GovernanceBusiness & StrategyFinancial Statements 100
Audit Committee Report
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 discharging its responsibilities in the year,
the Committee reviewed and challenged
management on the significant accounting
judgements and disclosures made in our
financial reporting in relation to recoverability
of trade receivables and advances to
customers, the carrying value of goodwill
and intangibles, revenue recognition and
various tax provisions, as well as reviewing
the analysis behind our going concern and
viability statements and considering the
processes that underpinned the production
of the Annual Report and Accounts. The
Committee’s consideration of revenue
recognition and recoverability of trade
receivables required a heightened level of
focus, as a result of issues associated with
the implementation of a complex Enterprise
Resource Planning (‘ERP’) system upgrade
in our Matthew Clark and Bibendum (‘MCB’)
business.
As is usual, the Committee considered the
Group’s Principal Risk disclosures for the
financial year ended 28 February 2023. The
Committee is satisfied that the statements
made by executive management on pages
30 to 39 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.
During the reporting period, the Committee
is pleased with the good progress made
in enhancing our information technology
systems and controls to defend against
cyber-attacks. Our journey to achieving
‘Cyber Essentials’ accreditation through
the National Cyber Security Centre has
proved a worthwhile exercise and, with the
benefits seen here, we remain committed to
continuing the focus on cyber security. Our
progress has resulted in positive changes
in our IT landscape and has driven a shift
in culture and security awareness, which is
particularly pleasing.
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, which has enabled the
Committee to fulfil its role in providing effective
scrutiny and challenge. As Chair, I regularly
engage with the Head of Internal Audit and
the external auditor both ahead of committee
meetings and also as part of a regular dialogue
we have on issues relevant to the Committee,
in each case in order to ensure that each
of their independent views, opinions and
comments are reflected in the Committee’s
deliberations and dealings.
There were seven meetings of the Committee
during the year. The meetings of the
Committee were generally scheduled to take
place in advance of Board meetings. This
allowed me and my predecessor, Emer Finnan,
to provide the Board with a detailed update on
the key items discussed during our meetings.
The Board also received copies of the minutes
of the Committee meetings.
In my capacity as Audit Chair, I am available
to all Board members to discuss any audit or
risk related concerns they may have, either
on a collective or individual basis. During
FY2023, myself and Emer, in our role as
Audit Chair, both met with the external audit
partner and the Head of Internal Audit, without
management on a regular basis.
More information about the Committee’s
activities during the year can be found in the
pages which follow.
The Year Ahead
Looking forward, the Committee will continue
to review the financial reporting of the Group
and its accounting policies. Any major
accounting issues of a subjective nature will be
considered and discussed by the Committee,
and the Committee will also adopt a strong
focus on changes to the Group’s information
technology systems and controls, including
a review of the resolution of the recent
upgrade, and the development of additional
risk mitigation actions associated with such
IT system changes. The Committee will also
consider any additional requirements resulting
from the expected UK Corporate Governance
changes. The Committee fulfils a key role
in assisting the Board in ensuring that the
integrity of the Group’s financial statements
Dear Shareholder
On behalf of the Audit
Committee (‘the Committee’)
I am pleased to present its
report covering the work of the
Committee during FY2023.
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.
I am delighted to have joined the Board of
C&C Group plc and to have been appointed
as Audit Committee Chair. I am pleased
to have found that both the Board and
Executive are highly focused on improving
the control environment of the Company
and I will continue to focus my energies
on ensuring our internal control processes
continue to operate effectively and remain
appropriate for the changing environment in
which the Group operates.
Year in Review
I am pleased to present the Audit
Committee report covering the work done
by the Committee during FY2023. I will
continue to build on the excellent work
carried out by my predecessor Emer Finnan
over the last eight years and will seek to
support the Board of Directors of C&C
in my capacity as non-executive Chair of
the Audit Committee. A vital aspect of the
Committee’s work is to provide independent
scrutiny and challenge to ensure the Annual
C&C Group plc Annual Report 2023 101
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
John Gibney
Audit Committee Chair
24 May 2023
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.
Membership and Attendance
The following non-executive Directors served on the Committee during the year:
Member
Emer Finnan (Chair) 1
Vincent Crowley
Jim Thompson
John Gibney2
Vineet Bhalla3
Member Since
2 July 2014
22 March 2016
1 March 2019
26 October 2022
8 February 2023
Number of
Meetings
Attended
Maximum
Possible
Meetings
7
7
7
2
1
7
7
7
2
1
1. Emer Finnan left the Board and Committee on 8 February 2023.
2. John Gibney joined the Board and Committee on 26 October 2022.
3. Vineet Bhalla joined the Committee on 8 February 2023.
All members of the Committee are and were
considered by the Board to be independent
throughout the year under review.
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 to
have the necessary competence and broad
experience 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 86 and
87 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 seven scheduled
occasions during FY2023. 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, the former
Chair, Ralph Findlay, in his capacity as
Chair, David Forde, former Group Chief
Executive Officer, Patrick McMahon, in his
capacity as 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 Ernst & Young (‘EY’),
the External Auditor, were invited to attend
meetings.
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 base case and downside forecast cash
flows for the period to 31 August 2024
including sensitivity to macro-economic
uncertainties such as a sustained downturn
in demand, higher input costs and interest
rates, combined with significant operational
disruption, along with the Group’s own
mitigating actions on costs and cash
flows. The Committee also considered the
Company’s financing facilities, the level of
available liquidity and covenant compliance
over the forecast period. Based on this, the
Committee confirmed that the application of
the going concern basis for the preparation
of the financial statements continued to be
appropriate with no material uncertainties.
Corporate GovernanceBusiness & StrategyFinancial Statements 102
Audit Committee Report
(continued)
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 154.
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
FY2023 financial statements, please see
‘Going Concern’ on page 38 and ‘Viability
Statement’ on pages 38 to 39. The
Directors’ Going Concern statement is set
out on page 38.
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.
The Committee’s focus on this area was
heightened this year as a result of issues
associated with the implementation of a
complex ERP system upgrade in our MCB
business, in addition to the cost of living
crisis, and the consequential impact on
some of our customers. The Committee
considered the basis used by management
in calculating the expected credit losses,
whether it adequately captured the 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
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. 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.
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
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 FY2023 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 2023 Annual Report and Accounts
taken as a whole, was fair, balanced and
understandable and provided the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy.
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 considering business
changes and performance, challenging and
confirming their alignment to the achievement
of the Group’s strategic objectives. 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. Those changes
to our risk profile were then approved by
the Board. The Group’s principal risks and
uncertainties are set out on pages 30 to 39.
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
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.
C&C Group plc Annual Report 2023 103
Improving IT Systems and Cyber
Security
The Group implemented a complex
Enterprise Resource Planning ('ERP’)
transformation in February 2023 in the
Matthew Clark and Bibendum (‘MCB’)
business, further aligning and streamlining
our technology infrastructure across
the Group. This is a key step in our
digital transformation and optimisation
of the business which will enable further
automation and simplification of our
business processes.
The implementation of the ERP has taken
longer and has been significantly more
challenging and disruptive than originally
envisaged, with a consequent material
impact on service and profitability within
MCB. Service levels had largely returned
to normal levels by the end of March 2023,
however continuing system implementation
challenges, impacted by greater seasonal
trading volume, saw a deterioration in
service levels in April 2023. An improvement
through May 2023 is being achieved by
investing in material additional cost and
resources, ahead of a system fix being
implemented to restore service to normal
levels permanently. We will undertake a
thorough review of the implementation,
system fixes and mitigation plans to ensure
the Company has the required level of
planning, capability and resilience in its
systems to avoid any reoccurrence in the
future.
We continued to review our information
security and cyber preparedness policies
and procedures and further enhanced
our Information Technology systems
and controls. 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 continue to pursue Cyber Essentials
Plus accreditation from the National
Cyber Security Centre (‘NCSC’). Further
reassurance and support was provided
through the results of a third-party cyber
controls assessment, which confirmed that
the direction of the improvement project
was correct, with the results shared with the
Board.
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 2022, 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.
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. 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.
The FY2024 audit plan was designed with
reference to the Group’s principal risks. It
was informed by an assessment of the risk
profile of the different areas of the business
and has considered all existing and
emerging risks, incorporating both elements
where appropriate.
The Committee remains satisfied that the
Internal Audit function has the necessary
resources, objectivity, and competency
to fulfil its mandate. It is also satisfied that
the Internal Audit function has adequate
standing and is free from management
influence or other restrictions.
In May 2023, 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 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
personnel across the business.
The Committee also considered the
robustness of the FY2023 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. On the
basis of the Committee’s evaluation and
considering the views of other key internal
stakeholders, the Committee concluded
that both the audit and the audit process
were effective, having been carried out in an
independent, professional, organised and
Corporate GovernanceBusiness & StrategyFinancial Statements 104
Audit Committee Report
(continued)
constructive manner, with an appropriate
level of challenge and scepticism over
management’s treatment of significant
reporting and accounting matters.
Audit Tender
As reported last year, the current External
Auditor was first appointed for the year
ended 28 February 2018. The Group’s lead
audit engagement partner, Pat O’Neill had
been the same since that date. The External
Auditor is required to rotate the audit partner
every five years and therefore the existing
partner was required to rotate after the 2022
AGM. We thank Pat for the thoroughness
and commitment he brought to the audit. He
has been replaced by Dermot Quinn.
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
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 FY2023, EY undertook no non-audit
work.
Confidential Reporting
Programme
In line with best practice, the Group has
an independent and confidential reporting
programme in all 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 FY2023, 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 2023 external
board evaluation process. The overall
conclusion from this year’s external
evaluation was that the Committee
continues to operate effectively. However,
we were pleased to receive suggestions and
ideas to further improve the way in which
the Audit Committee approaches its work,
and a number of these will be incorporated
into our work. Such areas include a heighted
focus on risk management procedures
related to IT systems implementation, and
increased engagement at Audit Committee
meetings with risk owners and recipients
of Internal Audit reviews. An explanation
of how this process was conducted, the
conclusions arising from it and the action
items identified is set out on pages 96 to 97.
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 24 May 2023.
John Gibney
Audit Committee Chair
C&C Group plc Annual Report 2023
Environmental, Social and Governance Committee Report
105
Throughout the course of FY2023, the
priority for the Committee has been the
continuous progression of the Company’s
ESG strategy, as detailed on pages 56 to
79, and ensuring ESG remains at the heart
of the Company’s strategy and an integral
component of its operations.
FY2023 and approved by the Remuneration
Committee. An environmental target also
forms part of the performance conditions
of the 2022 Long Term Incentive Plan
(‘LTIP’). More details can be found in the
Remuneration Committee Report on pages
115 to 135.
C&C’s Head of ESG and its
Communications and Corporate Affairs
Director continue to lead the Company
towards our vision of “Delivering to a better
world!” relating to ESG targets. A team
of five ESG Champions from across the
business provide additional support by
analysing and appraising the ESG strategy,
its six pillars and the KPIs and initiatives
underpinning it. Our ESG Champions
provide invaluable input as we continue
to implement the ESG Strategy. ESG
Champions are appointed on an 18-month
term, allowing them to be involved in the
setting of long-term, meaningful targets
and providing an opportunity to help shape
the future of the business at a strategic
level on ESG matters. The ESG Champions
report back to their respective teams which
ensures an element of alignment on ESG
related issues throughout the business. The
ESG Champions were invited to participate
at the five Committee meetings held during
FY2023.
Important progress has been made in
incorporating the TCFD framework into
our reporting and risk management
processes. During the year, the Board and
the Committee received additional training
from external providers on the quantitative
scenario analysis required by TCFD
which will extend into FY2024 and builds
upon the work completed in FY2022. By
strengthening our governance, we continue
to accelerate efforts to mitigate climate
change risks and identify opportunities
for transitioning to be a carbon neutral
business by 2050. Full details on the work
undertaken on TCFD during FY2023 can be
found on pages 40 to 49.
Protecting our environment remains an
integral part of the Company’s strategy.
For this reason, an environmental target
was put forward to the Committee during
A materiality assessment exercise, in line
with the Global Reporting Initiative, was
started during the year to ensure that the
Company’s ESG priorities remain aligned
with the views of our key stakeholders. The
exercise will strengthen the Company’s
response to ESG regulations, such as
the Corporate Sustainability Reporting
Directive, our reporting efforts in line with
TCFD, while ensuring that the ESG matters
of most importance to stakeholders
are captured accurately and part of the
Committee’s deliberations. Third-party
ratings, including the Group’s current
AA rating under the MSCI Index, were
taken into account to determine impact
materiality.
To promote the alignment of the ESG
strategy with financing decisions, the
Committee reviewed and supported a
proposal to link ESG KPIs on carbon
emissions, water efficiency and health and
safety, in a debtor securitisation exercise
and in the re-financing exercise during the
year.
A key element of our ESG strategy is to
enhance the wellbeing of our employees
and foster a diverse, inclusive and equitable
workforce. To this end, following feedback
received from colleagues, Employee
Resource Groups (‘ERGs’) were set up
during FY2023 on the topics of mental
health and wellbeing physical health, working
parents and menopause. Each ERG is
sponsored by an Executive Committee
member. The ERGs inspire conversation,
connect employees from across the
Company and encourage innovative ways
to look at challenges. When there are gaps
in experiences, the ERGs have been vital in
promoting awareness of an underrepresented
group which ensures the appropriate action
can be taken. The ERGs have met every
month during FY2023, given a presentation
Dear Shareholder
I am pleased to present the
Group’s Environmental, Social
and Governance (‘ESG’)
Committee report covering
the work of the Committee
during FY2023. 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
The Board established an ESG Committee
in 2020 to reflect C&C’s ongoing
commitment to operating a sustainable
business and provide the Company
with rigour, support and challenge on
ESG matters. The ESG Committee has
primary responsibility for the oversight of
sustainability and climate change issues and
provides regular updates to the Board on
these matters.
The Board attended an ESG Committee
meeting during the year to receive a
presentation from an external provider on
the Task Force on Climate-related Financial
Disclosures (‘TCFD’) and a discussion and
critique of the Company’s approach to ESG
formed part of the Board’s annual strategy
day.
Corporate GovernanceBusiness & StrategyFinancial Statements 106
Environmental, Social and Governance Committee Report
(continued)
In February 2023, I informed the Board
that I would not be seeking re-election
and will step down from my position as an
Independent Non-Executive Director at
the conclusion of the 2023 AGM, as it has
become increasingly difficult to dedicate
the necessary time required to fulfil my
responsibilities as Non-Executive Director
along with the requisite travel from the
USA. It has been my pleasure to Chair
the ESG Committee since 2020 and I’m
proud of the progress we have achieved
to date, supporting the Group’s ongoing
commitment to environmental, corporate
social responsibility and corporate
governance matters.
Vineet Bhalla will succeed me as Chair of
the ESG Committee at the conclusion of
the 2023 AGM. Through the Committee’s
composition, resources and the
commitment of its members, I believe that it
remains well placed to meet the challenges
of an ever-changing world and to discharge
its duties effectively in the year ahead.
On behalf of the Board
Jim Thompson
Chair of the ESG Committee
24 May 2023
to the Executive Committee on progress to
date and engaged with our employees to mark
cultural and diversity related events during the
year. The work of the ERGs is reported to the
ESG Committee.
The Non-Executive Directors have
continued to engage with a range of
employees from each business area
through a series of ‘Our Forum’ meetings
during FY2023. The meetings, organised
by the Head of ESG, allow employees to
raise with the Non-Executive Directors and
Executive Committee members, a variety of
issues, including views on the effectiveness
of the Company’s strategy and what the
Company could improve to make C&C a
great place to work. More details on the
Board’s engagement with the workforce,
including key outcomes from the ‘Our
Forum’ meetings, can be found on pages
93 to 94.
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, equity and
inclusion (‘DE&I’) to ensure we have a
balanced pipeline of talent for the future.
This year we expanded the Company’s
DE&I agenda by setting up a DE&I Advisory
Group, chaired by the Company’s GB
Commercial Director, and publishing a
Gender Pay Gap Report covering the whole
Group. One of our ESG KPIs, approved by
the Committee, in collaboration with the
Nomination Committee, is linked to diversity
and inclusion.
The Committee tracks KPI performance
at each meeting and considered regular
reports on matters pertaining to the pillars
of the ESG strategy, such as Ethical and
Sustainable Procurement. During the
year, the Committee approved the TCFD
Disclosure, the Responsibility Report and
ESG Committee Report in the 2022 Annual
Report and Accounts, reviewed the results
of employee surveys and recommended
charity and colleague volunteering policies
for approval by the Board.
In terms of community engagement, the
Committee was delighted to endorse the
Company’s partnership with the Big Issue
Group, one of the UK’s leading social
enterprises that exists to create innovative
solutions through enterprise, to unlock
social and economic opportunity for the
14.5m people in the UK living in poverty.
The mutually beneficial partnership aligns
to our ESG strategy and allows C&C to
support some of the most vulnerable
people in our community. Volunteering
opportunities also enhances the health,
wellbeing, and capability of our colleagues.
More details on the partnership with the
Big Issue Group can be found on 75.
We continue to search for partnership
opportunities of a similar nature in the
Republic of Ireland.
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.
Year Ahead
Looking forward, the Committee will
continue to challenge the business
proactively to tackle the sustainability
topics relevant to our stakeholders and
ensure the right processes are in place to
mitigate climate-related risks and identify
opportunities, as we journey towards
becoming a carbon neutral business. In
recognising the importance of keeping
abreast of new developments, further
training will be delivered to the Board during
FY2024 via the delivery of virtual workshops
on ESG matters from an external provider.
C&C Group plc Annual Report 2023 107
Roles and Responsibilities of the
Committee
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
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 86 and 87. 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 five occasions
during the year ended 28 February 2023. All
members of the Committee attended each
meeting except on one occasion where
Patrick McMahon could not attend. At the
invitation of the Committee, the outgoing
Board Chair, the incoming Board Chair, the
former Group CEO, the Company Secretary
and Group General Counsel, the Head of
ESG, the Communications and Corporate
Affairs Director, the Group Engineering
Manager, the ESG Analyst, the GB
Commercial Director, the Group HR Director
and the ESG Champions were invited to
attend meetings from time to time.
Evaluation of the Committee
The evaluation of the Committee was
completed as part of the 2023 external
board evaluation process. Based on the
review the Committee concluded that it has
a number of important strengths including
confidence in its reporting, good discussion
and debate, and high quality chairing.
An explanation of how this process was
conducted, the conclusions arising from
it and the action items identified is set out
on pages 96 to 97. 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 24 May 2023.
Jim Thompson
Chair of the ESG Committee
Membership and Attendance
The following directors served on the Committee during the year.
Member
Jim Thompson (Chair)
Vineet Bhalla1
Jill Caseberry
Patrick McMahon2
Helen Pitcher
Member Since
24 September 2020
9 February 2023
24 September 2020
24 September 2020
24 September 2020
Number of
Meetings
Attended
Maximum
Possible
Meetings
5
0
5
4
5
5
0
5
5
5
1. Vineet Bhalla did not attend any ESG Committee meetings during FY2023 given his appointment date to the
Committee.
2. Patrick McMahon was unable to attend the meeting on 6 December 2022 due to illness.
Corporate GovernanceBusiness & StrategyFinancial Statements 108
Nomination Committee Report
Year in Review
This year, we saw some important changes
to the composition of our Board.
At the 2022 AGM, Stewart Gilliland stepped
down from his role as Chair of the Board
and Chair of the Nomination Committee.
During his time at C&C, the Group has
been transformed into the leading final-
mile distributor to the on-trade in the UK
and Ireland, while navigating the business
through the most challenging period in our
industry’s history. On behalf of the Board
and all at C&C, I would like to thank Stewart
for his commitment and stewardship. This
decision has given me the opportunity to
join the Board of Directors as Chair of the
Board and of the Nomination Committee.
We were pleased to announce the
appointment of John Gibney as an
independent Non-Executive Director on
26 October 2022. John has taken on
the role of Chair of the Audit Committee
following Emer Finnan’s decision to step
down from the Board on 8 February 2023.
John’s appointment followed a thorough
evaluation and succession process led
by the Committee in conjunction with
an independent search firm, Warren
& Partners. In addition to his finance
background, John brings significant industry
expertise and listed company experience to
the Board, and we are delighted to welcome
him to C&C. With a deep understanding of
the beverage and hospitality sector in the
UK and internationally, John has extensive
listed company board experience in both
an executive and non-executive capacity
and has already contributed significantly to
Board level deliberations. Vineet Bhalla, was
also appointed as a member of the Audit
Committee on 8 February 2023 in light of
his significant experience in IT and data
management, increasingly important in the
internal and external audit processes. I want
to thank Emer for her significant contribution
to the Group and stewardship of the Audit
Committee during her tenure on the Board.
Emer brought valuable expertise to C&C
and we wish her every success in her future
endeavours.
In further Board changes, we announced
in February 2023 that Helen Pitcher would
not seek re-election and would step down
from her position as a Non-Executive
Director at the conclusion of the 2023 AGM.
This followed her appointment as chair of
the Judicial Appointments Commission.
In addition, Jim Thompson advised the
Board that he would not seek re-election
and would step down from his position as
a Non-Executive Director at the conclusion
of the 2023 AGM given the challenges in
dedicating the necessary time required to
effectively undertake his responsibilities
on the Board as he lives in the US. Vineet
Bhalla will succeed Jim Thompson as Chair
of the ESG Committee. The Board would
like to thank both Helen and Jim for their
significant contributions and service to the
Group during their respective tenures on
the Board. As independent directors, both
Helen and Jim brought valuable expertise
and unique insights to C&C.
The process to recruit two additional
independent Non-Executive Directors has
commenced. C&C will also appoint a new
chair of the Remuneration Committee to
succeed Helen Pitcher in due course.
Both the Committee and the Board are
mindful that progress needs to be made in
relation to the level of female representation
on the Board. Following the significant
changes to the Board recently, the diversity
of our Board has fallen below our diversity
aims. The Committee and the Board fully
support diversity, equity and inclusion
in all its dimensions and recognise the
important contribution it makes to high
quality decision making and innovative
thinking. As we look to appoint two new
Directors to the Board, diversity will be part
of our key considerations. I look forward
to updating our progress in our search
for two new additional Non-Executive
Directors, and in ensuring the appropriate
balance of diversity on our Board. Diversity,
equity and inclusion remained firmly on the
Committee’s agenda, both at a Board level
and throughout the Group.
Dear Shareholder
I am pleased to present the
Nomination Committee (‘the
Committee’) report covering
the work of the Committee
during FY2023. 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. 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.
C&C Group plc Annual Report 2023
109
These changes on our Board reflect the
importance of succession planning on the
Board and throughout the organisation.
This includes understanding the steps
taken to develop talent from within C&C,
as well as overseeing promotions and
changes made within the Executive
Committee towards ensuring the most
appropriate balance of skills to support
the execution of our strategy.
As detailed on page 85, on 18 May
2023, David Forde stepped down as the
Group’s Chief Executive Officer (‘CEO’)
and Director with immediate effect,
and consequently Patrick McMahon,
Chief Financial Officer (‘CFO’), was
appointed CEO with immediate effect.
I have been appointed Executive Chair
to support the management transition
as Patrick McMahon will also retain his
responsibilities as CFO until a new CFO is
appointed.
The evaluation of the Committee was
completed as part of the 2023 external
board evaluation process. Based on the
review the Committee concluded that
it has a number of important strengths
including confidence in the assessment
of new appointments, clear specification
of what is needed from candidates and
high quality chairing. An explanation of
how this process was conducted, the
conclusions arising from it and the action
items identified is set out on pages 96
to 97. The Committee has considered
this in the context of the matters that are
applicable to the Committee.
I hope you find the information on the
following pages about the work of the
Committee helpful and informative.
On behalf of the Board
Ralph Findlay
Nomination Committee Chair
24 May 2023
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, considering 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
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.
Membership and Attendance
The following Non-Executive Directors served on the Committee during the year.
Member Since
7 July 2022
1 June 2019
5 July 2018
23 October 2019
24 October 2017
Number of
Meetings
Attended
Maximum
Possible
Meetings
3
5
5
5
2
3
5
5
5
2
Meeting Frequency and Main
Activities during the year
The Committee met on five occasions
during the year ended 28 February 2023.
All members of the Committee attended
each meeting. At the invitation of the
Committee, the former Group CEO, Vineet
Bhalla, Jill Caseberry, John Gibney, Jim
Thompson, the interim Group Director of
Human Resources and the Group Director
of Human Resources 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.
Member
Ralph Findlay (Chair)1
Vincent Crowley
Emer Finnan2
Helen Pitcher
Stewart Gilliland3
1. Ralph Findlay joined the Committee on 7 July 2022.
2. Emer Finnan retired from the Board on 8 February 2023.
3. Stewart Gilliland retired from the Board on 7 July 2022.
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 86
and 87. Their remuneration is set out in the
Directors’ Remuneration Committee 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
Company Secretary and Group General
Counsel is Secretary to the Committee.
Corporate GovernanceBusiness & StrategyFinancial Statements 110
Nomination Committee Report
(continued)
Audit Chair Appointment
As outlined in his introductory letter, the
previous Chair of the Audit Committee
stepped down from her role in February
2023 following eight years on the Board and
four years as Chair of the Audit Committee.
A selection process for a new Audit Chair
was led by the Chair, and the Committee,
with assistance from the Company
Secretary and Group General Counsel.
The services of an executive search firm
were used to identify potential candidates.
The Committee considered the credentials
of several search consultants before
recommending the appointment of Warren
& Partners, which is a signatory to the
voluntary code of conduct for executive
search firms. Warren & Partners does not
have any 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 Warren & Partners, which
referred to the following characteristics and
experience:
• Experience as an Audit Committee Chair;
• Qualified accountant;
• Plc experience and an understanding
of the UK corporate governance
environment;
• Broad sector experience; and
• A positive match with the culture of the
Group and the members of the Board.
The search from Warren & Partners was
rigorous 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 and social
backgrounds). The Committee unanimously
selected John Gibney as its preferred
candidate. John brings significant industry
expertise and listed company experience
to the Board. With a deep understanding of
the beverage and hospitality sector in the
UK and internationally, John has extensive
listed company board experience in both an
executive and non-executive capacity.
Following the Committee’s recommendation
and due consideration by the Board, John
Gibney was appointed our new Audit Chair
designate, joining the Board on 26 October
2022 and succeeded Emer Finnan as Audit
Chair on 8 February 2023. The Board is
pleased to have recruited an individual with
his experience and expertise to chair the
Audit Committee.
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.
Other Board Changes
In February 2023, we announced that
that Helen Pitcher would not seek re-
election and would step down from her
position as a Non-Executive Director at the
conclusion of the 2023 AGM. This followed
her appointment as chair of the Judicial
Appointments Commission.
In addition, Jim Thompson advised the
Board that he would not seek re-election
and would step down from his position as
a Non-Executive Director at the conclusion
of the 2023 AGM, as he was finding
it increasingly difficult to dedicate the
necessary time required as a non-executive
director and the requisite travel from the
USA. The Committee, recognising Vineet
Bhalla’s interest, passion, knowledge and
enthusiasm for environmental, social and
governance matters, were firmly of the
view that Vineet Bhalla was a worthy and
imminently suitable candidate to succeed
Jim Thompson as Chair of the ESG
Committee. Vineet Bhalla will succeed Jim
Thompson as Chair of the ESG Committee
on that date and joined the ESG Committee
on 8 February 2023.
New Non-Executive Directors
The process for making new appointments
to the Board is usually led by the Chair,
except when the Committee is dealing
with the Board Chair succession. When
considering new appointments, all
recommendations to the Board are made
C&C Group plc Annual Report 2023 111
on merit against objective criteria which take
into account experience, skills and ensuring
an appropriate diversity, in the broadest
sense, in the resulting membership of the
Board. Time commitment, independence
and potential conflicts of interest are
considered before any recommendation is
made to the Board. Any candidates who
are shortlisted are interviewed by the Board
Chair, Committee members, other Directors
and the Company Secretary and Group
General Counsel. The Board is updated
on the progress of the selection process
and receives recommendations from the
Committee for appointment.
The Committee is mindful that progress
needs to be made in relation to the level
of gender diversity on the Board to ensure
we meet the recommendations set by
the FTSE Women Leaders Review and
targets specified in the Financial Conduct
Authority’s Listing Rules, under which C&C
will report in FY2024. This is an area of
focus for the Committee. The target set by
the Parker Review continues to be met.
The process to recruit two additional Non-
Executive Directors has commenced and
we look forward to updating as to progress.
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.
In order to ensure that there are effective
succession plans in place for the Executive
Committee team and senior management,
the Board has visibility of a wide range of
colleagues who have been identified as
potential succession candidates in the
short, medium and long term.
Developing C&C’s diverse pipeline of
internal talent, and the organisation’s
ability to attract, retain and develop
skilled, high potential individuals is a focus
of discussion. To that end, individuals
identified in the talent pipeline are provided
with the opportunity to interact with Board
members both informally and through
attendance at Board and Committee
meetings to present on specialist topics.
This not only provides valuable experience
and exposure for those individuals to the
Board, but also assists the Board when
assessing the strength of succession plans
in place and areas of development need for
relevant individuals. In FY2023, a number
of Executive Committee members and
senior management were invited to present
to the Board and its Committees on topics
pertaining to C&C’s strategic priorities,
financials and ESG. Opportunities for
interactions outside of the Board meeting
calendar were also pursued and developed.
This will continue to be an area of focus
during FY2024 and beyond.
Separately, on at least an annual basis,
each Director’s intentions are discussed
regarding 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.
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. More details can be found on
pages 112 to 113.
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, Inclusion and Wellbeing
Policy and 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 our
employees, regardless of their contract,
location or role in the business.
As at 28 February 2023, female
representation on the Board was 22% (two
out of nine). The Committee is mindful of
both the FTSE Women Leaders Review and
the FCA’s diversity targets at Board level.
The Company is fully supportive of these
aims and is committed to ensuring that
the proportion of female representation will
meet this requirement by 2025.
Corporate GovernanceBusiness & StrategyFinancial Statements 112
Nomination Committee Report
(continued)
As at 28 February 2023, the composition
of the Board met the Parker Review
recommendations as it has done since
2021.
As at 28 February 2023, the percentage of
females on the Executive Committee was
33%. More details on workforce diversity
can be found below.
We aim to ensure our inclusivity applies
to all aspects of their careers, including
recruitment, selection, benefits and
opportunities for training and promotion.
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 equity, 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 equity, 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, in
FY2023 we established employee relations
groups (‘ERGs’) in the areas of mental
health and wellbeing, physical health,
working parents, menopause and diversity,
equity and inclusion as one of a number of
intended concrete and meaningful steps
to reinforce our commitment to diversity
and inclusion. The diversity, equity and
inclusion ERG consists of employees from
across the Group. The ERG met every
month during FY2023, gave a presentation
to the Executive Committee on progress to
date and engaged with our employees to
mark cultural and diversity related events
during the year. The work of the ERG is
reported to the ESG Committee. A further
diversity, equity and inclusion survey is
to be conducted in FY2024 to add to our
understanding.
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; and
• 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 2023 is
as follows:
Male Number/
Percentage
Female Number/
Percentage
Directors
7/78%
2/22%
Senior
Managers
Other
employees
58/64%
32/36%
1,913/75%
647/25%
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.
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.
Having undertaken a performance
evaluation of both the Board and individual
Directors, the Committee considered
the independence of each of the Non-
Executive Directors, being Vineet Bhalla,
Jill Caseberry and Vincent Crowley, each
of them having confirmed their willingness
to stand for re-election at the forthcoming
AGM. 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
C&C Group plc Annual Report 2023
113
Evaluation of the Committee
The Board is committed to transparency
and conducts a formal and rigorous
evaluation of its performance including the
performance of its Committees, individual
Directors and the Chair annually. The
Committee’s last external effectiveness
review was conducted in FY2020 and,
in compliance with the Code, in FY2023,
an external effectiveness review and
evaluation was undertaken. The Committee
discusses the outcome of the review of its
effectiveness annually.
Based on the review the Committee
concluded that it has a number of important
strengths including confidence in the
assessment of new appointments, clear
specification of what is needed from
candidates, and high quality chairing.
For further information on the evaluation of
the Board, the Committees and individual
Directors, including details of the evaluation
process, outcome and next steps, please
refer to pages 96 and 97 of the annual
report.
This report was approved by the Board of
Directors on 24 May 2023.
Ralph Findlay
Chair of the Nomination Committee
that each remained fully independent in
both character and judgement.
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.
The Committee had also undertaken
a review of each of the Non-Executive
Directors’ other interests, external time
commitments and tenure, and has
concluded that each of them is independent
in character and judgement and that there
are no relationships or circumstances likely
to affect (or which appear to affect) his
or her judgement. The Committee is also
satisfied that each of them 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.
Time Commitment
In line with its terms of reference, the
Committee performs an annual review of
the time required from the Chair, Senior
Independent Director 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 114
Nomination Committee Report
(continued)
Diverse and Effective Board
The Board comprises 8 Directors, with a broad and complementary set of technical skills, educational and professional experience,
nationalities, personalities, cultures and perspectives.
Board balance
Independence
Gender diversity
Ethnicity
Independent
Non-independent
(including Executive Chair)
6
2
Male
Female
Age Range
Tenure
40-50
51-60
61-70
2
1
5
0-3 years
4-7 years
8-10 years
6
2
4
3
1
White
Indian
7
1
Nationality
Irish
British
USA
2
5
1
Board Skills Matrix
Director
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
Ralph
Findlay
Patrick
McMahon
Vineet
Bhalla
Jill
Caseberry
Vincent
Crowley
John
Gibney
Helen
Pitcher
Jim
Thompson
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
C&C Group plc Annual Report 2023 Directors’ Remuneration Committee Report
115
Policy are proposed this year, the Policy
will not be subject to a vote at the 2023
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. The Committee will
review the Policy and incentive framework
over the next year in advance of our
intention to seek shareholder approval of
an updated Remuneration Policy at the
2024 AGM in line with the usual three year
timetable.
Last year, shareholders showed a high level
of support for our Remuneration Report,
reflected in the significant shareholder
support of this proposal at the 2022 AGM.
Information on the membership of the
Remuneration Committee and its main
activities in FY2023 is set out on page 119.
The Committee remains mindful that
decisions around executive pay should be
proportionate and demonstrate a strong
link between reward, performance and
shareholder alignment. In this light, we are
comfortable that the policy has operated as
intended and remuneration is appropriate,
considering internal and external factors
and measures (including pay ratios and
gaps, colleague pay, the cost-of-living crisis
and the overall stakeholder experience).
Business context
FY2023 has been another challenging year,
from the impact of the war in Ukraine, to a
tightening labour market and an increasing
inflationary environment, with significant
hikes experienced in both the cost of labour
and energy prices. Our colleagues have
remained resilient and dedicated throughout
this period and have continued to work
tirelessly to meet customer demands. The
strength and resilience of our business and
our team is reflected in the strong results
for this year, with C&C delivering significant
revenue and operating profit growth, as
detailed throughout this Annual Report. The
inherent strength of our business model and
continued disciplined cash management
with bank net debt at historic lows has
allowed for the resumption of the dividend.
The Group implemented a complex
Enterprise Resource Planning ('ERP’)
transformation in February 2023 in the
Matthew Clark and Bibendum (‘MCB’)
business, further aligning and streamlining
our technology infrastructure across
the Group. This is a key step in our
digital transformation and optimisation
of the business which will enable further
automation and simplification of our
business processes.
The implementation of the ERP has taken
longer and has been significantly more
challenging and disruptive than originally
envisaged, with a consequent material
impact on service and profitability within
MCB. More details can be found on page
85.
Dear Shareholder
On behalf of the Board, I
am pleased to present the
Directors’ Remuneration
Committee Report (‘Report’)
for the year ended 28
February 2023.
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
Executive Remuneration Outcomes FY2023
The FY2023 remuneration outcomes for the Executive Directors are set out in the following table:
Opportunity
Performance Measures
Out-turn
Annual Bonus
125% of
salary
The annual bonus plan during FY2023 was based on
three performance measures, which were a mix of
financial and non-financial metrics:
• Group Operating Profit (‘GOP’) (65% of the
opportunity)
• Free Cash Flow Conversion (‘FCF’) (20% of the
opportunity, subject to the achievement of GOP)
• ESG metric (15% of the opportunity, subject to the
achievement of GOP)
Actual performance, as detailed on page
126, was as follows:
• GOP – €84.1m
• FCF – 64.6%
• ESG metric – 7.4
Considering that GOP for 2023 was
below target, no bonuses will be paid
to Executive Directors in respect of
FY2023, in spite of the achievement of
our ESG metric.
Corporate GovernanceBusiness & StrategyFinancial Statements 116
Directors’ Remuneration Committee Report
(continued)
Opportunity
Performance Measures
Out-turn
LTIP: 150%
of salary
LTIP: 134%
of salary
Long-term
Incentives
awarded in the
year
Long-term
incentives
vesting in
respect of
performance in
FY2023
As set out on page 118, the vesting of the FY2023 LTIP
awards will be subject to three performance conditions:
• EPS Growth (45% of the opportunity)
• Free Cash Flow Conversion (35% of the opportunity)
• Environmental Target (20% of the opportunity)
As set out on page 127, the LTIP awards granted to
the Executive Directors in FY2021 were subject to an
assessment of overall financial performance over the
period FY2021 – FY2023, and separate performance
conditions based on the following three measures:
• FY2021 Liquidity (30% of the opportunity)
• FY2022 Net debt to EBITDA (35% of the opportunity)
• FY2023 EPS (35% of the opportunity)
Performance will be assessed over the
three year period ending with FY2025.
Reflecting the solid performance over
the period, the awards vested at 65% of
the maximum as detailed on page 127.
The vested awards will be subject to a
further two year holding period.
Application of the Executive
Remuneration Policy in FY2024
Our approach to the implementation of the
Policy in FY2024 is set out on pages 120 to
125.
FY2024 Bonus
In line with the Policy, the Executive
Directors will be eligible to earn a bonus
of up to 125% of salary, with 50% of any
bonus earned paid in cash and 50%
deferred into shares for three years. The
bonuses will be subject to performance
conditions based on a mixture of financial
and non-financial measures. Financial
measures will account for 75% of the
overall opportunity (split between operating
profit (50%) and cash (25%)). Non-financial
measures will be based on strategic goals
(15% of the overall bonus opportunity)
and an ESG measure based on workforce
engagement (10%). Details of the targets will
be disclosed in the Directors’ Remuneration
Report next year.
FY2024 LTIP awards
For the FY2024 grants, it is proposed
that the Free Cash Flow metric will be
removed, and replaced with a relative
Total Shareholder Return (‘TSR’) metric.
This change reflects market practice, the
Company’s strategic priorities and the fact
that cash is a performance measure for the
annual incentive. The FY2024 LTIP awards
will be based:
• 45% on EPS (as this captures long-term
sustainable earnings performance aligned
with the financial performance expected
by our shareholders);
• 35% on relative TSR against a bespoke
group of companies in the Travel
and Leisure Sector and the Food,
Beverage and Tobacco industry sector.
This provides alignment of Executive
Directors’ interests with value created for
shareholders and reflects the importance
of execution of the strategy translating
to increases in our share price. The TSR
constituents are: Domino’s Pizza Group,
JD Wetherspoon, Mitchells & Butlers,
SSP, Fullers, Gym Group, Hollywood
Bowl, Marston’s, Restaurant Group, Ten
Entertainment Group, Britvic, Cranswick,
Hilton Food Group, Premier Foods,
Tate & Lyle, AG Barr, Bakkavor, Devro,
Greencore, FeverTree; and
• 20% environmental targets (scope 1 &
scope 2 reduction targets) reflecting the
Group's decarbonisation goals.
Details of the targets are set out on page
134.
In line with our usual practice, the Executive
Directors’ LTIP awards will be granted at
the level of 150% of salary. The Committee
has carefully considered the quantum of
the LTIP taking into account the macro-
economic environment, the modest level
of incentive pay-outs for our Executive
Directors since they joined the business
and the need to retain and incentivise
key executives (including those below the
Board) in what continues to be challenging
conditions for the sector. The Committee
also recognised that stretching targets
have been set and that the inclusion of a
relative TSR measure mitigates the risk
of any “windfall gain” given the need for
performance relative to peers for this
element of the award to vest. In line with the
Policy and the LTIP rules, the Committee
has discretion to adjust LTIP vesting
outturns if 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.
C&C Group plc Annual Report 2023 117
at C&C, and as we build a culture where
everyone can progress. Ensuring that our
colleagues are paid a fair and equitable
rate for the work they do, regardless of
gender or other differences, is of extreme
importance to the Board. Going forward we
will continue to focus on areas that improve
our gender pay gap, and continue to update
our stakeholders on our progress. Further
details can be found on pages 88 to 89.
Conclusion
I will be stepping down as Chair of the
Committee following the conclusion of the
2023 AGM, and consequently this will be
my final report.
I would like to take this opportunity to
thank our major shareholders and the
key institutional investor bodies for the
time taken to engage with us during my
tenure as Chair. The feedback provided by
investors has influenced our perspective
and contributed greatly to the decision-
making of the Committee.
I hope you will join the Board in supporting
the resolution to approve the FY2023
Remuneration Report at this year’s AGM.
Helen Pitcher OBE
Remuneration Committee Chair
24 May 2023
Cost of Living Crisis and Employee
Engagement
The macro-economic headwinds have
not only impacted our business but also
the livelihoods of our colleagues at all
levels of the organisation. With that in
mind, the Committee has once again
devoted considerable time and attention
to the appropriateness of the Company’s
remuneration policies and procedures, in
the context of the “cost of living crisis”. To
further support colleagues, C&C has carried
out a pay review budget for FY2024, with
pay review matrices to ensure the budget is
focused on our lowest paid colleagues. To
do so, C&C has taken a “blended” salary
approach, with 83% of colleagues receiving
an increase of 5.4% and the lowest paid
receiving an increase of 7.0%. The CEO and
CFO’s salaries will increase by 1.2%. The
approach, that prioritises support to our
lowest paid employees, has been deemed
appropriate in these current exceptional
times and was endorsed in a leadership
forum attended by senior personnel across
the Group.
In further steps, the Company has
implemented a benefits platform, which
amongst other things, facilitates and
enables employee funded benefits such
as discounted shopping vouchers for
example, giving employees the opportunity
to have choices based on their personal
circumstances to supplement employer
funded benefits. Additionally, the Company
has introduced Digicare+ Workplace in
the UK, a remote health assessment tool
for employees as well as being a hub for
other services and supports the pillars of
physical, mental and financial wellness.
This mirrors a similar scheme in the ROI
where colleagues were offered physical
health checks from an external provider. It
is pleasing in those circumstances, to be
able to report that colleague engagement
has improved significantly, with engagement
in our employee survey exceeding 95% of
employees.
Remuneration Practices across C&C
The Committee considers pay and
employment conditions across the wider
Group when determining pay for Executive
Directors. The Group Director of Human
Resources makes regular presentations
to the Committee on the remuneration
structures across the Group, the salary
review process for the wider colleague
base as well as benefit and pension
arrangements. In considering increases to
the base salary for Executive Directors, the
Committee takes the Group-wide annual
salary review process into account.
In the leadership forum, our Group Director
of Human Resources presented on C&C’s
remuneration philosophy and principles,
as well as the proposed FY2024 salary
increases and participated in a question-
and-answer session. Feedback from
colleagues was relayed to the Committee
and taken into account when finalising
remuneration arrangements. My role as
the Non-Executive Director responsible
for engaging with HR and Operations is
an invaluable resource when reviewing
wider employee incentive arrangements,
particularly considering the difficult
macroeconomic environment we are living
in. During those meetings I can 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.
Gender pay gap reporting
We published our inaugural gender pay
gap report in December 2022, in line with
the regulatory requirements for companies
in Ireland having published gender pay
gap reports in the UK since the regulations
were introduced in 2019. This constitutes
an opportunity to further assess and report
on our strategy and progress towards
promoting equality, diversity and inclusion
Corporate GovernanceBusiness & StrategyFinancial Statements 118
Directors’ Remuneration Committee Report
(continued)
Executive Remuneration Outcomes for FY2023
Salary
As reported last year, Executive Directors’
salaries increased by 3.5% in FY2023 in line
with the wider workforce.
The vesting of the FY2023 LTIP awards will be subject to an assessment of the Company’s
underlying financial performance across the three-year performance period FY2023 –
FY2025.
Weighting
Measure
Further detail
FY2023 Bonus
45%
Earnings per
share
As set out in the Chair’s letter no bonuses
will be paid to Executive Directors in respect
of FY2023, in spite of the achievement of
our ESG metric.
35%
Threshold (25% vesting) – 22.2c
Maximum – 26.0c
By the end of year 3 target range (end of FY2025) rather
than as a cumulative target.
Free
cash flow
conversion
Threshold (25% vesting) – 65%
Maximum – 75%
By the end of year 3 target range (end of FY2025) 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 FY2025 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.
Executive Directors’ awards will be subject to a further two-year holding period.
Gender Pay Gap Disclosure
In December 2022 we published our latest Gender Pay Gap report, in line with the
requirements for companies in the UK with more than 250 employees. Companies in
Ireland with more than 250 employees are now also required to disclose their gender pay
gap, in line with the Gender Pay Gap Information Act 2021. Our report includes disclosures
pertaining to the following entities: Matthew Clark Bibendum Limited, Tennent Caledonian
Breweries Limited and M&J Gleeson Co u.c.. We also report our gender pay gap metrics
for Bulmers Limited on a voluntary basis, given that the entity is close to the reporting
threshold of 250 employees (248 employees). Details can be found on the Company’s
website at www.candcgroup.com.
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.
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 performance conditions
for FY2021 and FY2022 were set out in
the Directors’ Remuneration Reports for
those years. The performance conditions
for FY2023 were set in the year and are
based on Earnings Per Share (‘EPS’).
Details of the performance conditions for
each year are set out on page 127. Based
on the achievement of the performance
conditions, the awards vested at 65%. The
Committee has considered this formulaic
outcome and determined that the pay-out
level is appropriate in light of the overall
performance and shareholder experience
over the three-year performance period,
and that no discretion is necessary to adjust
the outturn.
Long-Term Incentives Awarded in
FY2023
In June 2022, the Committee made awards
to the Executives under the LTIP. The
Committee determined that for the FY2023
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.
C&C Group plc Annual Report 2023 119
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
Helen Pitcher (Chair)
Vineet Bhalla
Jill Caseberry1
Member since
1 March 2019
27 October 2021
1 March 2019
Number of Meetings
Attended
Maximum Possible
Meetings
11
11
9
11
11
11
1. Jill Caseberry was unable to attend the meetings on 6 June 2022 and 9 June 2022, which were called at short
notice, due to prior engagements.
All members of the Committee are and were
considered by the Board to be independent.
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 outgoing Board Chair, the
incoming Board Chair, the Chair of the
ESG Committee, the former Group CEO,
the Group CFO, the interim Group Director
of Human Resources, the Group Director
of Human Resources, members of the
HR team, along with representatives from
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 and Group General
Counsel is Secretary to the Committee.
• Receiving an update upon the 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 the FY2022 bonus outcome;
• Approval of the Directors’ Remuneration
Committee Report for the financial year
ended 28 February 2022;
• Approval of the FY2023 bonus and LTIP
measures;
• Setting the LTIP measures for the FY2023
element of the FY2021 grants;
• Considering the FY2024 remuneration
strategy and structure;
• Considering the results and implications
of the gender pay gap report and
reviewing and commenting on
recommendations to address the gap
and challenges faced by the sector;
• Approval of the FY2024 salary review;
and
• Consideration of the FY2024 bonus and
Main Activities in FY2023
LTIP measures.
External Advisers
The Committee seeks and considers advice
from independent remuneration advisers
where appropriate. During the year ended
28 February 2023, the Committee obtained
advice from Deloitte LLP. Deloitte’s fees for
this advice amounted to £30,000 (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 who 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 FY2023 external
board evaluation process. Based on the
review the Committee concluded that it has
a number of important strengths including
well managed remuneration disclosures,
improved communication with the Board
and other committees and high quality
chairing. An explanation of how this process
was conducted, the conclusions arising
from it and the action items identified are set
out on pages 96 to 97. The Committee has
considered this in the context of the matters
that are applicable to the Committee.
• Considering the remuneration
arrangements of Executive Committee
members and senior management;
Remuneration at a glance
Remuneration Outcomes as at 28 February 2023
Element
Base salary as at 28 February 2023
Pension (% of base salary)
Benefits (% of base salary)
Annual Bonus
LTIP (% of max)
David Forde Patrick McMahon
€434,700
€714,150
5%
7.5%
0%
65%
5%
7.5%
0%
65%
Corporate GovernanceBusiness & StrategyFinancial Statements
120
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 2023 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. The Committee will review the Policy and incentive
framework over the next year in advance of our intention to seek shareholder approval of an updated Remuneration Policy at the 2024
AGM in line with the usual three year timetable.
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.
None.
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.
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.
None.
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.
C&C Group plc Annual Report 2023 121
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Pension/cash allowance in lieu
Contributes towards
funding later life cost
of living.
Annual bonus
Motivates employees
and incentivises
delivery of annual
performance targets
which support the
strategic direction of
the Company.
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.
Bonus levels are determined after the
year end based on performance against
targets set by the Committee.
Maximum opportunity is 125%
of base salary.
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.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 122
Directors’ Remuneration Committee Report
(continued)
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 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.
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.
C&C Group plc Annual Report 2023 123
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Share-based rewards – all-employee plans
No performance conditions
would usually be required in
tax-advantaged 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 £1,500 per annum,
with an entitlement to matching
shares of £1,500 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).
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.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 124
Directors’ Remuneration Committee Report
(continued)
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 misstatement 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
David Forde
Contract date
2 November 2020
Patrick McMahon
8 July 2020
Notice period
12 months
12 months
Unexpired term of contract
n/a
n/a
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.
Not applicable.
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.
C&C Group plc Annual Report 2023 125
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Additional Fees
Provide compensation to Non-
Executive Directors taking on
additional responsibility
Shareholding Guidelines
Provide alignment of interest
between Non-Executive
Directors and shareholders
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.
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.
Not applicable.
Letters of appointment
Each of the Non-Executive Directors in office at 28 February 2023 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
Ralph Findlay
Vineet Bhalla
Jill Caseberry
Vincent Crowley
John Gibney
Helen Pitcher
Jim Thompson
Date of letter of appointment
16 September 2021 (Chair – 7 July 2022)
26 April 2021
7 February 2019
23 November 2015
26 October 2022
7 February 2019
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 126
Directors’ Remuneration Committee Report
(continued)
Annual Remuneration Report
Remuneration in detail for the Year ended 28 February 2023
Directors’ Remuneration (Audited)
The following table sets out the total remuneration for directors for the year ended 28 February 2023 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 2023 and the prior year.
Year ended February
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
Salary/fees
(a)
Taxable benefits
(b)
Annual bonus
(c)
Long term
incentives
(d)
Pension related
benefits
(e)
Total fixed
remuneration
Total variable
remuneration
Total
2022
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
Executive Directors
David Forde
Patrick McMahon
Andrea Pozzi1
Total
714
435
-
690
420
188
1,149 1,298
54
34
-
88
52
33
14
99
-
-
-
-
-
-
-
-
427
260
-
687
-
-
-
-
36
22
-
58
34
21
38
804
491
-
776
474
240
427
260
-
- 1,231
-
-
751
-
776
474
240
93 1,295 1,490
687
- 1,982 1,490
1. Figures for Andrea Pozzi are to 1 September 2021 (the date he left the Board). 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. The remuneration for Andrea Pozzi was translated from Sterling using the average
exchange rate for the relevant year.
Details on the valuation methodologies applied are set out in Notes (a) to (e) 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
As set out in the Chair’s letter, no bonuses will be paid to Executive Directors in respect of FY2023. The annual bonus for Executive Directors
was based on performance against Group Operating Profit (‘GOP’) (65%), Free Cash Flow Conversion (20%) and an ESG metric (15%).
Further details of the bonus outturn are provided in the table below.
Measure
GOP (65%)
Free Cash Flow Conversion (20%)
ESG metric (15%)*
‘Target’ (30% outturn)
‘Maximum’ (100% outturn)
Actual Performance
Bonuses outturn
Performance Targets
€113m
48%
7.1
€116.5m
55%
7.2
€84.1m
64.6%
7.4
No pay-out
No pay-out
No pay-out
*The target was to move from the Group’s previous engagement score of 6.8 in November 2021 to 7.2 in FY2023.
C&C Group plc Annual Report 2023 127
(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
2.
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.
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 Committee assessed the underlying financial performance across the three year performance period and having regard to the Group’s
balance sheet strength and robust cash generating capabilities and the strong revenue and operating profit performance concluded that it
was appropriate for the awards to vest based on the extent to which the targets for each year were achieved.
The performance conditions for FY2021 and FY2022 were set out in the Directors’ Remuneration Reports for those years. The performance
conditions for FY2023 were set in the year and are based on EPS. Details of the performance conditions and outturns for each year are set
out below.
LTIP Performance Conditions
Performance condition
FY2021 liquidity (Group’s cash on hand plus availability
from the Group’s RCF as at 28 February 2021)
Weighting
30%
Performance
target
% of element
vesting
Outturn
Vesting
Threshold
Maximum
FY2022 Net debt to EBITDA
Threshold
Maximum
FY2023 EPS
Threshold
Maximum
35%
35%
€250m
€300m
4.1x
3.8x
20c
23c
25%
100%
25%
100%
25%
100%
€314.6m
100%
(30% of total award)
3.4x
100%
(35% of total award)
13.3c
0%
(0% of total award)
Therefore the awards vested at 65% of the maximum. Although the vested awards will not be released to the Executive Directors until
the end of a two year holding period, in line with the UK Regulations their value is included in the single total figure of remuneration on the
following basis.
David Forde
Patrick McMahon
Share subject to
award1
387,772
236,035
Vested shares
252,052
153,423
Value of shares
in the single
total figure of
remuneration2
€427,480
€260,205
1. As adjusted in FY2022 for the rights issue, as disclosed in the FY2022 Directors’ Remuneration Report
2. Based on a share price at vesting of £1.487 (representing the average closing price between 24 February 2023 and 28 February 2023 (converted to €1.696 using an FX rate of
0.87701). The share price used to determine the value of the shares in the single total figure table is less than the share price at grant and, accordingly, no amount of the award is
attributable to share price appreciation.
(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.
Corporate GovernanceBusiness & StrategyFinancial Statements 128
Directors’ Remuneration Committee Report
(continued)
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 FY2023.
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.
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 2023 in the share
capital of the Company are detailed below:
Directors
David Forde
Patrick McMahon
Total
28 February 2023
Total
1 March 2022
Total
48,092
94,728
48,092
87,939
142,820
136,031
The Executive Directors’ progress towards satisfying the shareholding requirements is shown in the table below:
Director
David Forde
Patrick McMahon
Shareholding
48,092
94,728
Target value
€1,380,000
€840,000
Value as at 28 February 2023*
€81,756
€161,038
* The value is based on the number of shares multiplied by the closing share price on 28 February 2023, converted into Euro using a FX rate of 0.87701, being £1.49 (€1.70).
Company Secretary
Mark Chilton
28 February 2023
Total
1 March 2022
Total
22,693
22,693
Between 28 February 2023 and 16 May 2023, being the latest practicable date, Patrick McMahon acquired 500 shares under the Irish
APSS. There were no other changes in the above Directors’ or the Company Secretary’s interests between these dates. No Executive
Director participates in the UK SIP.
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.
C&C Group plc Annual Report 2023 129
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 2023. Awards granted under
the LTIP are subject to performance conditions as set out on page 118 measured over a performance period ending at the end of February
2025.
Executive Director
David Forde
Type of award
LTIP
Patrick McMahon
LTIP
Maximum opportunity
150% of base salary
150% of base salary
Number of shares
458,023
278,796
Face value
(at date of grant in Euros)2
1,071,224
% of maximum opportunity
vesting at threshold
25%
652,048
25%
1. The LTIP awards were granted on 9 June 2022 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 mid-market closing share price on 8 June 2022 (being the day before the date of
grant) converted into Euro, being £2.00 (converted into €2.3388 using an exchange rate of £1: €1.1694).
Directors’ Interests in Options (Audited)
Interests in options over ordinary shares of €0.01 each in the Company
Directors
David Forde
Date of
grant
3/11/20
Exercise
price
€0.00
Plan
Buy-out 11 3/11/22-3/11/30
Exercise period
Total at
1 March 2022
(or date of
appointment if later)
449,627
Awarded
in year
-
Exercised
in year
-
Lapsed in
year
-
3/11/20
€0.00
Buy-out 21 3/11/23-3/11/30
449,627
-
2/12/20
€0.00
15/06/21 €0.00
09/06/22 €0.00
Patrick McMahon 2/12/20
€0.00
15/06/21 €0.00
09/06/22 €0.00
Mark Chilton
16/06/21 €0.00
09/06/22 €0.00
LTIP
LTIP
LTIP
LTIP
LTIP
LTIP
R&R
R&R
2/12/23 – 2/12/30
387,772
15/06/24 – 15/06/31 377,953
09/06/25 – 09/06/30 -
Total
1,664,979
-
-
-
458,023
458,023
2/12/23 – 2/12/30
236,035
15/06/24 – 15/06/31 230,058
-
-
09/06/25 – 09/06/32 -
Total
466,093
278,796
278,796
16/06/22 – 16/06/28 48,894
-
09/06/25 – 09/06/32 -
Total
48,894
50,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
Total at
28 February
2023
449,627
449,627
(135,720) 2 252,052
-
-
377,953
458,023
(135,720) 1,987,282
(82,612) 2
153,423
-
-
230,058
278,796
(82,612)
662,277
-
-
-
48,894
50,000
98,894
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 FY2021 awards partially lapsed during the 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 2023 was £1.49 (28 February 2022: £2.11). The price of the Company’s ordinary shares ranged between
£1.44 and £2.16 during the year.
There was no movement in the interests of the Directors in options over the Company ordinary shares between 28 February 2023 and 24
May 2023.
Corporate GovernanceBusiness & StrategyFinancial Statements
130
Directors’ Remuneration Committee Report
(continued)
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 2023 and the prior year.
Year ended February
Non-Executive Directors
Vineet Bhalla
Jill Caseberry
Jim Clerkin1
Vincent Crowley2
Emer Finnan2 3
Stewart Gilliland4
Helen Pitcher
Jim Thompson
Ralph Findlay5
John Gibney6
Total
Salary/fees
2023
€’000
76
80
-
93
98
81
100
95
187
26
2022
€’000
54
75
46
121
126
230
93
90
-
-
836 835
1. Jim Clerkin left the Board on 27 October 2021.
2. 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 during FY2022.
3. Emer Finnan left the Board on 8 February 2023.
4. Stewart Gilliland left the Board on 7 July 2022.
5. The fees paid to Ralph Findlay for the year ended 28 February 2023 reflect his position as a Non-Executive Director between 1 March 2022 and 7 July 2022, and his position as
Non-Executive Chair for the remainder of the year.
6. John Gibney was appointed to the Board on 26 October 2022, the figures reflect his remuneration for the year from appointment.
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
Non-Executive Chair
Base fee
Senior Independent Director
Audit Committee Chair
Remuneration Committee Chair
ESG Committee Chair
Audit Committee member
ESG Committee member
Remuneration Committee member
Nomination Committee member
Stakeholder engagement - one segment of business
Stakeholder engagement - two segments of business
Fees
€
250,000
67,015
15,000
25,000
20,000
20,000
5,000
5,000
5,000
3,000
3,000
5,000
C&C Group plc Annual Report 2023
131
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 three 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 2023 in the share capital of the
Company are detailed below:
Directors
Vineet Bhalla
Jill Caseberry
Vincent Crowley
Ralph Findlay1
Emer Finnan
Stewart Gilliland
Helen Pitcher
Jim Thompson
John Gibney
Total
28 February 2023
(or date of retirement
from the board if
earlier)
Total
1 March 2022
(or date of appointment
if later)
Total
10,000
6,304
25,216
47,100
10,028
166,089
8,015
157,780
-
10,000
6,304
25,216
21,668
10,028
166,089
8,015
157,780
-
430,532
405,100
1. Ralph Findlay was appointed to the Board as Non-Executive Director on 1 March 2022.
There were no changes in the above Non-Executive Directors’ share interests between 28 February 2023 and 24 May 2023.
Performance graph and table
This graph shows the value, at 28 February 2023, of £100 invested in the Company on 28 February 2013 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).
Total shareholder return
250
200
150
100
50
Feb 2013
Feb 2014
Feb 2015
Feb 2016
Feb 2017
Feb 2018
Feb 2019
Feb 2020
Feb 2021
Feb 2022
Feb 2023
C&C Group
FTSE 250 Index
Corporate GovernanceBusiness & StrategyFinancial Statements 132
Directors’ Remuneration Committee Report
(continued)
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:
FY2014
Stephen Glancey
FY2015
Stephen Glancey
FY2016
Stephen Glancey
FY2017
Stephen Glancey
FY2018
Stephen Glancey
FY2019 Stephen Glancey
FY2020 Stephen Glancey (to 15/01/20)
FY2020 Stewart Gilliland (from 16/01/20)
FY2021
Stewart Gilliland (to 02/11/20)
FY2021 David Forde (from 02/11/20)
FY2022 David Forde
FY2023 David Forde
Total Remuneration
€’000
1,152
980
1,230
1,052
994
1,777
2,219
71
301
1,731
776
1,231
Annual Bonus
(as % of maximum
opportunity)
18.75%
Nil
25%
Nil
18%
100%
25%
N/A
N/A
Nil
Nil
Nil
Long term incentives
vesting
(as % of maximum
number of shares)
7%
Nil
Nil
Nil
Nil
Nil
100%
N/A
N/A
Nil
Nil
65%
The amounts set out in the above table were translated from Sterling based on the average exchange rate for the relevant year.
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 FY2021, FY2022 and FY2023. 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 FY2023. In calculating the ratio, the Company determined full time equivalent annual remuneration for UK employees, employed in
the business as at 28 February 2023. 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
2020
2021
2022
2023
CEO total remuneration
(salary) €
25th percentile employee
remuneration
(salary) €
Median employee remuneration
(salary) €
75th percentile employee
remuneration
(salary) €
2,218,941
697,964
2,031,946
531,161
776,250
690,000
1,230,899
714,150
26,146
24,080
23,465
22,146
26,759
25,281
28,957
27,450
32,257
30,024
29,667
27,894
34,125
31,511
35,795
33,661
45,075
39,232
42,290
38,358
45,338
41,613
47,986
44,183
C&C Group plc Annual Report 2023 133
Salary Only Ratios
Year
2020
2021
2022
2023
Method
Option A
Option A
Option A
Option A
25th percentile ratio
Median ratio
75th percentile ratio
29.0:1
24.0:1
27.3:1
26.0:1
23.2:1
19.0:1
21.9:1
21.2:1
17.8:1
13.8:1
16.6:1
16.2:1
Total Remuneration Ratios
Year
2020
2021
2022
2023
Method
Option A
Option A
Option A
Option A
25th percentile ratio
Median ratio
75th percentile ratio
84.9:1
86.6:1
29.0:1
42.5:1
68.8:1
68.5:1
22.7:1
34.4:1
49.2:1
48.0:1
17.1:1
25.7:1
The Company believes that the median pay ratio for FY2023 is consistent with the pay, reward and progression policies for the UK
employees. The change in the ratios between FY2022 and FY2023 is attributable to 83% of employees receiving an increase in pay of
5.4%.
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 FY2022 and
FY2023 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. Ralph Findlay and John Gibney were
appointed to the Board during FY2023 and, accordingly, have been excluded from the table below. Stewart Gilliland and Emer Finnan left
the Board during FY2023 and, accordingly, have been excluded from the table below.
Salary/Fees
Annual
Bonus
FY2020 –
FY2021
FY2021 –
FY2022
FY2022 –
FY2023
FY2020 –
FY2021
FY2021 –
FY2022
FY2022 –
FY2023
Average
Employee
(4.2%)
David
Forde
N/A
Patrick
McMahon
N/A
Jill
Caseberry
(7.2%)
Vincent
Crowley3
(7.0%)
Helen
Pitcher
(3.5%)
Jim
Thompson
2.9%
1.6%
0.0%
0.0%
21.9%
54.4%
22.0%
31.0%
7.4%
3.5%
3.5%
6.7%
(23.1%)
7.5%
5.6%
N/A
0.6%
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1. As reported last year, Executive Directors’ salaries increased by 3.5% in line with the workforce and Non-Executive base fees increased by 3.1% in FY2023.
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.
3. An additional fee of €32,500 was paid to Vincent Crowley 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. This was not paid in FY2023.
Corporate GovernanceBusiness & StrategyFinancial Statements 134
Directors’ Remuneration Committee Report
(continued)
Implementation of the Remuneration Policy in FY2024
Based on the continuation of the existing approach, the Committee intends to take the following approach to the implementation of the
Policy for FY2024:
Salary
Cognisant of the impact of the cost of living, 83% of the workforce will receive an increase of 5.4%, with the lowest paid receiving an
increase of 7.0%. Executive salaries will increase by 1.2%. This is below the average percentage increase awarded to our workforce.
Annual Bonus
As noted in the Chair’s statement, the Executive Directors’ annual bonus opportunity for FY2024 will be 125% of salary, with 50% of any
bonus earned paid in cash and 50% deferred into shares for three years. The performance conditions will be based on a mix of financial
and non-financial measures, with 75% of the overall opportunity based on financial measures (split between operating profit (50%) and cash
(25%)) and the remainder on non-financial measures (with a 15% weighting given to strategic goals and a 10% weighting given to an ESG
measure based on workforce engagement).
Long-Term Incentives
The current intention is that the LTIP will be made in late May / early June 2023.
As noted in the Chair’s letter on page 116, for FY2024, it is proposed that the Free Cash Flow metric will be removed from the LTIP and
replaced with a relative TSR metric.
Details of the anticipated targets are set out below.
Measure
EPS
Weighting
45%
Relative TSR
35%
Environmental
20%
Targets
Threshold (25% vesting): 15.2c
Maximum: 16.0c
Threshold (25% vesting): The Company’s TSR performance over the performance
period1 is at the median of the comparator group2
Maximum: The Company’s TSR performance over the performance period1 is at the
upper quartile of the comparator group2
To give impetus to C&C's de-carbonisation efforts, the Company has set a target to
reduce its Scope 1 and Scope 2 emissions over the next three financial years ending
FY2026.
Threshold - 6% reduction
Maximum - 12% reduction
1. The performance period for the relative TSR measure will be the three financial years FY2024, FY2025 and FY2026, with TSR performance assessed by reference to a three
month average TSR measurement before the start of the performance period and at the end of the performance period.
2. The comparator group for the relative TSR measure will be Domino’s Pizza Group, JD Wetherspoon, Mitchells & Butlers, SSP, Fullers, Gym Group, Hollywood Bowl, Marston’s,
Restaurant Group, Ten Entertainment Group, Britvic, Cranswick, Hilton Food Group, Premier Foods, Tate & Lyle, AG Barr, Bakkavor, Devro, Greencore and FeverTree.
Non-Executive Directors
Following a review, the Board has agreed that non-executive base fees will remain unchanged in FY2024.
Chair Fee
Ralph Findlay succeeded Stewart Gilliland as Chair following the 2022 AGM. On his appointment as Chair, Ralph’s fee was set at €250,000.
This will remain unchanged for FY2024.
C&C Group plc Annual Report 2023 135
Shareholder Voting on the Directors’ Remuneration Report and Directors’ Remuneration Policy
The following table sets out the votes at the 2022 AGM in respect of the Report and at the 2021 AGM the Policy.
Directors’ Remuneration Report
AGM
2022
For
315,970,596
Against
185,112
Directors’ Remuneration Policy
AGM
2021
For
273,330,524
Against
14,729,936
Withheld
3,705
Withheld
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.
This report was approved by the Board and signed on its behalf by
Helen Pitcher OBE
Remuneration Committee Chair
24 May 2023
Corporate GovernanceBusiness & StrategyFinancial 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 2023 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
Patrick McMahon Ralph Findlay
Group Chief
Executive Chair
Executive Officer
and Group Financial
Officer
24 May 2023
136
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 Group Chief Financial
Officer, 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,
C&C Group plc Annual Report 2023 Independent Auditor’s Report
to the Members of C&C Group Plc
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 2023, 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 2023;
• 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 232.
The financial reporting framework that has been applied in their
preparation is Irish Law and International Financial Reporting
Standards (IFRS) as adopted by the European Union and, 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 2023 and 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 2023;
• the Group financial statements have been properly prepared in
accordance with IFRS as adopted by the European Union;
• the Company financial statements have been properly prepared
in accordance with FRS 101 Reduced Disclosure Framework;
and
• 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
137
Standard issued by the Irish Auditing and Accounting Supervisory
Authority (IAASA) as applied to listed entities, and we have
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:
• Confirming our understanding of management’s going concern
assessment process and also engaging with management early
to ensure all key factors were considered in their assessment;
• Considering whether events or conditions existed that may cast
doubt on the entity’s ability to continue as a going concern for a
period to 31 August 2024;
• Obtaining management’s board-approved going concern
assessment, including the cash forecasts and covenant
calculations for the going concern period, which covered a period
to 31 August 2024;
• Considering the consistency of information obtained from other
areas of the audit such as the forecasts used for impairment
assessments;
• Considering past historical accuracy of management’s forecasts;
• Considering the appropriateness of the methods used to
calculate the cash forecasts and covenant calculations and
determining through inspection and testing of the methodology
and calculations that the methods utilised were appropriately
sophisticated to be able to make an assessment for the Group;
• Considering the mitigating factors included in the cash forecasts
and covenant calculations that are within the control of the
Group. This included our review of the Group’s non-operating
cash outflows and evaluating the Group’s ability to control these
outflows as mitigating actions if required. We also verified the
credit facilities available to the Group;
• Performing reverse stress testing in order to identify what factors
would lead to the Group breaching financial covenants during the
going concern period; and
• Reviewing the Group’s going concern disclosures included
in the annual report in order to assess if the disclosures were
appropriate and in conformity with the reporting standards.
Corporate GovernanceBusiness & StrategyFinancial Statements 138
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
Our key observations
We have observed that the Group has adapted to a high-inflation
environment, generating operating cash flows of €86.0 million in the
year ended 28 February 2023. Further, the Group continues to have
access to significant liquidity. At 28 February 2023, the Group has
unrestricted cash and cash equivalents of €115.3 million and unused
committed debt facilities of up to €355 million from a revolving bank
credit facility expiring in July 2024. We note that the Group has
negotiated a refinancing of the Group’s current multi-currency facility
agreement. Following the publication of the Group’s FY2023 results,
the Group will enter into a new five-year committed sustainability-
linked facility comprised of a €250 million multi-currency revolving
loan facility and a €100 million non-amortising Euro term loan, both
with maturity in FY2028.
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
or the Company’s ability to continue as a going concern for a period
to 31 August 2024.
Overview of our audit approach
Audit
scope
• We performed an audit of the complete financial
information of 13 components and performed
audit procedures on specific balances for a
further 2 components.
• We performed specified procedures at a further
6 components that were determined by the
Group audit team in response to specific risk
factors. We also performed review procedures
at a further 1 component.
• The components where we performed either
full or specific audit procedures accounted for
91.5% of the Group’s Profit before tax, 99.6%
of the Group’s Net revenue and 97.3% of the
Group’s Total assets.
• Components represent business units across
the Group considered for audit scoping
purposes.
Key audit
matters
• Recoverability of on-trade receivable balances
and advances to customers.
• Carrying value of goodwill and intangible brand
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.
Materiality
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
ability to continue as a going concern.
assets.
• Revenue recognition.
• Overall Group materiality was assessed to be
€3.34 million which represents approximately
5% of the Group’s profit before tax before
non-recurring exceptional items. In our prior
year audit, we adopted a materiality of €3.85
million which represented 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.
What has
changed?
• In the prior year, our auditor’s report included
key audit matters in relation to the Assessment
of the valuation of Property, Plant and
Equipment (PP&E).
C&C Group plc Annual Report 2023 139
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
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.
Recoverability of on-trade receivable
balances and advances to customers
(Trade receivables 2023: €125.6m, 2022:
€147.5m, advances to customers 2023:
€41.9m, 2022: €43.0m)
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.
The Group has a risk through exposure
to on-trade receivable balances and
advances to customers who may
experience financial difficulty given the
current economic climate.
Refer to the Audit Committee Report (page
102); Accounting policies (page 166); and
Note 15 of the consolidated Financial
Statements (pages 197 to 199).
We have reviewed the model used by
management in calculating the expected
credit losses to ensure that it is compliant
with IFRS 9 ‘Financial Instruments’ and
adequately captures the additional risks in
the current environment. We have tested 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) for compliance with IFRS 9.
The above procedures were performed by
the local audit teams.
Corporate GovernanceBusiness & StrategyFinancial Statements 140
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
Risk
Our response to the risk
Key observations communicated to the Audit Committee
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 EBIT growth rate
contained in the financial projections for
year one (which are then projected out
for years two, three, four and five) when
viewed against the prior year and current
year actual growth;
• the results of our sensitivity analysis; and
• all disclosures are appropriate to the
requirements of IAS 36.
Carrying value of goodwill & intangible
brand assets (2023: €645.5m, 2022:
€656.5m)
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 (page 160); and Note 12 of the
Consolidated Financial Statements (pages
190 to 194).
We have evaluated the process and key
controls, designed and implemented by
management, related to the impairment
assessment of goodwill & intangible brand
assets.
Valuation 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.
C&C Group plc Annual Report 2023 141
Risk
Our response to the risk
Key observations communicated to the Audit Committee
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.
Revenue recognition (2023: €1,689.0m,
2022: €1,438.1m)
The Group generates revenue from a
variety of geographies and across a
large number of separate legal entities
spread across the Group’s two reporting
segments.
The Group’s revenue particularly on supply,
complex and non-standard customer
contracts 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 production
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 163); and note 1 of the Consolidated
Financial- Statements (pages 170 to 173).
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 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 from Contracts with
Customers’;
• 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; and
• We performed journal entry testing and
verification of proper cut-off at yearend.
The above procedures were performed by
the local audit teams.
Corporate GovernanceBusiness & StrategyFinancial Statements 142
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
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.
Reporting threshold
An amount below which identified misstatements are considered as
being clearly trivial.
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 to be €3.34 million, which
is approximately 5% of the Group’s profit before tax before non-
recurring exceptional items (2022: €3.85 million which represented
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 believe that profit before tax before non-
recurring exceptional items 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 metric to the
stakeholders of the Group.
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% (2022: 50%) of our planning
materiality, namely €1.67 million (2022: €1.93 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.
Audit work at component locations for the purpose of obtaining
audit coverage over significant financial statement accounts is
undertaken based on a percentage of total performance materiality.
The performance materiality set for each component is based
on the relative scale and risk of the component to the Group
as a whole and our assessment of the risk of misstatement at
that component. In the current year, the range of performance
materiality allocated to components was €0.30 million to €1.13
million (2022: €0.39 million to €0.96 million).
We agreed with the Audit Committee that we would report to them
all uncorrected audit differences in excess of €0.167 million (2022:
€0.193 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 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
(2022: 15) components covering entities across Ireland, UK and the
US which represent the principal business units within the Group.
Of the 15 (2022: 15) components selected, we performed an audit
of the complete financial information of 13 (2022: 12) components
(“full scope components”) which were selected based on their size
or risk characteristics. For the remaining 2 (2022: 3) 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 (2022: 15) components discussed above, we
selected a further 6 (2022: 7) 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 99.1% (2022: 99.6%) of the Group’s Profit before tax,
99.6% (2022: 99.6%) of the Group’s Net revenue and 98.9% (2022:
95.9%) of the Group’s Total assets.
C&C Group plc Annual Report 2023 Group’s Profit before tax
Group’s Net Revenue
Group’s Total Assets
91.2% Full scope
components
0.3%
7.6%
Specific scope
components
Specified
procedures
0.9%
Other
procedures
99.6% Full scope
components
143
0.0%
0.0%
0.4%
Specific scope
components
Specified
procedures
Other
procedures
97.3% Full scope
components
0.0%
1.6%
1.1%
Specific scope
components
Specified
procedures
Other
procedures
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. The Group audit team have completed
a programme of planned visits designed to ensure that senior
members of the Group audit team, including the Audit Engagement
Partner, visit a number of locations. During the current year’s
audit cycle, visits were undertaken by the primary audit team to
component teams as follows: Matthew Clark & Bibendum (MCB)
in Bristol, Tennent’s in Glasgow and Bulmers in Clonmel, Ireland.
These visits involved discussing the audit approach and any issues
arising with the component team and holding discussions with local
management and attending closing meetings. The Group audit team
performed file reviews for MCB, Tennent’s and Bulmers.
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.
For the current year, the full scope components contributed 91.2%
(2022: 91.8%) of the Group’s Profit before tax, 99.6% (2022: 99.6%)
of the Group’s Net revenue and 97.3% (2022: 95.8%) of the Group’s
Total assets. The specific scope component contributed 0.3%
(2022: 2.5%) of the Group’s Profit before tax, 0.0% (2022: 0.0%) of
the Group’s Net revenue and 0.0% (2022: 0.0%) 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 7.6% (2022: 5.3%) of the Group’s
Profit before tax, 0.0% (2022: 0.0%) of the Group’s Net revenue and
1.6% (2022: 0.1%) 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 0.9%
(2022: 0.4%) of the Group’s Profit before tax, none are individually
greater than 5% (2022: 5%) of the Group’s Profit 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.
Group’s Profit before tax
Group’s Net Revenue
Group’s Total Assets
91.2% Full scope
components
0.3%
7.6%
0.9%
Specific scope
components
Specified
procedures
Other
procedures
99.6% Full scope
components
0.0%
0.0%
0.4%
Specific scope
components
Specified
procedures
Other
procedures
97.3% Full scope
components
0.0%
1.6%
Specific scope
components
Specified
procedures
1.1%
Other
procedures
Corporate GovernanceBusiness & StrategyFinancial Statements 144
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
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 32 to 38)
that describe the principal risks and explain how they are being
managed or mitigated;
• the directors’ confirmation (set out on page 32) 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 page 38) 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 38 to 39) in the annual
report as to how they have assessed the prospects of the Group
and the 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 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.
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
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 as 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 102) – 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 104) – 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 90)– 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.
C&C Group plc Annual Report 2023 145
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 applicable legal
requirements.
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 Group and 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 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
2022.
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 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 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 Company
or to cease operations, or has no realistic alternative but to do so.
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.
Explanation to what extent the audit was considered capable
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud, that could reasonably be expected to have a material
effect on the financial statements. The risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. In addition, the further
removed any non-compliance is from the events and transactions
reflected in the financial statements, the less likely it is that our
procedures will identify such non-compliance. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below. However, the primary responsibility for the
prevention and detection of fraud rests with both those charged
with governance of the company and management.
Corporate GovernanceBusiness & StrategyFinancial Statements 146
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
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.
Dermot Quinn
for and on behalf of
Ernst & Young
Chartered Accountants and Statutory Audit Firm
Dublin
24 May 2023
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
with 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.
C&C Group plc Annual Report 2023 147
Total
€m
1,796.1
(358.0)
1,438.1
(1,379.6)
58.5
4.5
0.2
(22.8)
5.3
45.7
(8.6)
Consolidated Income Statement
For the financial year ended 28 February 2023
Before exceptional
items
Year ended 28 February 2023
Exceptional items
(note 5)
Notes
€m
€m
Before exceptional
items
Year ended 28 February 2022
Exceptional items
(note 5)
2,060.7
(371.7)
1,689.0
(1,604.9)
84.1
-
-
-
-
-
(0.2)
(0.2)
1.1
0.2
Total
€m
2,060.7
€m
1,796.1
(371.7)
(358.0)
1,689.0
1,438.1
(1,605.1)
(1,390.2)
83.9
1.1
0.2
47.9
-
-
(17.3)
(2.0)
(19.3)
(16.1)
-
66.8
(14.2)
-
(0.9)
0.2
-
65.9
(14.0)
2.6
34.4
(6.2)
€m
-
-
-
10.6
10.6
4.5
0.2
(6.7)
2.7
11.3
(2.4)
52.6
(0.7)
51.9
28.2
8.9
37.1
13.3
13.2
9.9
9.9
Revenue
Excise duties
Net revenue
Operating costs
Group operating profit
Profit on disposal
Finance income
Finance expense
Share of equity accounted
investments’ profit after tax
Profit before tax
Income tax expense
Group profit for the
financial year
Basic earnings per share (cent)
Diluted earnings per share (cent)
1
1
2
1
5
6
6
13
7
9
9
All of the results are related to continuing operations.
Corporate GovernanceBusiness & StrategyFinancial Statements
148
Consolidated Statement of Comprehensive Income
For the financial year ended 28 February 2023
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
Foreign currency recycled on disposal of asset held for sale
Foreign currency recycled on disposal of subsidiary
Gain/(loss) relating to cash flow hedges
Items that will not be reclassified to Income Statement in subsequent years:
Revaluation of property, plant & equipment
Deferred tax on revaluation of property, plant and equipment
Actuarial gain on retirement benefits
Deferred tax charge on actuarial gain on retirement benefits
Share of equity accounted investments’ Other Comprehensive Income
Notes
6
6
6
24
11
22
23
22
13
2023
€m
(19.8)
0.4
-
1.2
(0.7)
0.3
4.3
0.1
-
2022
€m
11.9
-
(0.2)
(0.1)
2.5
(0.6)
32.8
(4.3)
2.2
Net (loss)/gain recognised directly within Other Comprehensive Income
(14.2)
44.2
Group profit for the financial year
Total comprehensive income for the financial year
51.9
37.7
37.1
81.3
C&C Group plc Annual Report 2023
149
2022
€m
214.0
656.5
1.3
37.6
27.0
4.3
43.0
983.7
168.2
186.3
-
64.7
419.2
65.8
485.0
2023
€m
210.3
645.5
1.3
42.2
25.0
5.6
38.0
967.9
174.9
164.1
0.7
115.3
455.0
-
455.0
1,422.9
1,468.7
4.0
347.2
(34.1)
80.3
341.8
739.2
57.1
100.0
4.9
34.2
196.2
16.7
-
370.7
94.2
5.4
0.5
487.5
683.7
4.0
347.2
(36.0)
98.3
285.5
699.0
59.8
219.4
3.9
30.2
313.3
20.2
0.1
386.1
36.6
8.2
5.2
456.4
769.7
1,422.9
1,468.7
Notes
11
12
13
23
22
10, 24
15
14
15
16
25
25
25
25
19
20
18
22
19
24
17
20
18
Consolidated Balance Sheet
As at 28 February 2023
ASSETS
Non-current assets
Property, plant & equipment
Goodwill & intangible assets
Equity accounted investments/financial assets
Retirement benefits
Deferred tax assets
Derivative financial assets
Trade & other receivables
Current assets
Inventories
Trade & other receivables
Current income tax assets
Cash
Assets held for sale
TOTAL ASSETS
EQUITY
Capital and reserves
Equity share capital
Share premium
Treasury shares
Other reserves
Retained income
Total Equity
LIABILITIES
Non-current liabilities
Lease liabilities
Interest bearing loans & borrowings
Provisions
Deferred tax liabilities
Current liabilities
Lease liabilities
Derivative financial liabilities
Trade & other payables
Interest bearing loans & borrowings
Provisions
Current income tax liabilities
Total liabilities
TOTAL EQUITY & LIABILITIES
On behalf of the Board
R Findlay
Executive Chair
P McMahon
DATE
Chief Executive Officer
24 May 2023
Corporate GovernanceBusiness & StrategyFinancial Statements
150
Consolidated Cash Flow Statement
For the financial year ended 28 February 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Group profit for the year
Finance income
Finance expense
Income tax expense
Profit on share of equity accounted investments
Impairment of intangible asset
Impairment of equity accounted investments
Revaluation of property, plant & equipment
Depreciation of property, plant & equipment
Amortisation of intangible assets
Profit on disposal
Net profit on disposal of property, plant & equipment
Rights Issue costs recorded as exceptional
Charge for equity settled share-based payments
Pension contributions: adjustment from (credit)/charge to payment
Increase in inventories
Decrease/(increase) in trade & other receivables
(Decrease)/increase in trade & other payables
Decrease in provisions
Interest and similar costs paid
Income taxes paid
Net cash inflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment
Purchase of intangible assets
Net proceeds on disposal of property, plant & equipment
Sale of asset held for sale
Sale of business – net of cash disposed
Cash outflow re acquisition of equity accounted investments/financial assets
Net cash inflow/(outflow) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options/equity interests
Proceeds from Rights Issue
Drawdown of debt
Repayment of debt
Payment of lease liabilities
Payment of Rights Issue costs
Net cash outflow from financing activities
Net increase/(decrease) in cash
Reconciliation of opening to closing cash
Cash at beginning of year
Translation adjustment
Net increase/(decrease) in cash
Cash at end of financial year
A reconciliation of cash to net debt is presented in note 21 to the financial statements.
Notes
6
6
7
13
12
5, 13
5
2, 11, 19
2, 12
5
5
4
23
11
12
16
5, 10
13
5
21
21
19
5
2023
€m
51.9
(0.2)
19.3
14.0
-
-
-
-
30.0
2.5
(1.1)
-
0.7
2.5
(0.6)
119.0
(12.2)
18.5
(6.6)
(1.3)
117.4
(19.4)
(12.0)
86.0
(10.1)
(5.1)
-
63.6
0.7
-
49.1
-
-
48.5
(108.5)
(22.5)
(0.7)
(83.2)
51.9
64.7
(1.3)
51.9
115.3
2022
€m
37.1
(0.2)
22.8
8.6
(5.3)
0.6
6.4
(0.6)
29.2
2.6
(4.5)
(1.6)
2.6
1.5
0.3
99.5
(43.6)
(84.0)
89.6
(0.9)
60.6
(24.4)
(3.2)
33.0
(14.9)
(2.2)
2.3
-
12.9
(0.3)
(2.2)
0.7
176.3
49.5
(271.7)
(21.9)
(9.2)
(76.3)
(45.5)
107.7
2.5
(45.5)
64.7
C&C Group plc Annual Report 2023
151
Total
€m
446.1
37.1
Consolidated Statement of Changes in Equity
For the financial year ended 28 February 2023
Other
capital
reserves*
Cash flow
hedge
reserve
Share-
based
payments
reserve
Currency
translation
reserve
Revaluation
reserve
Treasury
shares
Retained
income
At 28 February 2021
Profit for the financial year
Other comprehensive income/
(expense)
Total comprehensive income/
(expense)
Ordinary Share Capital Issued
(note 25)
Share issue costs (note 5)
Exercised share options (note 25)
Reclassification of share-based
payments reserve
Sale of treasury shares/purchase
of shares to satisfy employee share
entitlements (note 25)
Equity settled share-based
payments (note 4)
Equity
share
capital
€m
3.2
Share
premium
€m
171.3
-
-
-
-
-
-
0.8
175.5
-
-
-
-
-
-
0.4
-
-
-
Total transactions with owners
0.8
175.9
€m
25.8
-
-
-
-
-
-
-
-
-
-
At 28 February 2022
Profit for the financial year
Other comprehensive income/
(expense)
Total comprehensive income/
(expense)
Reclassification of share-based
payments reserve
Sale of treasury shares/purchase
of shares to satisfy employee share
entitlements (note 25)
Equity settled share-based
payments (note 4)
Total transactions with owners
4.0
347.2
25.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
€m
-
-
(0.1)
(0.1)
-
-
-
-
-
-
-
(0.1)
-
1.2
1.2
-
-
-
-
€m
3.3
-
-
-
-
-
-
(0.4)
-
1.5
1.1
€m
41.6
-
11.7
11.7
-
-
-
-
-
-
-
€m
12.4
-
2.5
2.5
-
-
-
-
-
-
-
€m
(36.5)
-
-
-
-
-
-
-
0.5
-
0.5
€m
225.0
37.1
30.1
44.2
67.2
81.3
-
176.3
(6.6)
-
0.4
(0.5)
(6.6)
0.4
-
-
-
1.5
(6.7)
171.6
4.4
53.3
14.9
(36.0)
285.5
699.0
-
-
-
(1.6)
-
2.5
0.9
5.3
-
-
(19.4)
(0.7)
(19.4)
(0.7)
-
-
-
-
-
-
-
-
-
-
-
-
1.9
-
1.9
51.9
51.9
4.7
(14.2)
56.6
37.7
1.6
(1.9)
-
(0.3)
-
-
2.5
2.5
33.9
14.2
(34.1)
341.8
739.2
At 28 February 2023
4.0
347.2
25.8
1.1
*Other capital reserves include Other undenominated reserve of €0.9m and the capital reserve of €24.9m
Corporate GovernanceBusiness & StrategyFinancial Statements 152
Company Balance Sheet
As at 28 February 2023
ASSETS
Non-current assets
Financial assets
Current assets
Trade & other receivables
Cash
TOTAL ASSETS
EQUITY
Equity share capital
Share premium
Other reserves
Retained income
Total equity
LIABILITIES
Non-current liabilities
Interest bearing loans & borrowings
Current liabilities
Interest bearing loans & borrowings
Trade & other payables
Total liabilities
TOTAL EQUITY & LIABILITIES
Notes
2023
€m
2022
€m
13
15
25
25
25
20
20
17
1,158.6
1,158.6
1,158.2
1,158.2
285.1
0.2
285.3
114.7
0.1
114.8
1,443.9
1,273.0
4.0
4.0
1,048.2
1,048.2
5.1
231.8
4.2
21.5
1,289.1
1,077.9
100.0
100.0
(0.8)
55.6
54.8
143.4
143.4
(0.9)
52.6
51.7
154.8
195.1
1,443.9
1,273.0
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 profit for the financial year is
€208.7m (FY2022: loss of €17.0m). In the current financial year, there were dividends received of €219.9m from subsidiaries (FY2022: €nil).
On behalf of the Board
R Findlay
Executive Chair
P McMahon
DATE
Chief Executive Officer
24 May 2023
C&C Group plc Annual Report 2023
153
Total
€m
Company Statement of Changes in Equity
For the financial year ended 28 February 2023
Company
At 28 February 2021
Loss for the financial year
Total comprehensive expense
Equity share
capital
€m
3.2
-
-
Share premium
€m
872.3
-
-
Ordinary Share Capital Issued (note 25)
0.8
175.5
Share issue costs (note 5)
Exercised share options (note 25)
Reclassification of share-based payments reserve
Equity settled share-based payments (note 4)
Total transactions with owners
At 28 February 2022
Profit for the financial year
Total comprehensive expense
Reclassification of share-based payments reserve
Equity settled share-based payments (note 4)
Total transaction with owners
At 28 February 2023
Other
undenominated
reserve
Share-based
payments
reserve Retained income
€m
€m
0.9
-
-
-
-
-
-
-
-
0.9
-
-
-
-
-
-
-
-
-
0.8
4.0
-
-
-
-
-
-
0.4
-
-
175.9
1,048.2
-
-
-
-
-
4.0
1,048.2
0.9
€m
2.2
-
-
-
-
-
(0.4)
1.5
1.1
3.3
-
-
(1.6)
2.5
0.9
4.2
44.7
923.3
(17.0)
(17.0)
-
(6.6)
-
0.4
-
(6.2)
21.5
(17.0)
(17.0)
176.3
(6.6)
0.4
-
1.5
171.6
1,077.9
208.7
208.7
208.7
208.7
1.6
-
1.6
-
2.5
2.5
231.8
1,289.1
Corporate GovernanceBusiness & StrategyFinancial Statements 154
Statement of Accounting Policies
For the year ended 28 February 2023
Significant accounting policies
C&C Group plc (the ‘Company’) is a company incorporated and
tax resident in Ireland. The Group’s financial statements for the
year ended 28 February 2023 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 2023.
The Company and Group financial statements, together the
‘financial statements’, were authorised for issue by the Directors on
24 May 2023.
The accounting policies applied in the preparation of the financial
statements for the year ended 28 February 2023 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.
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
2023. 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 2023:
Reference to the Conceptual Framework – Amendments to IFRS 3
• 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,
however the amendment does not have a material impact on the
Group.
Property, Plant and Equipment: Proceeds before Intended Use –
Amendments to IAS 16
• 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 does not have a
material impact on the Group.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments
to IAS 37
• 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.
C&C Group plc Annual Report 2023
155
The amendments are effective for annual reporting periods
beginning on or after 1 January 2022. The amendment does not
have a material impact on the Group.
AIP IFRS 1 First-time Adoption of International Financial
Reporting Standards – Subsidiary as a first-time adopter
• 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.
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
2023 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.
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 amendment is effective for annual reporting periods beginning
on or after 1 January 2022 with earlier adoption permitted. The
amendments do not have a material impact on the Group.
The impact of this standard is currently under assessment, but is
not expected to have any material impact on the Group.
AIP IFRS 9 Financial Instruments – Fees in the ‘10 per cent’ test
for derecognition of financial liabilities
• 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 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
amendments do not have a material impact on the Group.
AIP 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 amendment does not have a material impact on the
Group.
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.
Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 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 policy
information 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
Corporate GovernanceBusiness & StrategyFinancial Statements 156
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
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.
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12 (1 January 2023)
• 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.
Classification of Liabilities as Current or Non-current and Non-
current Liabilities with Covenants - Amendments to IAS 1 (1
January 2024)
• In January 2020 and October 2022, the IASB issued
amendments to 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; and
- Disclosures.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2024 and must be applied
retrospectively. The amendments are currently under assessment
but are not expected to have a material impact on the Group.
Lease Liability in a Sale and Leaseback – Amendments to IFRS
16 (1 January 2024)
• In September 2022 the Board issued Lease Liability in a Sale
and Leaseback (Amendments to IFRS 16). The amendment to
IFRS 16 specifies the requirements that a seller-lessee uses
in measuring the lease liability arising in a sale and leaseback
transaction, to ensure the seller-lessee does not recognise
any amount of the gain or loss that relates to the right of use it
retains.
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.
Liquidity and net debt reduction have been a key focus for the Group
throughout FY2023, and disciplined balance sheet management has
led to net debt excluding leases and liquidity of €78.9m and €470.3m
respectively at year end compared with €191.3m and €438.7m
respectively in FY2022. The Group delivered a leverage of 1.3x Net
Debt/EBITDA as at 28 February 2023.
The Group has successfully negotiated and completed a refinancing
of the current multi-currency facility agreement which will be
repayable in a single instalment following the publication of the
Group’s FY2023 Results, at which point the new facility will begin.
The Group will enter into a new five-year committed sustainability-
linked facility comprised of a €250m multi-currency revolving loan
facility and a €100m non-amortising Euro term loan, both with
a maturity of FY2028. The facility offers optionality of two 1-year
extensions to the maturity date callable within 12 months and 24
months of initial drawdown respectively. Both the multi-currency
facility and the Euro term loan were negotiated with six banks -
namely ABN Amro Bank, Allied Irish Bank, Bank of Ireland, Barclays
Bank, HSBC and Rabobank.
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; however, given the strong return
of trading on re-opening, the Group successfully exited waivers early
with its bank syndicate in June 2022, returning to normal covenants
at pre-COVID-19 levels. With regard to the new facility, which will go
live in FY2024, the Group has agreed the same covenants as the
previous agreement with the Group’s lending group.
The amendments to IFRS 16 apply to annual reporting periods
beginning on or after 1 January 2024. Earlier application is
permitted. The amendment is currently under assessment but are
not expected to have a material impact on the Group.
The Directors assessed the Group’s cash flow forecasts for the
period ending 31 August 2024 (the going concern “assessment
period”). The cash flow projections included various stress
C&C Group plc Annual Report 2023 157
testing scenarios involving higher costs, an evolving inflationary
environment, reduced volumes impacted by consumer confidence
and capital returns to shareholders. In each scenario, the Group
demonstrated sufficient headroom in relation to covenants.
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 return to unrestricted trading, revenue
and volume growth in the Group’s core markets, the implemented
price increases, and cost hedge positions taken; the cash flow
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 2023.
(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.
Corporate GovernanceBusiness & StrategyFinancial Statements 158
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
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.
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.
(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.
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
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
Buildings – ROI, Portugal
Buildings – UK
Plant & Machinery
Storage tanks
Other plant & machinery
n/a
2 - 6% straight-line
2 - 3% straight-line
2 - 7% straight-line
6 - 32% reducing
balance
Motor Vehicles & Other Equipment
Motor vehicles
Other equipment incl returnable
bottles, cases and kegs
15% straight-line
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
C&C Group plc Annual Report 2023
159
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 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.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 160
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
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.
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.
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.
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:
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.
Trade relationship re Tennent’s acquisition
Trade relationship re Wallaces acquisition
Trade relationship re Gleeson acquisition
Trade relationship re Matthew Clark and
Bibendum acquisition
20 years
10 years
15 years
15 years
Intangible assets (other than goodwill) (note 12)
Software and licence costs
5 - 8 years
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
C&C Group plc Annual Report 2023
161
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
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 162
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
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
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.
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.
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 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.
C&C Group plc Annual Report 2023 163
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.
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 FY2023 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 164
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
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.
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.
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.
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 either 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 (CODM), 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
the prior financial year, this 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 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.
C&C Group plc Annual Report 2023
165
Foreign currency translation
Inventories
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 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.
Corporate GovernanceBusiness & StrategyFinancial Statements
166
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
Share-based payments
Financial instruments
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 as a 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.
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 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.
C&C Group plc Annual Report 2023 167
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 168
Statement of Accounting Policies
For the year ended 28 February 2023 (continued)
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.
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.
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.
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 as at 28 February 2023, 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
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 2023 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.
Revenue recognition
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 and has contract packaging
agreements with a number of customers, to utilise excess
manufacturing capacity, that are non-standard and complex and
involve judgment regarding revenue recognition with regard to IFRS
15 Revenue from Contracts with Customers and also has some
significant and complex customer contracts regarding discounts
and marketing contributions. The Group has well developed
policies, systems and controls to inform management’s judgements
and estimates with regard to revenue recognition, measurement and
classification for its contract packaging agreements and complex
customer contracts.
C&C Group plc Annual Report 2023 169
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.
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.
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,
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,
Corporate GovernanceBusiness & StrategyFinancial Statements 170
Notes forming part of the financial statements
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 and prior financial year: Ireland and Great Britain.
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 manage the
business and allocate resources effectively.
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, 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-trades in Ireland. The
Group distributes San Miguel and Budweiser Brewing Group’s portfolio of beer brands across the island of Ireland on an exclusive basis.
The Group’s primary manufacturing plant in this segment 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 the sale of the Group’s own branded products in Scotland, with Tennent’s, Caledonia Best,
Heverlee and Magners being 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. The
Group’s primary manufacturing plant in this segment is the Wellpark Brewery in Glasgow, with major distribution and administration centres
in Glasgow, Bristol and London.
The division includes Tennent’s Direct, Scotland’s leading drinks distributor which serves the Scottish On-Trade with an unrivalled range
of drinks led by beer and cider, and includes exclusive distribution of Moët Hennessy products, such as Moët and Glenmorangie, and UK
distribution of international brands Tsingtao and Menabrea.
The segment includes the financial results from Matthew Clark, the largest independent distributor to the GB On-trade drinks sector.
Matthew Clark delivers a market leading composite drinks range across Wine, Spirits, beer, cider, and softs including a number of exclusive
distribution agreements with wine producers and third-party brands.
In addition, it includes Bibendum, the UK’s leading independent wine specialist servicing customer across the On-trade, independent
retail (through Walker & Wodehouse) and Off-trade nationwide. Delivering a market leading range of premium wine, a selection of exclusive
globally recognised artisan and innovative wine producers.
The Group’s Tennent’s Direct, Matthew Clark and Bibendum distribution businesses operate a nationwide distribution network serving the
independent free trade, national accounts, independent retail and Off-trade customers.
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 Group divested its 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.
C&C Group plc Annual Report 2023 171
1. SEGMENTAL REPORTING (continued)
(a) Analysis by reporting segment
2023
2022
Revenue
Net revenue
Operating profit
Revenue
Net revenue
Operating profit
€m
338.3
1,457.8
€m
224.3
1,213.8
1,796.1
1,438.1
-
-
1,796.1
1,438.1
Ireland
Great Britain
€m
388.0
€m
278.5
1,672.7
1,410.5
Total before exceptional items
2,060.7
1,689.0
-
-
2,060.7
1,689.0
Exceptional items (note 5)
Total
Profit on disposal (note 5)
Finance income (notes 5, 6)
Finance expense (note 6)
Finance expense exceptional items (notes 5, 6)
Share of equity accounted investments’ profit
after tax before exceptional items (note 13)
Share of equity accounted investments’
exceptional items (note 5)
Profit before tax
€m
28.1
56.0
84.1
(0.2)
83.9
1.1
0.2
(17.3)
(2.0)
-
-
65.9
€m
16.7
31.2
47.9
10.6
58.5
4.5
0.2
(16.1)
(6.7)
2.6
2.7
45.7
The exceptional items in the current financial year are €0.2m, of which €0.4m relates to Ireland and a credit of €0.2m relates to Great Britain.
The exceptional items in the prior financial year are a €10.6m credit, of which €9.2m relates to Ireland and €1.4m relates to Great Britain.
Profit on disposal of €0.4m in the current financial year relates to Great Britain and €0.7m relates to Ireland. Profit on disposal of €4.5m in the
prior financial year related to Great Britain.
The prior year share of equity accounted investments’ profit after tax before exceptional items of €2.6m relates to Great Britain. The prior
year share of equity accounted investments’ exceptional items of €2.7m relates to Great Britain.
Total assets for the year ended 28 February 2023 amounted to €1,422.9m (FY2022: €1,468.7m).
(b) Other operating segment information
Ireland
Great Britain
Total
2023
2022
Tangible and
intangible
expenditure
Lease additions
Depreciation
/amortisation /
impairment /
revaluation
Tangible and
intangible
expenditure
Lease additions
Depreciation /
amortisation /
impairment/
revaluation
€m
6.0
13.5
19.5
€m
2.3
24.6
26.9
€m
6.3
26.2
32.5
€m
7.3
5.9
13.2
€m
4.1
19.0
23.1
€m
6.2
25.6
31.8
Corporate GovernanceBusiness & StrategyFinancial Statements
172
Notes forming part of the financial statements
(continued)
1. SEGMENTAL REPORTING (continued)
(c) Geographical analysis of revenue and net revenue
Ireland
Great Britain
International*
Total
Revenue
Net revenue
2023
€m
388.0
1,648.5
24.2
2,060.7
2022
€m
338.3
1,439.0
18.8
1,796.1
2023
€m
278.5
1,386.3
24.2
1,689.0
2022
€m
224.3
1,195.1
18.7
1,438.1
*
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
28 February 2023
Property, plant & equipment
Goodwill & intangible assets
Equity accounted investments/financial assets
Total
28 February 2022
Property, plant & equipment
Goodwill & intangible assets
Equity accounted investments/financial assets
Total
Ireland
Great Britain
International
€m
€m
€m
74.6
157.1
0.4
232.1
Ireland
€m
73.4
157.6
0.4
231.4
130.7
463.2
0.7
594.6
5.0
25.2
0.2
30.4
Great Britain
International
€m
€m
135.9
473.7
0.7
610.3
4.7
25.2
0.2
30.1
Total
€m
210.3
645.5
1.3
857.1
Total
€m
214.0
656.5
1.3
871.8
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 introduced Branded and Distribution in the prior year 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
Net revenue
Branded*
Distribution**
Co pack/Other
Total Group from continuing operations
2023
Ireland
€m
105.9
170.6
2.0
278.5
Great Britain
€m
192.5
Total
€m
298.4
1,190.9
1,361.5
27.1
29.1
1,410.5
1,689.0
* 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 the Group’s distribution businesses and brands where C&C act as an exclusive agent for a brand in a specific geography.
C&C Group plc Annual Report 2023 1. SEGMENTAL REPORTING (continued)
Principal activities and products
Net revenue
Branded*
Distribution**
Co pack/Other
Total Group from continuing operations
173
2022
Ireland
€m
78.3
139.8
6.2
Great Britain
€m
170.1
1,005.5
38.2
Total
€m
248.4
1,145.3
44.4
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 the Group’s distribution businesses and brands where C&C act as an exclusive agent for a brand in a specific geography.
2. OPERATING COSTS
Before
exceptional
items
2023
Exceptional
items
(note 5)
€m
€m
Before
exceptional
items
2022
Exceptional
items
(note 5)
€m
€m
Total
€m
Raw material cost of goods sold/bought in finished
goods
Inventory write-down/(recovered) (note 14)
Employee remuneration (note 3)
Direct brand marketing
Other operating, selling and administration costs
Foreign exchange
Depreciation (notes 11, 19)
Amortisation (note 12)
Net (profit)/loss on disposal of property, plant &
equipment
Auditor’s remuneration (a)
Impairment of intangible assets (note 12)
Impairment of equity accounted investment (note 13)
Net revaluation of property, plant & machinery (note 11)
1,288.2
0.2
144.6
28.7
109.6
(0.4)
30.0
2.5
-
1.5
-
-
-
-
-
1.1
-
(0.9)
-
-
-
-
-
-
-
-
1,288.2
1,108.9
0.2
145.7
28.7
108.7
(0.4)
30.0
2.5
-
1.5
-
-
-
1.1
125.5
17.7
102.4
0.5
29.2
2.6
0.2
1.5
0.6
-
-
-
(4.1)
0.6
-
(11.1)
-
-
-
(1.8)
-
-
6.4
(0.6)
Total
€m
1,108.9
(3.0)
126.1
17.7
91.3
0.5
29.2
2.6
(1.6)
1.5
0.6
6.4
(0.6)
Total operating expenses
1,604.9
0.2
1,605.1
1,390.2
(10.6)
1,379.6
(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:
Audit of the Group financial statements
Audit of subsidiaries
Non-audit services
Total
EY Ireland 2023
Other EY Offices
2023
Total 2023
EY Ireland 2022
Other EY Offices
2022
Total 2022
€m
0.6
0.9
-
1.5
€m
-
-
-
-
€m
0.6
0.9
-
1.5
€m
0.4
0.4
0.4
1.2
€m
-
0.3
-
0.3
€m
0.4
0.7
0.4
1.5
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 prior financial in connection with the Rights Issue.
Corporate GovernanceBusiness & StrategyFinancial Statements
174
Notes forming part of the financial statements
(continued)
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:
Sales & marketing
Production & distribution
Administration
Total
The actual number of persons employed by the Group as at 28 February 2023 was 2,897 (FY2022: 2,822).
The aggregate remuneration costs of these employees can be analysed as follows:
Wages, salaries and other short-term employee benefits, net of government grants (a)
Restructuring costs (note 5)
Social welfare costs
Retirement benefits – defined benefit schemes (note 23)
Retirement benefits – defined contribution schemes, including pension related expenses
Equity settled share-based payments (note 4)
Other non-equity settled share-based payments and PRSI accrued with respect to share-based payments
Charged to the Income Statement
Actuarial gain on retirement benefits recognised in Other Comprehensive Income (note 23)
Total employee benefits
Directors’ remuneration
Directors’ remuneration (note 28)
2023
Number
445
1,613
868
2,926
2023
€m
122.8
1.1
12.4
(0.1)
6.3
2.5
0.7
2022
Number
435
1,454
852
2,741
2022
€m
106.7
0.6
10.3
0.7
5.5
1.5
0.8
145.7
126.1
(4.3)
141.4
(32.8)
93.3
2023
€m
3.7
2022
€m
4.1
(a) Government grants and assistance
In the prior financial year, wages and salaries amounting to €106.7m were stated net of wage subsidies received by the Group from the Irish
and UK governments. These wage subsidies were offset against the related wages and salaries expense over the period in which they were
incurred.
Employment Wage Subsidy Scheme (Ireland)
Coronavirus Job Retention Scheme (UK)
Grants related to income
2023
€m
-
-
-
2022
€m
1.7
2.9
4.6
In the prior financial year, the Group was in compliance with all the conditions of the respective schemes. The grant income received was
offset against the related costs in operating costs in the Income Statement.
C&C Group plc Annual Report 2023
175
3. EMPLOYEE NUMBERS & REMUNERATION COSTS (continued)
Government assistance
In the prior year, 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 in FY2022 of €0.3m.
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), no additional tax liabilities were deferred in FY2023 (FY2022: €11.0m VAT and €3.2m payroll taxes were deferred).
Payments made to the Irish tax authorities in respect of deferred tax liabilities during FY2023 totalled €15.6m for VAT and €2.5m for
payroll taxes (FY2022: €14.5m VAT and €2.1m payroll taxes). At the end of FY2023, there were no deferred VAT and payroll taxes liabilities
(FY2022: €15.6m VAT and €2.3m payroll taxes) due to the Irish tax authorities.
In the UK, no tax liabilities were deferred during FY2023 or FY2022. In FY2023 no payments were made to the UK tax authorities in respect
of deferred tax liabilities (FY2022: €32.7m (£27.9m) VAT and €15.0m (£12.8m) Excise Duties). VAT liabilities of €0.1m (£0.1m) were deferred
at the end of FY2023 (FY2022: €0.2m (£0.1m)) and excise duty liabilities of €10.0m (£8.8m) were deferred at the end of FY2023 (FY2022:
€10.5m (£8.8m)), included in the Euro equivalent closing balances is a retranslation gain of €0.6m.
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 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 achieved their performance conditions and therefore vested in full.
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.
The vesting of LTIP awards granted in December 2020 is subject to an assessment of the Group’s underlying financial performance across
the three-year period FY2021 – FY2023. Each award was 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 was subject to FY2022 Net Debt to FY2022 EBITDA ratio, with a minimum threshold of 4.1x and a maximum threshold
of 3.8x 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 EPS targets being met, with a minimum threshold set of 20c and a maximum threshold of 23c.
This condition was not achieved in relation to FY2023 EPS.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 176
Notes forming part of the financial statements
(continued)
4. SHARE-BASED PAYMENTS (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 three 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
three 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.
The vesting of LTIP awards granted in June 2022 and October 2022 will be subject to the following performance conditions assessed
across the three-year performance period FY2023 - FY2025. All such awards granted from June 2022 to October 2022 are subject to the
following three performance conditions:
• 45% of the award is subject to certain EPS targets being met, with a minimum threshold set of 22.2c and a maximum of 26c. This is to
be achieved by the end of the year three target range (end of FY2025) 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
three target range (end of FY2025) 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 FY2025, 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 him on 3
November 2020 (“Buy-Out Awards”). These shares were to compensate him 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 vested in respect of 50% of the shares in November 2022 (“Buy-Out 1”) and 50% of
the shares will vest in November 2023 (“Buy-Out 2”).
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.
C&C Group plc Annual Report 2023 177
4. SHARE-BASED PAYMENTS (continued)
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 tax authority 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 923,081 matching shares (1,845,879 partnership and matching) in trust at 28 February 2023 (FY2022: 696,476 matching
shares (1,392,646 partnership and matching shares held)).
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 prior 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:
Fair value at date of grant
€1.87
€2.36
€2.70
€2.05
€2.22
€2.70
LTIP options
granted
October 22
LTIP options
granted
Jun 22
LTIP options
granted
Jun 21
R&R
options granted
December 22
R&R
options granted
June 22
R&R
options granted
Jun 21
Exercise price
Risk free interest rate
Expected volatility
Expected term until exercise (years)
Dividend yield
-
3.22%
41.6%
3
-
-
1.89%
42.9%
3
-
-
0.16%
38.9%
3
-
-
3.19%
37.7%
2
2%
-
1.89%
41.5%
3
2%
-
0.02%
44.7%
1 Immediate
-
-
R&R
options
granted
May 21
€2.90
-
-
n/a
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. 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.
Corporate GovernanceBusiness & StrategyFinancial Statements
178
Notes forming part of the financial statements
(continued)
4. SHARE-BASED PAYMENTS (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
Executive Share Option Scheme
Number of
options/ equity
Interests
granted*
Number
deemed
outstanding
at 28 February
2023**
Grant
price
€
Market
value at date
of grant
Fair value at
date of grant*
€
€
1 June 2017
3 years
840,568
156,699
3.40
3.364
0.307
Long-Term Incentive Plan
2 December 2020
15 June 2021
9 June 2022
28 October 2022
Buy-Out Award
3 November 2020
Recruitment & Retention Plan
1 August 2017
11 February 2019
12 December 2019
18 February 2020
22 October 2020
3 November 2020
27 May 2021****
15 June 2021
9 June 2022
3 years
3 years
824,888
812,921
536,177
812,921
2.72 years
1,327,763
1,327,763
-
-
-
2.54
2.74
2.47
2.70
2.38 2.36
2.34 years
11,579
11,579
-
1.87 1.87
2-3 years
899,254
899,254
1.8 years
2-3 years
2.5 years
2 years
2 years
1.5 years
Immediate
65,585
477,081
476,052
60,171
17,826
149,041
196,963
17,750
6,008
-
-
17,826
-
121,317
1 year
170,230
154,287
-
-
-
-
-
-
-
-
-
2.8172
2.64
3.05 2.47 – 2.77
4.66
4.52
1.98
1.61
2.93
2.74
4.00
3.91
1.85
1.51
2.90
2.70
3 years 50,000
50,000
-
2.38 2.22
7 December 2022
2 years 23,349
23,349
Deferred Bonus Plan
11 February 2019
22 October 2020
2 years
2 years
14,420
17,826
-
17,826
6,435,517
4,152,756
Partnership and Matching Share
Schemes
1,845,879 ***
-
-
-
2.05 2.05
3.05
1.98
2.88
1.85
Expense
/ (income)
in Income
Statement
2023
Expense /
(income)
in Income
Statement
2022
€m
-
0.2
0.7
0.8
-
€m
-
0.7
0.5
-
-
-
0.4
(0.3)
-
-
-
-
0.2
-
-
-
-
2.5
0.7
-
(0.7)
(0.2)
0.1
-
0.2
-
0.3
-
-
-
-
1.5
0.7
1.685
1.51
0.5
0.6
*
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 2023.
*** Includes both partnership and matching shares.
**** Previously named ‘MCB compensation awards’.
The amount charged to the Income Statement includes a credit of €0.3m (FY2022: credit of €0.9m), 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.
C&C Group plc Annual Report 2023 179
4. SHARE-BASED PAYMENTS (continued)
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:
Outstanding at beginning of year
Granted
Exercised
Forfeited/lapsed
Outstanding at end of year
2023
2022
Number of
options/ equity
Interests
Weighted average
exercise price
Number of
options/ equity
Interests
Weighted average
exercise price
3,577,335
1,412,691
(445,236)**
(392,034)
4,152,756
€
0.15
-
-
-
3,160,858
1,380,647*
(265,749)
(698,421)
0.13
3,577,335
€
0.30
-
1.61
-
0.15
*
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 exercised number of shares excludes additional granted shares of 155,495 that were granted due to changes in vesting assumptions on share options during FY2023, which
were also exercised in FY2023.
The aggregate number of share options/equity Interests exercisable at 28 February 2023 was 941,340 (FY2022: 420,923).
The unvested share options/equity Interests (excluding those awards which are not deemed capable of vesting) outstanding at 28 February
2023 have a weighted average vesting period outstanding of 1.4 years (FY2022: 1.4 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 5.2 years (FY2022: 5.9
years).
The weighted average market share price at date of exercise of all share options/equity Interests exercised during the year was £1.75 or
€2.00 euro equivalent (FY2022: €2.97); the average share price for the year was £1.81 or €2.10 euro equivalent (FY2022: €2.87); and the
market share price as at 28 February 2023 was £1.49 or €1.70 euro equivalent (28 February 2022: £2.11 or €2.52 euro equivalent).
5. EXCEPTIONAL ITEMS
COVID-19 (a)
Restructuring (costs)/credits (b)
Impairment of equity accounted investment (c)
Reversal of impairment of property, plant & equipment (d)
Rights Issue costs (e)
Other (f)
Operating profit/(loss) exceptional items
Profit on disposal (g)
Finance income (h)
Finance expense (i)
Share of equity accounted investments’ exceptional items (c)
Included in profit before tax
Income tax credit/(charge) (j)
Included in profit after tax
2023
€m
1.5
(1.1)
-
-
(0.7)
0.1
(0.2)
1.1
0.2
(2.0)
-
(0.9)
0.2
(0.7)
2022
€m
17.5
1.2
(6.4)
0.6
(2.6)
0.3
10.6
4.5
0.2
(6.7)
2.7
11.3
(2.4)
8.9
Corporate GovernanceBusiness & StrategyFinancial Statements
180
Notes forming part of the financial statements
(continued)
5. EXCEPTIONAL ITEMS (continued)
(a) COVID-19
The Group has accounted for the COVID-19 pandemic as an exceptional item and realised an exceptional credit of €1.5m from operating
activities in FY2023 (FY2022: credit of €17.5m), broken down as follows: in FY2023 the Group reviewed the recoverability of its trade debtor
and advances to customers and realised a credit of €0.9m with respect to its provision against trade debtors (FY2022: credit of €7.9m) and
a credit of €0.4m with respect to its provision for advances to customers (FY2022: credit of €5.5m). Also, during the current financial year,
the Group released €0.2m in relation to a provision for lost kegs (FY2022: €nil). In the prior year the Group released a credit of €4.1m with
respect to inventory that had previously been deemed at risk of obsolescence as a consequence of the COVID-19 restrictions.
(b) Restructuring costs
A cost of €1.1m relating to restructuring costs was incurred in the current financial year in relation to severance costs which arose as a
consequence of the ongoing optimisation of the delivery networks and operations in England and Scotland (FY2022: credit of €1.2m).
(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). Admiral Taverns was classified as an asset held for sale as at 24 February 2022 and the sale of the
shares was completed in three tranches during FY2023.
The net impact of exceptional items in relation to Admiral was a charge of €3.7m in FY2022. 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 in FY2022 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 in FY2022 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 in FY2022.
Also in the prior 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 reversed
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 the prior year end rate).
(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 and prior financial years, 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, no change in value was recorded through the Consolidated Income Statement (FY2022:
gain of €0.6m) and a loss of €0.7m accounted for within Other Comprehensive Income (FY2022: gain of €2.5m).
(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). During FY2022, 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 Consolidated Income Statement. In FY2023,
additional costs of €0.7m were incurred as a result of the Rights Issue – this cost was in respect of a clarification of VAT treatment by the
European Court of Justice on 8 September 2022.
C&C Group plc Annual Report 2023
181
5. EXCEPTIONAL ITEMS (continued)
(f) Other
In the current financial year €0.1m was released in relation to a provision for legal disputes (FY2022: €0.3m release).
(g) Profit on disposal
During the current financial year, as described in c) above, the Group completed the sale of its asset held for sale, Admiral Taverns, to
Proprium Capital Partners for a total consideration of €63.6m (£55.0m), realising a profit of €0.4m on disposal.
Also, during the current financial year, the Group received contingent consideration of €0.7m in relation to the sale of its Tipperary Water
Cooler business, the sale of which was completed in FY2021.
During the prior financial year, the Group completed the sale of its wholly-owned US subsidiary, Vermont Hard Cider Company to
Northeast Kingdom Drinks Group, LLC on 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.
(h) Finance income
The Group earned finance income of €0.2m in both the current and prior financial years relating to promissory notes issued as part of the
disposal of the Group’s subsidiary Vermont Hard Cider Company in FY2022.
(i) Finance expense
The Group incurred costs of €2.0m (FY2022: €6.7m) during the current financial year directly associated with covenant waivers due to the
impact of COVID-19. These costs included waiver fees, increased margins payable and other professional fees associated with covenant
waivers.
(j) Income tax credit/(charge)
The tax credit in the current financial year, with respect to exceptional items, amounted to €0.2m (FY2022: €2.4m charge).
6. FINANCE INCOME AND EXPENSE
Recognised in Income Statement
Finance expense:
Interest expense
Other finance expense
Interest on lease liabilities (note 19)
Total finance expense
Exceptional finance expense:
Interest expense
Total exceptional finance expense
Exceptional finance income:
Interest income
Total exceptional finance income
2023
€m
2022
€m
(9.4)
(4.8)
(3.1)
(17.3)
(2.0)
(2.0)
0.2
0.2
(9.4)
(3.4)
(3.3)
(16.1)
(6.7)
(6.7)
0.2
0.2
Net finance expense
(19.1)
(22.6)
Corporate GovernanceBusiness & StrategyFinancial Statements
182
Notes forming part of the financial statements
(continued)
6. FINANCE INCOME AND EXPENSE (continued)
Recognised directly in Other Comprehensive Income
Foreign currency translation differences arising on the net investment in foreign operations
Foreign currency recycled on disposal of asset held for sale
Foreign currency recycled on disposal of subsidiary
Net (expense)/income recognised directly in Other Comprehensive Income
7. INCOME TAX
(a) Analysis of expense in year recognised in the Income Statement
Current tax:
Irish corporation tax
Foreign corporation tax
Adjustments in respect of previous years
Deferred tax:
Irish
Foreign
Adjustments in respect of previous years
Rate change impact
Total income tax expense recognised in Income Statement
Relating to continuing operations
– continuing operations before exceptional items
– continuing operations exceptional items
Total
2023
€m
(19.8)
0.4
-
(19.4)
2023
€m
3.2
4.2
0.8
8.2
0.5
4.5
1.5
(0.7)
5.8
14.0
14.2
(0.2)
14.0
2022
€m
11.9
-
(0.2)
11.7
2022
€m
2.3
2.0
(1.4)
2.9
0.5
2.2
3.1
(0.1)
5.7
8.6
6.2
2.4
8.6
C&C Group plc Annual Report 2023
183
7. INCOME TAX (continued)
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:
Profit before tax
Less: Group’s share of equity accounted investments’ profit after tax
Adjusted profit before tax
Tax at standard rate of corporation tax in the Republic of Ireland of 12.5%
Actual tax expense is affected by the following:
Expenses not deductible for tax purposes
Adjustments in respect of prior years
Income taxed at rates other than the standard rate of tax
Group relief received
Other
Non-recognition/(recognition) of deferred tax assets
Total income tax expense
(b) Deferred tax recognised directly in Other Comprehensive Income
Deferred tax arising on revaluation of property, plant & machinery reflected in revaluation reserve
Deferred tax arising on movement of retirement benefits
Total deferred tax (credit)/charge
2023
€m
65.9
-
65.9
8.2
1.3
1.9
2.8
(0.1)
(1.0)
0.9
14.0
2023
€m
(0.3)
(0.1)
(0.4)
2022
€m
45.7
(5.3)
40.4
5.1
1.7
1.7
5.8
(4.4)
0.2
(1.5)
8.6
2022
€m
0.6
4.3
4.9
(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% increased to 25% from 1
April 2023.
8. DIVIDENDS
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.
Subject to shareholder approval at the Annual General Meeting, the Directors have proposed a final dividend of 3.79 cent per share to
be paid on 21 July 2023 to ordinary shareholders registered at the close of business on 9 June 2023. No interim dividend was paid with
respect to FY2023; therefore, the Group’s full year dividend will amount to 3.79 cent per share. Using the number of shares in issue at
28 February 2023 and excluding those shares for which it is assumed that the right to dividend will be waived, this would equate to a
distribution of €15.0m. There is no scrip dividend alternative proposed. Due to the impact of COVID-19, total dividends for the prior financial
year were €nil.
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.
Corporate GovernanceBusiness & StrategyFinancial Statements
184
Notes forming part of the financial statements
(continued)
9. EARNINGS PER ORDINARY SHARE
Denominator computations
Number of shares at beginning of year
Shares issued in respect of options exercised
Shares issued in respect of Rights Issue
Number of shares at end of year (note 25)
Weighted average number of ordinary shares (basic)*
Adjustment for the effect of conversion of options
Weighted average number of ordinary shares, including options (diluted)
* Excludes 10.2m treasury shares (FY2022: 10.7m).
Profit attributable to ordinary shareholders
Group profit for the financial year
Adjustment for exceptional items, net of tax (note 5)
Earnings as adjusted for exceptional items, net of tax
Basic earnings per share
Basic earnings per share
Adjusted basic earnings per share
Diluted earnings per share
Diluted earnings per share
Adjusted diluted earnings per share
2023
Number
‘000
2022
Number
‘000
401,914
320,480
93
-
402,007
147
81,287
401,914
391,269
374,560
1,697
1,374
392,966
375,934
2023
€m
51.9
0.7
52.6
2022
€m
37.1
(8.9)
28.2
Cent
Cent
13.3
13.4
13.2
13.4
9.9
7.5
9.9
7.5
Basic earnings per share is calculated by dividing the Group profit 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 (FY2023: 10.2m
shares, FY2022: 10.7m shares).
Diluted earnings 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 (FY2023: 445,410; FY2022: 499,828). 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.
C&C Group plc Annual Report 2023
185
10. BUSINESS COMBINATIONS/DIVESTMENTS AND NON-CONTROLLING INTERESTS
The Group had no new business combinations or divestments during the current financial year.
The Group continues to hold the non-cash consideration from the sale of Vermont Hard Cider Company (VHCC) of the promissory notes
issued of USD 4.8m as a derivative financial asset. This has been revalued to €4.5m in the current financial year (FY2022: €4.3m).
Year ended 28 February 2022
In the prior financial year, the Group disposed of €12.1m of net assets with respect to VHCC for an initial consideration of €17.5m.
Transaction costs of €0.5m were also incurred (included in the cash flows from operating activities) resulting in a profit on disposal of €4.5m
(note 5).
11. PROPERTY, PLANT & EQUIPMENT
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment
€m
€m
€m
Total
€m
Group
Cost or valuation
At 28 February 2021
Translation adjustment
Additions
Revaluation of property, plant & machinery
Group transfer reclassification
Disposals
At 28 February 2022
Translation adjustment
Additions
Revaluation of property, plant & machinery
Group transfer reclassification
At 28 February 2023
Depreciation
At 28 February 2021
Translation adjustment
Disposals
Charge for the year
At 28 February 2022
Translation adjustment
Charge for the year
At 28 February 2023
Net book value
At 28 February 2023
At 28 February 2022
88.6
1.9
3.2
3.1
(0.5)
(1.4)
94.9
(2.5)
0.4
(0.6)
0.8
93.0
18.3
0.4
(0.8)
2.3
20.2
(0.6)
2.3
21.9
71.1
74.7
205.5
55.9
350.0
2.7
5.7
-
0.5
(0.3)
1.7
2.2
-
-
(0.3)
6.3
11.1
3.1
-
(2.0)
214.1
59.5
368.5
(3.4)
10.9
(0.1)
(0.8)
(1.3)
3.1
-
-
(7.2)
14.4
(0.7)
-
220.7
61.3
375.0
145.4
1.5
(0.2)
4.2
150.9
(1.8)
5.3
154.4
66.3
63.2
47.0
1.5
(0.3)
3.2
51.4
(1.1)
2.6
210.7
3.4
(1.3)
9.7
222.5
(3.5)
10.2
52.9
229.2
8.4
8.1
145.8
146.0
Corporate GovernanceBusiness & StrategyFinancial Statements
186
Notes forming part of the financial statements
(continued)
11. PROPERTY, PLANT & EQUIPMENT (continued)
28 February 2023
Leased right-of-use assets
At 28 February 2023, net carrying amount (note 19)
Total property, plant & equipment
28 February 2022
Leased right-of-use assets
At 28 February 2022, net carrying amount (note 19)
Total property, plant & equipment
Freehold land & buildings Plant & machinery
Motor vehicles
& other
equipment
€m
€m
€m
Total
€m
31.2
102.3
0.2
66.5
33.1
64.5
41.5
210.3
34.0
108.7
3.3
66.5
30.7
68.0
38.8
214.0
Cash outflow with respect to property, plant & equipment was €10.1m (FY2022: €14.9m) primarily due to an increase in closing capital
accruals as at 28 February 2023. No depreciation is charged on freehold land which had a book value of €16.1m at 28 February 2023
(FY2022: €18.2m).
Valuation of freehold land & buildings and plant & machinery - 28 February 2023
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 2023, was a decrease in the value of freehold land & buildings of €0.6m of which
€0.4m was credited to the Income Statement and €1.0m was charged to Other Comprehensive Income. Additionally, there was a decrease
in the value of plant & machinery of €0.1m of which €0.4m was charged to the Income Statement and €0.3m 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 2023 and no
adjustment was recorded in this regard.
Valuation of freehold land & buildings and plant & machinery - 28 February 2022
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.
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 the revaluation reserve via Other Comprehensive Income.
C&C Group plc Annual Report 2023 11. PROPERTY, PLANT & EQUIPMENT (continued)
Useful Lives
The following useful lives were attributed to the assets:
Asset category
Tanks
Process equipment
Bottling & packaging equipment
Process automation
Buildings
Useful life
30 – 35 years
20 – 25 years
15 – 20 years
10 years
50 years
Net book value (pre right-of-use assets)
Carrying value at 28 February 2023 post revaluation
Carrying value at 28 February 2023 pre revaluation
Loss on revaluation
28 February 2023 classified within:
Other Comprehensive Income
Net book value (pre right-of-use assets)
Carrying value at 28 February 2022 post revaluation
Carrying value at 28 February 2022 pre revaluation
Gain on revaluation
28 February 2022 classified within:
Income Statement
Other Comprehensive Income
Freehold land &
buildings Plant & machinery
€m
€m
71.1
71.7
(0.6)
66.3
66.4
(0.1)
Motor vehicles &
other equipment
€m
8.4
8.4
-
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment
€m
€m
74.7
71.6
3.1
63.2
63.2
-
€m
8.1
8.1
-
187
Total
€m
145.8
146.5
(0.7)
(0.7)
Total
€m
146.0
142.9
3.1
0.6
2.5
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:
Recurring measurements
Freehold land & buildings measured at market value
Freehold land & buildings measured at Depreciated Replacement Cost
Plant & machinery measured at Depreciated Replacement Cost
At 28 February 2023
Carrying amount
Quoted prices
Level 1
€m
€m
Significant
observable
Level 2
€m
Significant
unobservable
Level 3
€m
13.5
57.6
66.3
137.4
-
-
-
-
-
-
-
-
13.5
57.6
66.3
137.4
Corporate GovernanceBusiness & StrategyFinancial Statements
188
Notes forming part of the financial statements
(continued)
11. PROPERTY, PLANT & EQUIPMENT (continued)
Recurring measurements
Freehold land & buildings measured at market value
Freehold land & buildings measured at Depreciated Replacement Cost
Plant & machinery measured at Depreciated Replacement Cost
At 28 February 2022
Carrying amount
Quoted prices
Level 1
€m
€m
Significant
observable
Level 2
€m
Significant
unobservable
Level 3
€m
15.5
59.2
63.2
137.9
-
-
-
-
-
-
-
-
15.5
59.2
63.2
137.9
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.
Unobservable inputs
The significant unobservable inputs used in the market value measurement of land & buildings is as follows:
Valuation technique
Significant unobservable inputs
Comparable market
transactions
Price per square foot/
acre
Range of unobservable inputs –
Land (‘000)
Range of unobservable inputs –
Buildings
Relationship of unobservable
inputs to fair value
The higher the price per
square foot/acre, the
higher the fair value
Republic of Ireland
€50 – €150 (FY2022:
€50 – €150) per hectare
€54 – €1,249 (FY2022:
€59 – €1,169) per square
metre
Portugal
€40 (FY2022: no change
from current year price)
per hectare
€100 – €611 (FY2022:
€100 - €585) per square
metre
United Kingdom
£150 – £250 (FY2022:
£275- £325) per acre
£254 – £1,645 (FY2022:
£254 to £1,593) per
square metre
C&C Group plc Annual Report 2023
189
11. PROPERTY, PLANT & EQUIPMENT (continued)
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% (FY2022: 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% (FY2022: 0% to 100%). The weighted average
obsolescence factor by site is as follows: Cidery, Ireland – 21% (FY2022: 21%);
Brewery Scotland – 8% (FY2022: 4%) and Cidery, Portugal – 0% (FY2022: 0%)
Physical and functional obsolescence adjustment
factor
Adjustment for changes to physical and functional obsolescence ranging from
63% to 83% (FY2022: 64% to 86%)
The carrying value of depot freehold land & buildings would increase/(decrease) by €0.7m (FY2022: €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 by €2.4m
(FY2022: €2.9m) if the economic obsolescence adjustment factor was decreased by 5%. If the economic obsolescence adjustment
increased by 5% the value would decrease by €2.9m (FY2022: €2.9m). The estimated carrying value of the same land & buildings would
increase/(decrease) by €1.1m (FY2022: €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
€3.2m (FY2022: €2.5m) if the economic obsolescence adjustment factor was decreased by 5%. If the economic obsolescence adjustment
increased by 5% the value would decrease by €4.0m (FY2022: €2.5m). If the gross replacement cost was increased by 2% the carrying value
of the Group’s plant & machinery would increase by €0.8m (FY2022: €0.9m). If the gross replacement cost decreased by 2% the carrying
value of the Group’s plant & machinery would decrease by €1.2m (FY2022: €0.9m).
Company
The Company has no property, plant & equipment.
Corporate GovernanceBusiness & StrategyFinancial Statements
190
Notes forming part of the financial statements
(continued)
12. GOODWILL & INTANGIBLE ASSETS
Cost
At 28 February 2021
Additions
Translation adjustment
At 28 February 2022
Additions
Translation adjustment
At 28 February 2023
Amortisation and impairment
At 28 February 2021
Impairment charge for the year
Amortisation charge for the year
At 28 February 2022
Amortisation charge for the year
At 28 February 2023
Net book value
At 28 February 2023
At 28 February 2022
Goodwill
€m
Brands
€m
599.8
321.9
-
6.5
606.3
-
(7.7)
598.6
-
4.5
326.4
-
(5.3)
321.1
76.2
214.6
-
-
-
-
76.2
214.6
-
76.2
-
214.6
522.4
530.1
106.5
111.8
Other intangible
assets
€m
40.5
2.2
0.5
43.2
5.1
(0.6)
47.7
25.4
0.6
2.6
28.6
2.5
31.1
16.6
14.6
Goodwill
Goodwill has been attributed to cash generating units (as identified under IAS 36 Impairment of Assets) as follows:
At 28 February 2021
Translation adjustment
At 28 February 2022
Translation adjustment
At 28 February 2023
Ireland
€m
154.5
-
154.5
-
154.5
Scotland
C&C Brands
North America
€m
59.1
1.5
60.6
(1.7)
58.9
€m
180.6
0.7
181.3
(0.8)
180.5
€m
9.2
-
9.2
-
9.2
Export
€m
16.0
-
16.0
-
16.0
MCB
€m
104.2
4.3
108.5
(5.2)
103.3
Total
€m
962.2
2.2
11.5
975.9
5.1
(13.6)
967.4
316.2
0.6
2.6
319.4
2.5
321.9
645.5
656.5
Total
€m
523.6
6.5
530.1
(7.7)
522.4
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.
C&C Group plc Annual Report 2023
191
12. GOODWILL & INTANGIBLE ASSETS (continued)
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 CGUs 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 and Matthew Clark and Bibendum brands were valued at fair value on the date of acquisition in accordance with
the requirements of IFRS 3 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 2023 amounted to €73.0m (FY2022: €76.6m) 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 value of brands with indefinite lives are allocated to operating segments as follows:
At 28 February 2021
Translation adjustment
At 28 February 2022
Translation adjustment
At 28 February 2023
Ireland
Great Britain
€m
-
-
-
-
-
€m
107.3
4.5
111.8
(5.3)
106.5
Total
€m
107.3
4.5
111.8
(5.3)
106.5
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 are no title restrictions 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.
Corporate GovernanceBusiness & StrategyFinancial Statements
192
Notes forming part of the financial statements
(continued)
12. GOODWILL & INTANGIBLE ASSETS (continued)
Other intangible assets
Other intangible assets have been attributed to operating segments (as identified under IFRS 8 Operating Segments) as follows:
Cost
At 28 February 2021
Additions
Translation adjustment
At 28 February 2022
Additions
Translation adjustment
At 28 February 2023
Amortisation and impairment
At 28 February 2021
Impairment charge for the year
Amortisation charge for the year
At 28 February 2022
Amortisation charge for the year
At 28 February 2023
Net book value
At 28 February 2023
At 28 February 2022
Ireland
Great Britain
€m
7.0
0.1
-
7.1
0.2
-
7.3
3.4
-
0.6
4.0
0.7
4.7
2.6
3.1
€m
33.5
2.1
0.5
36.1
4.9
(0.6)
40.4
22.0
0.6
2.0
24.6
1.8
26.4
14.0
11.5
Total
€m
40.5
2.2
0.5
43.2
5.1
(0.6)
47.7
25.4
0.6
2.6
28.6
2.5
31.1
16.6
14.6
In the prior financial year, the Group wrote off IT intangible assets of €0.6m relating to cloud software licence agreements treated as service
contracts.
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 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 2023 with respect to intangible assets was €2.5m (FY2022: €2.6m).
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 to compare the carrying value of the assets with their recoverable amount through 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
(CGUs), 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.
C&C Group plc Annual Report 2023
193
12. GOODWILL & INTANGIBLE ASSETS (continued)
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, Board-
approved, financial projections for year one which are then projected out for years two, three, four and five.
• Long-term growth rate – cash flows after the first five years are 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 are based on management’s assessment of anticipated market conditions for each CGU. Cash flow forecasts
assume the continuation of trading with no lockdowns or the reintroduction of COVID-19 restrictions. Persistent cost inflation pressures
have been partially mitigated by implementing a series of price increases and cost hedge positions, providing a degree of protection from
the inflationary environment as the Group enters FY2024. Historical experience was considered, along with an analysis of core strengths
and weaknesses in the markets of operation. External factors considered include macroeconomic conditions, inflation expectations by
geography, regulation and anticipated regulatory changes (such as expected adjustments to duty rates and minimum pricing), market
growth rates, sales price trends, competitor activity, market share objectives, and strategic plans and initiatives.
The impact of climate change has been incorporated into the Group’s Goodwill impairment assessment and financial forecasts for each
Cash Generating Unit (CGU). This includes considering the recoverability of Goodwill taking into account the Group’s sustainability
initiatives, examples of which include the Out of Plastics project, the installation of Ireland's largest rooftop solar panel system in Clonmel,
and heat recovery systems at the Group’s manufacturing sites. The Group recognises that sustainability is an integral part of the Group’s
brands' growth journeys and consumers are increasingly concerned about the environmental impact of the brands they support.
A terminal growth rate of 2.00% (FY2022: 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 7.17%-8.74% (FY2022: 5.92%-6.68%); 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.
The Group has performed the detailed impairment testing calculations by cash generating units with the following discount rates being
applied:
Market
Ireland
Scotland
C&C Brands
North America
Export
Matthew Clark Bibendum (MCB)
Discount rate
2023
Discount rate
2022
Terminal growth
rate 2023
Terminal growth
rate 2022
8.74%
8.15%
8.15%
7.17%
8.15%
8.15%
6.68%
6.12%
6.12%
5.92%
6.12%
6.12%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
1.75%
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 (FY2022: €nil impairment charge).
Significant goodwill amounts
The goodwill allocated to Ireland, C&C Brands and MCB CGUs amount to 30% (FY2022: 29%), 35% (FY2022: 34%) and 20% (FY2022:
20%) of the total carrying amount of goodwill respectively.
Goodwill allocated to the cash generating unit
at balance sheet date
Discount rate applied to the cash flow
projections (real pre-tax)
Ireland
2023
2022
C&C Brands
2023
2022
MCB
2023
2022
154.5
154.5
180.5
181.3
103.3
108.5
8.74%
6.68%
8.15%
6.12%
8.15%
6.12%
Corporate GovernanceBusiness & StrategyFinancial Statements
194
Notes forming part of the financial statements
(continued)
12. GOODWILL & INTANGIBLE ASSETS (continued)
Sensitivity analysis
In the current financial year, the impairment testing carried out as at 28 February 2023 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.
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 €41m. The table below identifies the impact of a
movement in the key inputs with respect to C&C Brands.
Increase/(decrease) in operating profit
Increase in discount rate
Decrease in discount rate
Increase in terminal growth rate
Decrease in terminal growth rate
Movement
%
2.5/(2.5)
0.25
(0.25)
0.25
(0.25)
2023
Increase/(decrease)
on headroom
€m
Movement
%
2022
Increase/(decrease)
on headroom
7.3/(7.3)
2.5/(2.5)
(12.6)
13.5
10.9
(10.1)
0.25
(0.25)
0.25
(0.25)
€m
8.3/(8.3)
(19.6)
22.1
18.9
(16.8)
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
Investment in equity accounted investments/financial assets
€m
€m
Carrying amount at 1 March 2021
Purchase price paid
Share of profit after tax
Share of exceptional profit after tax (note 5)
Impairment of equity investment
Share of Other Comprehensive Income
Translation adjustment
Classified as asset held for sale (note 16)
Carrying amount at 28 February 2022
Purchase price paid
Share of profit after tax
Translation adjustment
Carrying amount at 28 February 2023
62.1
-
2.6
2.7
(6.4)
2.2
2.7
(65.9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
€m
0.4
-
-
-
-
-
-
-
Other
€m
0.6
0.3
-
-
-
-
-
-
0.4
0.9
-
-
-
-
-
-
0.4
0.9
1.3
Total
€m
63.1
0.3
2.6
2.7
(6.4)
2.2
2.7
(65.9)
1.3
-
-
-
C&C Group plc Annual Report 2023
195
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (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:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets/(liabilities)
Revenue
(Loss)/profit before tax
Other Comprehensive Income
Joint ventures
2023
Associates
2023
Admiral Taverns
2022*
Joint ventures
2022
Associates
2022
€m
2.0
1.1
(1.3)
(2.1)
(0.3)
2.6
(0.5)
-
€m
2.8
1.4
(1.8)
(0.5)
1.9
2.1
0.3
-
€m
668.4
74.9
(466.3)
(105.9)
171.1**
127.3
4.9
4.4
€m
2.5
0.9
(1.7)
(1.5)
0.2
2.7
(0.2)
-
€m
3.4
1.5
(2.2)
(0.8)
1.9
1.2
(0.1)
-
*
Included in the current assets for Admiral Taverns is cash and cash equivalents of €32.0m for the prior year. In the prior year, Admiral Taverns also had depreciation and
amortisation of €13.7m, net interest costs of €29.0m and a tax credit of €5.9m.
** Net assets of €171.1m by the Group’s share in equity at 24 February 2022 of 48.85% amounted to €83.6m however the percentage ownership of the Group had 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 €6.4m in the prior financial year which translated at FY2023 rates was €6.3m.
A listing of the Group’s equity accounted investments is contained in note 29.
Admiral Taverns
On 17 May 2022, the Group announced the sale of its joint venture investment in Brady P&C Limited (‘Admiral Taverns’), at which point
C&C’s shareholding in Admiral Taverns was 48.85%, 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. The Group continued to equity account for this investment up until
this date. The sale of the shares was completed in three tranches during FY2023.
In the prior financial year, the share of profit before exceptional items of Admiral Taverns attributable to the Group was €2.6m. The Group
also recognised a credit of €2.7m with respect to its share of Admiral Taverns’ exceptional items in the prior year. 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 the prior year in relation to its share of other exceptional items, 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 prior year of €0.5m, primarily relating to restructuring costs and 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 in the prior year.
Also in the prior 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 £55.0m (€65.9m at date of classification as held for
sale, €65.8m at FY2022 year end rate).
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 brewers in 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 196
Notes forming part of the financial statements
(continued)
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
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 year, the Group disposed of its 50% investment in 3 Counties Spirits Limited, for €nil consideration, which had been
acquired for €nil consideration during FY2021.
During the prior 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 FY2021, the Group made a 1% investment in an English entity Bramerton Condiments Limited for €0.1m (£0.1m) and also acquired
an 8% shareholding in Innis & Gunn Holdings Limited at €nil cost for which share subscription costs of €0.1m (£0.1m) were incurred in this
regard.
The Group has a 33.33% investment in Braxatorium Parcensis CVBA (Belgium) of €0.2m. The Group also has equity investments in
Shanter Inns Limited (Scotland), 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
Equity investment in subsidiary undertakings at cost
At beginning of year
Capital contribution in respect of share options granted to employees of subsidiary undertakings
Capital contribution into subsidiary undertakings
Reclassification of capital contribution in respect of share options granted to employees of subsidiary
undertakings to Trade & other receivables
Capital contribution in respect of the Rights Issue
At end of year
2023
€m
1,158.2
2.5
0.4
(2.5)
-
1,158.6
2022
€m
985.4
1.5
-
-
171.3
1,158.2
The total expense of €2.5m (FY2022: €1.5m) attributable to equity settled awards granted to employees of subsidiary undertakings has
been included as a capital contribution in financial assets. In the current year this has been reclassified to Trade & other receivables.
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
Company Balance Sheet. Details of subsidiary undertakings are set out in note 29.
C&C Group plc Annual Report 2023
14. INVENTORIES
Group
Raw materials & consumables
Finished goods & goods for resale
Total inventories at lower of cost and net realisable value
197
2023
€m
43.8
131.1
174.9
2022
€m
37.6
130.6
168.2
Inventory write-downs recognised within operating costs before exceptional items amounted to €0.2m in the current year and €1.1m
in FY2022 and were with respect to breakages and write-offs of damaged and obsolete stock. In the prior year, the Group realised
an exceptional credit of €4.1m with respect to inventory, which related to recoveries on inventory that had been deemed at risk of
obsolescence as a consequence of COVID-19 restrictions.
Inventory impairment allowance levels are reviewed by management and revised where appropriate, taking account of the latest available
information on the recoverability of carrying amounts.
15. TRADE & OTHER RECEIVABLES
Amounts falling due within one year:
Trade receivables
Amounts due from Group undertakings
Advances to customers
Prepayments and other receivables
Amounts falling due after one year:
Advances to customers
Prepayments and other receivables
Group
Company
2023
€m
125.6
-
8.8
29.7
164.1
33.1
4.9
38.0
2022
€m
147.5
-
4.6
34.2
186.3
38.4
4.6
43.0
2023
€m
-
285.1
-
-
2022
€m
-
114.7
-
-
285.1
114.7
-
-
-
-
-
-
Total
202.1
229.3
285.1
114.7
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 €94.1m to Group cash (FY2022: €84.1m) at 28 February 2023. The Group’s debtors would therefore have been €94.1m higher
(FY2022: €84.1m) had the programme not been in place. The Group’s trade receivables programme is not recognised on the Group’s
Consolidated Balance Sheet as it meets the de-recognition criteria under IFRS 9 Financial Instruments.
Corporate GovernanceBusiness & StrategyFinancial Statements
198
Notes forming part of the financial statements
(continued)
15. TRADE & OTHER RECEIVABLES (continued)
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 2023 and 28 February 2022 were as follows:
Group
Not past due
Past due:
Past due 0-30 days
Past due 31-120 days
Past due 121-365 days
Past due more than one year
Total
Trade receivables
Advances to customers
Total
Total
Gross
Impairment
Gross
Impairment
Gross
Impairment
Gross
Impairment
2023
€m
2023
€m
2023
€m
2023
€m
2023
€m
2023
€m
2022
€m
2022
€m
98.8
(1.8)
41.7
(3.9)
140.5
(5.7)
173.7
(7.2)
16.0
10.2
3.8
6.0
134.8
(0.8)
(0.4)
(0.5)
(5.7)
(9.2)
0.4
0.3
1.4
3.9
47.7
(0.3)
(0.1)
(0.5)
(1.0)
(5.8)
16.4
10.5
5.2
9.9
(1.1)
(0.5)
(1.0)
(6.7)
5.0
10.0
8.6
11.0
(0.3)
(0.4)
(0.6)
(9.3)
182.5
(15.0)
208.3
(17.8)
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.
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, 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. The Group recorded an exceptional
credit of €0.9m with respect to the Group’s receivables balances in the current financial year (FY2022: €7.9m) 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. The credit risk on advances to
customers can be reduced through the value of security and/or collateral given. In the 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
€0.4m (FY2022: credit of €5.5m) in this regard (note 5).
Trade receivables are on average receivable within 24 days (FY2022: 32 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.
C&C Group plc Annual Report 2023
199
15. TRADE & OTHER RECEIVABLES (continued)
The movement in the allowance for impairment in respect of trade receivables and advances to customers during the year was as follows:
Group
At beginning of year
Recovered during the year
Provided during the year
Derecognised on disposal
Written off during the year
Translation adjustment
At end of year
Trade receivables
Advance to
customers
2023
€m
10.4
(0.9)
2.2
(0.6)
(1.8)
(0.1)
9.2
2023
€m
7.4
(0.4)
-
(0.3)
(0.7)
(0.2)
5.8
Total
2023
€m
17.8
(1.3)
2.2
(0.9)
(2.5)
(0.3)
15.0
Total
2022
€m
27.7
(13.4)
4.6
(0.5)
(1.9)
1.3
17.8
At 28 February 2023, 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 €4.2m (FY2022: €5.7m) and expected lifetime losses of €10.8m
(FY2022: €12.1m).
16. ASSET HELD FOR SALE
During the current financial year, the Group completed the sale of its asset held for sale, Admiral Taverns, to Proprium Capital Partners
for a total consideration of €63.6m (£55.0m), realising a profit on disposal of €0.4m. In the prior financial year, the Group classified its
joint venture investment in Admiral Taverns as an asset held for sale as at 24 February 2022, with a value at the prior year end of €65.8m
(£55.0m).
17. TRADE & OTHER PAYABLES
Trade payables
Payroll taxes & social security
VAT
Excise duty
Accruals
Amounts due to Group undertakings
Total
Group
Company
2023
€m
241.3
4.1
17.6
28.7
79.0
-
2022
€m
206.8
6.5
32.3
46.2
94.3
-
370.7
386.1
2023
€m
-
-
-
-
2.0
53.6
55.6
2022
€m
-
-
-
-
2.9
49.7
52.6
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 2023, 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 GovernanceBusiness & StrategyFinancial Statements 200
Notes forming part of the financial statements
(continued)
18. PROVISIONS
At 1 March
Translation adjustment
Charged during the year
Released during the year
Utilised during the year
At end of year
Classified within:
Current liabilities
Non-current liabilities
Restructuring
Dilapidation
2023
€m
0.2
-
-
-
(0.2)
-
2023
€m
5.4
(0.2)
2.8
(2.6)
-
5.4
Other
2023
€m
6.5
(0.2)
0.9
(0.1)
(2.2)
4.9
Total
2023
€m
12.1
(0.4)
3.7
(2.7)
(2.4)
10.3
5.4
4.9
10.3
Total
2022
€m
12.7
0.3
3.1
(0.9)
(3.1)
12.1
8.2
3.9
12.1
Restructuring
Restructuring costs of €0.6m were incurred in prior year. These related to severance costs of €0.6m which were incurred with respect to
the restructuring of the Group as a consequence of the COVID-19 pandemic, €0.2m of which was outstanding at the end of the prior year.
During the current financial year €0.2m was paid with no costs outstanding at the year end.
Dilapidation
The Group has a dilapidation provision of €5.4m at 28 February 2023 (FY2022: €5.4m). During the current year €2.8m was incurred in
relation to leased depots in Scotland. During the year €2.6m was released in relation to leased depots in England: €1m of this was due to a
depot which is being vacated during FY2023 and €1.6m was in relation to several other depots in England where a new assessment was
conducted to update the existing provisions, as a result of which it was concluded that the existing provisions were in excess of what was
required. The Group’s dilapidation provision at 28 February 2023 is split between dilapidation costs for leased depots of €5.1m (FY2022:
€5.1m) and a €0.3m dilapidation provision for the leased fleet (FY2022: €0.3m).
Other
A significant proportion of the Other provision balance of €4.9m relates primarily to a provision with respect to lost kegs. During the year
additional costs were incurred in respect of legal disputes, and €2.2m was paid and €0.1m released in relation to these during the year.
C&C Group plc Annual Report 2023
201
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:
Leased right-of-use assets
At 1 March 2021, net carrying amount
Translation adjustment
Additions
Reclassification
Remeasurement
Disposals
Depreciation charge for the year
At 28 February 2022
Translation adjustment
Additions
Remeasurement
Disposals
Depreciation charge for the year
At 28 February 2023
Leased liabilities
At 1 March 2021, net carrying amount
Translation adjustment
Additions to lease liabilities
Reclassification
Remeasurement
Disposals
Payments*
Interest (discount unwinding)
At 28 February 2022
Translation adjustment
Additions to lease liabilities
Remeasurement
Disposals
Payments*
Interest (discount unwinding)
At 28 February 2023
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment
€m
€m
€m
30.3
1.1
0.4
-
7.2
-
(5.0)
34.0
(1.4)
5.0
(0.4)
-
(6.0)
31.2
0.9
-
-
3.1
(0.3)
-
(0.4)
3.3
(0.1)
0.1
(3.0)
-
(0.1)
0.2
33.5
1.3
22.7
(3.1)
(4.8)
(4.8)
(14.1)
30.7
(1.4)
21.8
3.2
(7.5)
(13.7)
33.1
Freehold land &
buildings
Plant &
machinery
Motor vehicles &
other equipment
€m
€m
€m
(43.0)
(1.8)
(0.4)
-
(6.5)
-
8.5
(1.6)
(44.8)
2.0
(5.0)
1.4
-
9.6
(1.9)
(38.7)
(0.8)
(0.2)
-
(3.1)
0.4
-
0.5
-
(3.2)
-
(0.1)
2.3
-
0.8
(0.1)
(0.3)
(35.8)
(1.2)
(22.7)
3.1
5.2
4.9
16.2
(1.7)
(32.0)
1.6
(21.8)
(4.1)
7.4
15.2
(1.1)
(34.8)
Total
€m
64.7
2.4
23.1
-
2.1
(4.8)
(19.5)
68.0
(2.9)
26.9
(0.2)
(7.5)
(19.8)
64.5
Total
€m
(79.6)
(3.2)
(23.1)
-
(0.9)
4.9
25.2
(3.3)
(80.0)
3.6
(26.9)
(0.4)
7.4
25.6
(3.1)
(73.8)
* Payments are apportioned between finance charges €3.1m (FY2022: €3.3m) and payment of lease liabilities €22.5m (FY2022: €21.9m) in the Cash Flow Statement
Corporate GovernanceBusiness & StrategyFinancial Statements 202
Notes forming part of the financial statements
(continued)
19. LEASES (continued)
Lease liabilities classified within:
Current liabilities
Non-current liabilities
Total
2023
€m
(16.7)
(57.1)
(73.8)
Total
2022
€m
(20.2)
(59.8)
(80.0)
The table below shows a maturity analysis of the discounted and undiscounted lease liability arising from the Group’s leasing activities.
These 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.
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
As at 28 February 2023
As at 28 February 2022
Discounted
Undiscounted
Discounted
Undiscounted
€m
(16.7)
(13.7)
(11.9)
(8.3)
(5.9)
(17.3)
(73.8)
€m
(19.4)
(15.8)
(13.5)
(9.5)
(6.8)
(18.7)
(83.7)
€m
(20.2)
(14.7)
(11.9)
(10.4)
(7.0)
(15.8)
(80.0)
€m
(23.1)
(16.9)
(13.5)
(11.6)
(7.9)
(18.4)
(91.4)
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria for
accounting for them under IFRS 16 Leases are met. The following lease costs have been charged to the Income Statement as incurred:
Expense relating to short-term leases (included in operating costs)
Total
20. INTEREST BEARING LOANS & BORROWINGS
Current liabilities
Unsecured loans repayable by one repayment on maturity
Unsecured loans repayable by instalment
Private Placement notes repayable by instalment
Non-current liabilities
Unsecured loans repayable by one repayment on maturity
Private Placement notes repayable by instalment
Private Placement notes repayable by one repayment on maturity
Total borrowings
2023
€m
1.1
1.1
Group
Company
2023
€m
-
0.7
0.1
0.8
-
0.6
2023
€m
(95.0)
0.7
0.1
(94.2)
-
0.6
(100.6)
(100.0)
(194.2)
2022
€m
0.7
(37.4)
0.1
(36.6)
(75.0)
-
(144.4)
(219.4)
(256.0)
2022
€m
1.5
1.5
2022
€m
0.7
0.1
0.1
0.9
1.0
-
(100.6)
(100.0)
(99.2)
(144.4)
(143.4)
(142.5)
C&C Group plc Annual Report 2023
203
20. INTEREST BEARING LOANS & BORROWINGS (continued)
Group and Company
Outstanding borrowings of the Group and Company are net of unamortised issue costs. During FY2020, 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 2023 was
€1.4m (FY2022: €2.9m) of which €0.8m (FY2022: €0.9m) is netted against current liabilities and €0.6m (FY2022: €2.0m) is netted against
non-current liabilities.
Terms and debt repayment schedule
Group
Currency
Nominal rates of interest at 28
February 2023
Year of maturity
2023
Carrying value
2022
Carrying value
€m
€m
Unsecured loans repayable by one repayment
on maturity
Multi
Euribor/Sonia + 2.4%
Unsecured loans repayable by instalment
Euro
Euribor + 2.85%
2024
2022
Private Placement notes repayable by one
repayment on maturity
Euro/GBP
1.6%-2.74%
2030/2032
95.0
-
100.6
195.6
76.0
37.5
145.4
258.9
Company
Private Placement notes repayable by one
repayment on maturity
Currency
Nominal rates of interest at 28
February 2023
Year of maturity
2023
Carrying value
€m
2022
Carrying value
€m
Euro/GBP
1.6%-2.74%
2030/2032
100.6
100.6
145.4
145.4
Borrowing facilities
Group
The Group manages its borrowing requirements by entering into committed loan facility agreements. It also holds 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. During FY2023,
Ulster Bank left the syndicate, following the sale of their Irish commercial loan book to Allied Irish Bank; however the facility remains
unchanged at €450m. In FY2021, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders
and the last instalment was paid on 12 July 2022.
The Group has successfully negotiated and completed a refinancing of the current multi-currency facility agreement which will be
repayable in a single instalment following the publication of the Group’s FY2023 Results, at which point the new facility will begin. The
Group will enter into a new five-year committed sustainability-linked facility comprised of a €250m multi-currency revolving loan facility
and a €100m non-amortising Euro term loan, both with a maturity of FY2028. The facility offers optionality of two 1-year extensions to the
maturity date callable within 12 months and 24 months of initial drawdown respectively. Both the multi-currency facility and the Euro term
loan were negotiated with six banks - namely ABN Amro Bank, Allied Irish Bank, Bank of Ireland, Barclays Bank, HSBC and Rabobank.
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. Following the disposal of Admiral Taverns
in May 2022 for £55.0m, the first two of three tranches of proceeds of €42.8m (£36.7m) were received in August 2022. A condition of
the negotiated waiver agreement (which ceased in October 2022) was that these proceeds were made available to USPP noteholders to
divest. With noteholders divesting in November 2022, the subsequent new holding as at 28 February 2023 is €100.6m (FY2022: €145.4m).
This waiver condition ceased with the publication of the Group’s Condensed Consolidated Interim Financial Statements in October 2022,
and the third and final tranche of Admiral proceeds of €20.8m (£18.3m) received in February 2023 was fully retained by the business.
Corporate GovernanceBusiness & StrategyFinancial Statements
204
Notes forming part of the financial statements
(continued)
20. INTEREST BEARING LOANS & BORROWINGS (continued)
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. These conditions are mirrored in the new
multi-currency facility and the Euro term loan, which will go live in FY2024.
Under the terms of the USPP, the Group pays a margin of 1.6% with respect to €13.4m FY2023 (FY2022: €19.0m) USPP notes with a 10-
year tenure; 1.73% with respect to €40.4m (FY2022: €57.0m) USPP notes with a 12 year tenure and 2.74% with respect to £41.1m (FY2022:
£58.0m) notes with a 10 year tenure. A fee is payable where Group EBITDA is below €120.0m and a below investment grade fee payable
when the Group’s credit rating is below investment grade. These fees will remain applicable until the conditions are met and total 1.50%.
The current and future multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility upon approval from the Group’s banking syndicate.
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 2023 are repayable in full on change of control of the Group.
The Group considers the refinancing of its multi-currency facility to be a post balance sheet event, as described in Note 30.
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 multi-currency revolving credit facility drawn debt at 28 February 2023.
The Company is a borrower with respect to the Group’s USPP notes of €100.6m (FY2022: €145.4m) as at 28 February 2023. Under the
terms of the USPP, the Company pays a margin of 1.6% with respect to €13.4m USPP notes (FY2022: €19.0m) with a 10 year tenure;
1.73% with respect to €40.4m FY2023 (FY2022: €57.0m) USPP notes with a 12 year tenure and 2.74% with respect to £41.1m (FY2022:
£58.0m) notes with a 10 year tenure. A fee is payable where Group EBITDA is below €120.0m and a below investment grade fee payable
when the Group’s credit rating is below investment grade. These fees will remain applicable until the conditions are met and total 1.50%.
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; however, given strong return of trading on re-opening, the Group successfully exited waivers early with
its bank syndicate in June 2022, returning to normal covenants at pre-COVID-19 levels. With regard to the new facility, which will go live in
FY2024, the Group has agreed the same covenants as the previous agreement with the Group’s lending group.
The Group’s 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.
C&C Group plc Annual Report 2023 205
21. ANALYSIS OF NET DEBT
Group
Interest bearing loans & borrowings
Cash
Net debt excluding leases
Lease liabilities (note 19)
Net debt including leases
1 March 2022
€m
Translation
adjustment
€m
Additions/
disposals/
remeasurement
Cash Flow, net
€m
€m
Non-cash
changes
€m
28 February 2023
€m
(256.0)
64.7
(191.3)
(80.0)
(271.3)
3.3
(1.3)
2.0
3.6
5.6
-
-
-
(19.9)
(19.9)
60.0
51.9
111.9
25.6
137.5
(1.5)
-
(1.5)
(3.1)
(4.6)
(194.2)*
115.3
(78.9)
(73.8)
(152.7)
*
Interest bearing loans & borrowings at 28 February 2023 are net of unamortised issue costs of €1.4m.
Group
Interest bearing loans & borrowings
Cash
Net debt excluding leases
Lease liabilities (note 19)
Net debt including leases
1 March 2021
€m
Translation
adjustment
€m
Additions/
disposals/
remeasurement
Cash Flow, net
€m
€m
Non-cash
changes
€m
28 February 2022
€m
(470.0)
107.7
(362.3)
(79.6)
(441.9)
(7.2)
2.5
(4.7)
(3.2)
(7.9)
-
-
-
(19.1)
(19.1)
222.2
(45.5)
176.7
25.2
201.9
(1.0)
-
(1.0)
(3.3)
(4.3)
(256.0)*
64.7
(191.3)
(80.0)
(271.3)
*
Interest bearing loans & borrowings at 28 February 2022 are net of unamortised issue costs of €2.9m.
Company
Interest bearing loans & borrowings
Cash
1 March 2022
Translation
adjustment
Cash Flow, net
changes 28 February 2023
Non-cash
€m
€m
€m
€m
€m
(142.5)
0.1
(142.4)
3.2
-
3.2
41.6
0.1
41.7
(1.5)
(99.2)*
-
(1.5)
0.2
(99.0)
*
Interest bearing loans & borrowings at 28 February 2023 are net of unamortised issue costs of €1.4m.
Company
Interest bearing loans & borrowings
Cash
1 March 2021
€m
Translation
adjustment
€m
(144.4)
0.7
(143.7)
(3.0)
-
(3.0)
Cash Flow, net
€m
5.9
(0.6)
5.3
Non-cash
changes
€m
28 February 2022
€m
(1.0)
-
(1.0)
(142.5)*
0.1
(142.4)
*
Interest bearing loans & borrowings at 28 February 2022 are net of unamortised issue costs of €2.9m.
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 €1.5m (FY2022: €1.0m). The non-cash changes for the Group’s lease liabilities in the current financial year relate
to lease interest/discount unwinding of €3.1m (FY2022: €3.3m) – see note 19.
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 2023.
Corporate GovernanceBusiness & StrategyFinancial Statements
206
Notes forming part of the financial statements
(continued)
22. RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
Group
Property, plant & equipment
Intangible assets
Retirement benefits
Trade related items & losses
Assets
€m
2.6
7.4
0.4
14.6
25.0
2023
Liabilities
€m
(15.2)
(9.7)
(6.1)
(3.2)
(34.2)
Net
(liabilities)/assets
€m
Assets
€m
(12.6)
(2.3)
(5.7)
11.4
(9.2)
2.6
7.2
0.2
17.0
27.0
2022
Liabilities
€m
(12.8)
(9.4)
(6.3)
(1.7)
(30.2)
Net
(liabilities)/assets
€m
(10.2)
(2.2)
(6.1)
15.3
(3.2)
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.
€14.9m (FY2022: €16.5m) of deferred tax assets have been recognised at the end of FY2023 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.
In addition, 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 €42.5m (FY2022: €43.1m). 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 2023 or at 28 February 2022.
Analysis of movement in net deferred tax (liabilities)/assets
Group
Property, plant & equipment: ROI
Property, plant & equipment: other
Trade related items & losses
Intangible assets
Retirement benefits
1 March 2022
Recognised in
Income Statement
Recognised
in Other
Comprehensive
Income
Translation
adjustment
€m
€m
€m
(0.2)
(10.0)
15.3
(2.2)
(6.1)
(3.2)
(1.7)
(0.9)
(3.6)
0.2
0.2
(5.8)
-
0.3
-
-
0.1
0.4
€m
-
(0.1)
(0.3)
(0.3)
0.1
(0.6)
28 February 2023
€m
(1.9)
(10.7)
11.4
(2.3)
(5.7)
(9.2)
C&C Group plc Annual Report 2023
207
22. RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES (continued)
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 €0.7m credit to the P&L (FY2022: €0.1m charge) and a
charge to OCI of €nil (FY2022: €0.5m).
1 March 2021
€m
Recognised in
Income Statement
Recognised in Other
Comprehensive
Income
€m
€m
Translation
adjustment
€m
28 February 2022
€m
0.4
(7.0)
16.5
(0.8)
(1.8)
7.3
(0.6)
(2.2)
(1.5)
(1.4)
-
(5.7)
-
(0.6)
-
-
(4.3)
(4.9)
-
(0.2)
0.3
-
-
0.1
(0.2)
(10.0)
15.3
(2.2)
(6.1)
(3.2)
Group
Property, plant & equipment: ROI
Property, plant & equipment: other
Trade related items & losses
Intangible assets
Retirement benefits
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 (FY2022: no active members). There are 50
active members, representing less than 10% of total membership, in the ROI Staff defined benefit pension scheme (FY2022: 51 active
members) and 2 active members in the NI defined benefit pension scheme (FY2022: 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.
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 committed to contributions of €418,000 per annum commencing in calendar year 2021 and increasing at a
rate of 1.4% each calendar 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.
Corporate GovernanceBusiness & StrategyFinancial Statements
208
Notes forming part of the financial statements
(continued)
23. RETIREMENT BENEFITS (continued)
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 IAS 19 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:
Future life expectations at age 65
ROI
NI
2023
2022
2023
2022
No. of years
No. of years
No. of years
No. of years
Current retirees – no allowance for future improvements
Male
22.6-23.5
22.5-23.3
Female
24.4-25.3
24.2-25.1
Future retirees – with allowance for future improvements
Male
23.4-24.2
23.2-24.1
Female
25.3-26.2
25.2-26.0
22.4
24.2
24.0
26.0
22.4
24.2
24.0
26.0
Scheme liabilities
The average age of active members is 53 and 50 years (FY2022: 51 and 50 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 12 to 17 years (FY2022: 13 to 22 years).
C&C Group plc Annual Report 2023
209
23. RETIREMENT BENEFITS (continued)
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 2023 and 28 February 2022 are as follows:
Salary increases
Increases to pensions in payment
Discount rate
Inflation rate
2023
2022
ROI
NI
ROI
0.0%-2.6%
3.6% 0.0%-2.6%
2.6%
4.3%
2.6%
1.8%
2.0%
5.0% 1.8%-2.0%
3.2%
1.6%-1.7%
NI
4.0%
2.0%
2.6%
3.6%
A reduction in discount rate used to value the schemes’ liabilities by 0.25% would increase the valuation of liabilities by €4.8m (FY2022:
€6.9m) while an increase in inflation/salary increase expectations of 0.25% would increase the valuation of liabilities by €4.7m (FY2022:
€7.4m). 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 IAS 19 Employee Benefits.
(a) Impact on Income Statement
Analysis of defined benefit pension
expense:
Current service cost
Interest cost on scheme liabilities
Interest income on scheme assets
ROI
€m
(0.6)
(3.1)
3.7
2023
NI
€m
-
(0.2)
0.3
Total
€m
(0.6)
(3.3)
4.0
Total income/(expense) recognised in Income
Statement
-
0.1
0.1
Analysis of amount recognised in Other Comprehensive Income:
Actual return on scheme assets
Expected interest income on scheme assets
Experience gains and losses on scheme
liabilities
Effect on changes in financial assumptions
Effect of changes in demographic
assumptions
Total income/(expense)
Scheme assets
Scheme liabilities
Deficit in scheme
Surplus in scheme
ROI
€m
(24.8)
(3.7)
(3.9)
39.3
-
6.9
164.3
(125.7)
-
38.6
2023
NI
€m
(5.1)
(0.3)
(0.3)
3.1
-
(2.6)
8.5
(4.9)
-
3.6
Total
€m
(29.9)
(4.0)
(4.2)
42.4
-
4.3
172.8
(130.6)
-
42.2
ROI
€m
(0.7)
(2.6)
2.6
(0.7)
ROI
€m
13.4
(2.6)
12.2
5.9
2.9
31.8
195.1
(164.0)
-
31.1
2022
NI
€m
-
(0.2)
0.2
-
2022
NI
€m
0.7
(0.2)
-
0.3
0.2
1.0
14.4
(7.9)
-
6.5
Total
€m
(0.7)
(2.8)
2.8
(0.7)
Total
€m
14.1
(2.8)
12.2
6.2
3.1
32.8
209.5
(171.9)
-
37.6
Corporate GovernanceBusiness & StrategyFinancial Statements
210
Notes forming part of the financial statements
(continued)
23. RETIREMENT BENEFITS (continued)
(b) Impact on Balance Sheet
The retirement benefits surplus at 28 February 2023 and 28 February 2022 is analysed as follows:
Analysis of net pension surplus:
Investments quoted in active markets
Bid value of assets at end of year:
Equity*
Bonds
Alternatives
Cash
Investments unquoted
Property
ROI
€m
31.2
111.6
8.2
0.5
12.8
164.3
2023
NI
€m
1.2
7.3
-
-
-
8.5
Total
€m
ROI
€m
32.4
118.9
8.2
35.7
120.9
23.1
0.5
2.4
12.8
172.8
13.0
195.1
2022
NI
€m
2.9
11.4
-
0.1
-
14.4
Total
€m
38.6
132.3
23.1
2.5
13.0
209.5
Actuarial value of scheme liabilities
(125.7)
(4.9)
(130.6)
(164.0)
(7.9)
(171.9)
Deficit in the scheme
Surplus in the scheme
Surplus/(deficit) in the scheme
Related deferred tax liability (note 22)
Net pension surplus/(deficit)
-
38.6
38.6
(4.8)
33.8
-
3.6
3.6
(1.3)
2.3
-
42.2
42.2
(6.1)
36.1
-
31.1
31.1
(4.0)
27.1
-
6.5
6.5
(2.1)
4.4
-
37.6
37.6
(6.1)
31.5
*The defined benefit pension schemes have a passive self-investment in C&C Group plc of €nil (FY2022: €nil).
The alternative investment category includes investments in various asset classes including equities, commodities, currencies and funds.
The investments are managed by fund managers.
Reconciliation of scheme assets
Assets at beginning of year
Movement in year:
Translation adjustment
Expected interest income on scheme assets
ROI
€m
195.1
-
3.7
Actual return less interest income on scheme assets
(28.5)
Employer contributions
Member contributions
Other movements
Benefit payments
Assets at end of year
0.5
0.1
0.1
(6.7)
164.3
2023
NI
€m
14.4
(0.6)
0.3
(5.4)
-
-
-
(0.2)
8.5
Total
€m
209.5
(0.6)
4.0
(33.9)
0.5
0.1
0.1
(6.9)
172.8
ROI
€m
187.1
-
2.6
10.8
0.4
0.2
-
(6.0)
195.1
2022
NI
€m
13.7
0.6
0.2
0.5
-
-
-
(0.6)
14.4
Total
€m
200.8
0.6
2.8
11.3
0.4
0.2
-
(6.6)
209.5
The expected employer contributions to fund defined benefit scheme obligations for year ending 28 February 2024 is €0.5m.
C&C Group plc Annual Report 2023
211
23. RETIREMENT BENEFITS (continued)
The scheme assets had the following investment profile at the year end:
2023
2022
ROI
NI
ROI
NI
Investments quoted in active markets
Equities
Bonds
Alternatives
Cash
Investments unquoted
Property
19%
68%
5%
-
8%
100%
14%
86%
-
-
-
100%
18%
62%
12%
1%
7%
100%
Reconciliation of actuarial value of scheme liabilities
Liabilities at beginning of year
Movement in year:
Translation adjustment
Current service cost
Interest cost on scheme liabilities
Member contributions
Actuarial gain immediately recognised in equity
Benefit payments
Liabilities at end of year
ROI
€m
164.0
-
0.6
3.1
0.1
(35.4)
(6.7)
125.7
2023
NI
€m
7.9
(0.2)
-
0.2
-
(2.8)
(0.2)
4.9
Total
€m
171.9
(0.2)
0.6
3.3
0.1
(38.2)
(6.9)
130.6
ROI
€m
187.5
-
0.7
2.6
0.2
(21.0)
(6.0)
164.0
2022
NI
€m
8.4
0.4
-
0.2
-
(0.5)
(0.6)
7.9
20%
80%
-
-
-
100%
Total
€m
195.9
0.4
0.7
2.8
0.2
(21.5)
(6.6)
171.9
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 2023/28 February 2022 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 closely these and all other
financial risks faced by the Group.
Corporate GovernanceBusiness & StrategyFinancial Statements
212
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
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 and interest rate risk sections for further details.
(b) Financial assets and liabilities
The carrying and fair values of financial assets and liabilities by measurement category were as follows:
Financial assets Financial liabilities
Carrying value
Fair value
€m
€m
€m
€m
Group
28 February 2023
Financial assets:
Cash*
Trade receivables*
Advances to customers*
Derivative contracts**
Financial liabilities:
Interest bearing loans & borrowings*
Trade & other payables*
Provisions*
* At amortised cost
** Derivatives designated as hedging instruments
Group
28 February 2022
Financial assets:
Cash*
Trade receivables*
Advances to customers*
Financial liabilities:
Interest bearing loans & borrowings*
Derivative contracts**
Trade & other payables*
Provisions*
* At amortised cost
** Derivatives designated as hedging instruments
115.3
125.6
41.9
1.1
-
-
-
283.9
-
-
-
-
(194.2)
(370.7)
(10.3)
(575.2)
115.3
125.6
41.9
1.1
(194.2)
(370.7)
(10.3)
(291.3)
115.3
125.6
41.9
1.1
(195.6)
(370.7)
(10.3)
(292.7)
Financial assets Financial liabilities
Carrying value
Fair value
€m
€m
€m
€m
64.7
147.5
43.0
-
-
-
-
255.2
-
-
-
(256.0)
(0.1)
(386.1)
(12.1)
(654.3)
64.7
147.5
43.0
(256.0)
(0.1)
(386.1)
(12.1)
(399.1)
64.7
147.5
43.0
(258.9)
(0.1)
(386.1)
(12.1)
(402.0)
C&C Group plc Annual Report 2023 213
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Company
28 February 2023
Financial assets:
Cash*
Amounts due from Group undertakings*
Financial liabilities:
Interest bearing loans & borrowings*
Amounts due to Group undertakings*
Accruals*
* At amortised cost
Company
28 February 2022
Financial assets:
Cash*
Amounts due from Group undertakings*
Financial liabilities:
Interest bearing loans & borrowings*
Amounts due to Group undertakings*
Accruals*
* At amortised cost
Financial assets Financial liabilities
Carrying value
Fair value
€m
€m
€m
€m
0.2
285.1
-
-
0.2
285.1
0.2
285.1
-
-
-
(99.2)
(53.6)
(2.0)
285.3
(154.8)
(99.2)
(53.6)
(2.0)
130.5
(100.6)
(53.6)
(2.0)
129.1
Financial assets Financial liabilities
Carrying value
Fair value
€m
€m
€m
€m
0.1
114.7
-
-
-
114.8
-
-
0.1
114.7
0.1
114.7
(142.5)
(49.7)
(2.9)
(195.1)
(142.5)
(49.7)
(2.9)
(80.3)
(145.4)
(49.7)
(2.9)
(83.2)
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 (Level 2).
Corporate GovernanceBusiness & StrategyFinancial Statements
214
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
(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 2023 the Group had €11.5m of
forward foreign currency cash flow hedges outstanding (FY2022: €22.2m).
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.
Derivatives
Cash flow hedges – currency forwards
Total
2023
€m
0.1
0.1
2022
€m
(0.1)
(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.
Hedging reserves – currency hedges
Opening balance 1 March
Change in fair value of hedging recognised in Other Comprehensive Income for the year
Closing balance 28 February – continuing currency hedges
2023
€m
(0.1)
0.1
-
2022
€m
-
(0.1)
(0.1)
C&C Group plc Annual Report 2023
215
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
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 2023 is as
follows:
Group
Cash
Trade receivables
Advances to customers
Interest bearing loans & borrowings
Lease liabilities
Trade & other payables
Provisions
Gross currency exposure
Company
Cash
Interest bearing loans & borrowings
Net amounts due to Group undertakings
Accruals
Total
Euro
€m
2.5
2.4
-
(95.0)
-
Sterling
€m
4.7
2.4
-
(46.8)
(0.2)
USD
€m
7.1
1.2
-
-
-
AUD
€m
1.6
1.0
-
-
-
(16.4)
(14.9)
(2.5)
(0.2)
-
(0.7)
(106.5)
(55.5)
-
5.8
-
2.4
NZD
€m
0.2
0.1
-
-
-
(1.3)
-
(1.0)
SGD
€m
Not at risk
€m
Total
€m
0.1
-
-
-
-
-
-
99.1
118.5
41.9
115.3
125.6
41.9
(52.4)
(194.2)
(73.6)
(73.8)
(335.4)
(370.7)
(9.6)
(10.3)
0.1
(211.5)
(366.2)
Sterling
€m
Not at risk
€m
-
(46.8)
14.8
(1.0)
(33.0)
0.2
(52.4)
216.7
(1.0)
163.5
Total
€m
0.2
(99.2)
231.5
(2.0)
130.5
Corporate GovernanceBusiness & StrategyFinancial Statements
216
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
The currency profile of the Group and Company’s financial instruments subject to transactional exposure as at 28 February 2022 is as
follows:
Group
Cash
Trade receivables
Advances to customers
Interest bearing loans & borrowings
Lease liabilities
Trade & other payables
Provisions
Gross currency exposure
Company
Cash
Interest bearing loans & borrowings
Net amounts due to Group undertakings
Accruals
Total
Euro
€m
Sterling
€m
USD
€m
CAD/AUD
€m
5.7
3.5
-
-
-
2.3
0.1
-
-
-
(13.7)
(14.5)
-
(4.5)
-
(12.1)
3.3
1.4
-
-
-
(3.1)
-
1.6
0.3
0.4
-
-
-
(0.3)
-
0.4
NZD
€m
0.1
0.2
-
-
-
(1.1)
-
(0.8)
SGD
€m
Not at risk
€m
Total
€m
64.7
147.5
43.0
52.9
141.9
43.0
(256.0)
(256.0)
(80.0)
(80.0)
(353.4)
(386.1)
(12.1)
(12.1)
0.1
-
-
-
-
-
-
0.1
(463.7)
(479.0)
Sterling
€m
-
-
20.0
(1.2)
18.8
Not at risk
€m
0.1
(142.5)
45.0
(1.7)
(99.1)
Total
€m
0.1
(142.5)
65.0
(2.9)
(80.3)
A 10% strengthening in the Euro against all currencies noted above, based on outstanding financial assets and liabilities at 28 February
2023, would have a €4.4m positive impact (FY2022: €1.4m) on the Income Statement. A 10% weakening in the Euro against all currencies
noted above would have a €5.4m negative effect (FY2022: €1.7m) on the Income Statement. This analysis assumes that all other variables,
in particular interest rates, remain constant.
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:
Variable/fixed rate instruments
Interest bearing loans & borrowings
Cash
Group
Company
2023
€m
(195.6)
115.3
(80.3)
2022
€m
(258.9)
64.7
(194.2)
2023
€m
(100.6)
0.2
(100.4)
2022
€m
(145.4)
0.1
(145.3)
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 (FY2022: €0.1m) impact on the Income Statement, over the duration of the tenure, with respect to the
interest charge on interest bearing loans & borrowings.
The Group is exposed to interest rate risk in relation to its €450m multi-currency interest bearing revolving credit facility. With the Group’s
USPP notes, there is a portion of long-term debt obligations where the interest is fixed for the duration of the facilities and not subject
to changes in Euribor and Sonia rates. Interest rate exposures for the Group are managed and controlled centrally. The Group seeks to
minimise its interest rate exposure by assessing and executing hedging strategies in a non-speculative manner, in line with Group policy
and at a reasonable cost when economically viable to do so.
C&C Group plc Annual Report 2023
217
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
As at 28 February 2023, C&C Group had a portion of its interest rate risk hedged with the objective to manage risk of the Group’s long-
term exposure to interest rates and in line with C&C Group Policy. With rising interest rate environment, coming from both the European
Central Bank and Bank of England, following recent history of modest or negative interest rates, the Group executed a €60m three-year
Euro interest rate hedge against Euro debt facilities exposed to EURIBOR fluctuations. The hedge was executed in line with the Group
guardrails and ensures that 82% of the Group’s interest-bearing loans and borrowings as at 28 February 2023 are now either hedged or
fixed through the USPP notes. The USPP notes were issued in March 2020 with a fixed interest rate for Euro and GBP notes, the notes
have maturity dates ranging from 2030 to 2032.
Derivatives
Cash flow hedges – interest rate
Total
2023
€m
1.1
1.1
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.
Hedging reserves – interest rate hedges
Opening balance 1 March
Change in fair value of hedging recognised in Other Comprehensive Income for the year
Closing balance 28 February – continuing interest rate hedges
2023
€m
-
1.1
1.1
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 interest rates, 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 interest rates, ineffectiveness might arise on the sale of the business or repayment of debt which would impact hedged item.
No ineffectiveness was recognised in the Income Statement in the current or prior financial year.
(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.
Corporate GovernanceBusiness & StrategyFinancial Statements
218
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Generally, individual ‘risk limits’ are set on a customer-by-customer basis 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 or 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 2023, the Group’s year end cash had benefited by €94.1m (FY2022:
€84.1m) 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 its right to take possession of any
material collateral that would require disclosure. At 28 February 2023, the Group held collateral of €0.8m (FY2022: €1.3m) on financial
assets that are credit impaired and recognised no expected credit loss on financial assets of €7.2m (FY2022: €6.3m) due to collateral.
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
Consolidated 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:
Trade receivables
Advances to customers
Amounts due from Group undertakings
Cash
Group
Company
2023
€m
125.6
41.9
-
115.3
282.8
2022
€m
147.5
43.0
-
64.7
255.2
2023
€m
-
-
285.1
0.2
285.3
2022
€m
-
-
114.7
0.1
114.8
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.
C&C Group plc Annual Report 2023
219
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
(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 cash
projections; and (c) keeps refinancing options under review. In addition, the Group maintains an overdraft facility that is unsecured.
Cash and liquidity have continued to be a key focus for the Group throughout FY2023.
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.
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. During FY2023,
Ulster Bank left the syndicate, following the sale of their Irish commercial loan book to Allied Irish Bank, however the facility remains
unchanged at €450m. In FY2021, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders
and the last instalment was paid on 12 July 2022.
The Group has successfully negotiated and completed a refinancing of the current multi-currency facility agreement which will be
repayable in a single instalment following the announcement of the Group’s FY2023 Results, at which point the new facility will begin. The
Group will enter into a new five-year committed sustainability-linked facility comprised of a €250m multi-currency revolving loan facility
and a €100m non-amortising Euro term loan, both with a maturity of FY2028. The facility offers optionality of two 1-year extensions to the
maturity date callable within 12 months and 24 months of initial drawdown respectively. Both the multi-currency facility and the Euro term
loan were negotiated with six banks, namely ABN Amro Bank, Allied Irish Bank, Bank of Ireland, Barclays Bank, HSBC and Rabobank.
The multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion facility. At 28
February 2023 the Group had €95.0m drawn down from the term loan and multi-currency revolving facilities (FY2022: €113.5m), €100.6m
drawn down from Private Placement notes (FY2022: €145.4m) and €nil from its non-bank financial indebtedness
The Company and Group had no financial indebtedness in the form of non-bank debt.
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 2023 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.
The Group repaid €18.1m of tax deferrals to the Irish tax authorities in FY2023. For FY2024, €10.1m (£8.9m) remains to be repaid to the UK
tax authorities and there are €nil amounts remaining to be repaid to the Irish tax authorities.
Corporate GovernanceBusiness & StrategyFinancial Statements
220
Notes forming part of the financial statements
(continued)
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
The following are the contractual maturities of financial liabilities, including interest payments:
Carrying amount
flows 6 months or less
6 – 12 months
1 – 2 years
Contractual cash
Greater than 2
years
€m
€m
€m
€m
€m
€m
Group
2023
Interest bearing loans & borrowings
Trade & other payables
Lease liabilities
Provisions
(195.6)
(370.7)
(73.8)
(10.3)
(243.4)
(370.7)
(87.1)
(10.3)
0.1
(370.7)
(11.7)
(3.6)
Total contracted outflows
(650.4)
(711.5)
(385.9)
(4.3)
-
(11.1)
(1.7)
(17.1)
(2.7)
-
(10.9)
(5.1)
(18.7)
(9.3)
-
(13.5)
(0.3)
(23.1)
(5.3)
-
(16.3)
(1.1)
(22.7)
(229.9)
-
(50.8)
(4.7)
(285.4)
(246.0)
-
(48.3)
(3.9)
(298.2)
(256.0)
(386.1)
(80.0)
(12.1)
(734.2)
(294.6)
(386.1)
(86.3)
(12.1)
(779.1)
(40.6)
(386.1)
(10.8)
(2.0)
(439.5)
(100.6)
(121.0)
(53.6)
(2.0)
(53.6)
(2.0)
(156.2)
(176.6)
(142.5)
(49.7)
(2.9)
(195.1)
(173.5)
(49.7)
(2.9)
(226.1)
(1.9)
(53.6)
(2.0)
(57.5)
(1.6)
(49.7)
(2.9)
(54.2)
(1.9)
(3.7)
(113.5)
-
-
-
-
-
-
(1.9)
(3.7)
(113.5)
(1.6)
(3.2)
(167.1)
-
-
-
-
-
-
(1.6)
(3.2)
(167.1)
Group
2022
Interest bearing loans & borrowings
Trade & other payables
Lease liabilities
Provisions
Total contracted outflows
Company
2023
Interest bearing loans & borrowings
Amounts due to Group undertakings
Accruals
Total contracted outflows
2022
Interest bearing loans & borrowings
Amounts due to Group undertakings
Accruals
Total contracted outflows
C&C Group plc Annual Report 2023 221
Authorised
Number
Allotted and
called up
Number
800,000,000
402,007,212*
Authorised
Allotted and
called up
€m
8.0
€m
4.0
800,000,000
401,913,690**
8.0
4.0
800,000,000
320,480,164***
8.0
3.2
Allotted and called-up
Ordinary Shares
2023
‘000
2022
‘000
401,914
320,480
93
-
147
81,287
402,007*
401,914*
25. SHARE CAPITAL AND RESERVES
At 28 February 2023
Ordinary shares of €0.01 each
At 28 February 2022
Ordinary shares of €0.01 each
At 28 February 2021
Ordinary shares of €0.01 each
Inclusive of 10.2m (3%) treasury shares.
*
**
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
As at 1 March
Shares issued in respect of options exercised
Shares issued in Rights Issue
As at 28 February
*
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
No. of
shares
Consideration
€
Total
€m
Other Treasury Shares
No. of
shares
Consideration
€
Total
€m
Total Treasury Shares
Consideration
No. of
shares
Total
€
€m
As at 1 March 2022
1,644,942
3.83
6.3
9,025,000
3.29
29.7 10,669,942
3.37
36.0
Shares disposed of or transferred
to Participants
As at 28 February 2023
(511,121)
1,133,821
3.71
3.88
(1.9)
-
-
-
(511,121)
4.4
9,025,000
3.29
29.7 10,158,821
3.71
3.36
(1.9)
34.1
Ordinary Shares held by the
Trustee of the Employee Trust
Other Treasury Shares
No. of
shares
Consideration
Total
No. of
shares
Consideration
Total
€
€m
Total Treasury Shares
No. of
shares
Consideration
As at 1 March 2021
1,766,324
Shares disposed of or transferred to
Participants
As at 28 February 2022
(121,382)
1,644,942
€
3.85
3.71
3.83
€m
6.8
(0.5)
9,025,000
3.29
29.7 10,791,324
-
-
-
(121,382)
6.3
9,025,000
3.29
29.7 10,669,942
Total
€m
36.5
(0.5)
36.0
€
3.38
3.71
3.37
Corporate GovernanceBusiness & StrategyFinancial Statements
222
Notes forming part of the financial statements
(continued)
25. SHARE CAPITAL AND RESERVES (continued)
Nominal value – Treasury Shares
As at 1 March
Shares disposed of or transferred to
Participants
As at 28 February
No. of
shares
10,669,942
(511,121)
10,158,821
2023
Nominal
Value
€
0.01
No. of
shares
Total
€
106,699
10,791,324
2022
Nominal
Value
€
0.01
Total
€
107,913
0.01
0.01
(5,111)
(121,382)
101,588
10,669,942
0.01
0.01
(1,214)
106,699
Movements in the year ended 28 February 2023
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 2023 continue to be included in the treasury share reserve. During the financial year, 511,121
shares were sold by the Trustees and are no longer accounted for as treasury shares.
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 continued to be included in the treasury share reserve. During the prior financial year,
121,382 shares were sold by the Trustees and are no longer accounted for as treasury shares.
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.
During the prior financial year, the 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 prior year there was the exercise of share options equating to €0.4m.
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 2023 (FY2022: €1,048.2m).
The prior 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 prior year there was the exercise of share options equating to €0.4m.
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.
C&C Group plc Annual Report 2023 223
25. SHARE CAPITAL AND RESERVES (continued)
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 loss of €0.7m accounted for within the revaluation reserve via Other Comprehensive Income.
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 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.
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; maintain investor, creditor and market confidence; and 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, which the Group successfully completed 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.
Please refer to Note 20 for details of the Group’s loans and borrowings.
Subject to shareholder approval at the Annual General Meeting, the Directors have proposed a final dividend of 3.79 cent per share to
be paid on 21 July 2023 to ordinary shareholders registered at the close of business on 9 June 2023. No interim dividend was paid with
respect to FY2023; therefore, the Group’s full year dividend will amount to 3.79 cent per share. There is no scrip dividend alternative. Due
to the impact of COVID-19, total dividends for the prior financial year were €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.
Corporate GovernanceBusiness & StrategyFinancial Statements
224
Notes forming part of the financial statements
(continued)
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:
Contracted
Not contracted
2023
€m
5.3
13.7
19.0
2022
€m
2.8
14.2
17.0
The contracted capital commitments at 28 February 2023 are with respect of contracts that support the Group in achieving its
environmental targets and optimising its operational footprint.
(b) Other commitments
At the year end, the value of contracts placed for future expenditure was:
Payable in less than one year
Payable between 1 and 5 years
Payable greater than 5 years
2023
Apples
Glass
Marketing
Barley**
Aluminium
€m
3.1
3.4
6.7
13.2
€m
3.0
-
-
3.0
€m
3.5
4.5
-
8.0
€m
-
-
-
-
€m
0.4
-
-
0.4
Gas
€m
-
0.2
-
0.2
Total*
€m
10.0
8.1
6.7
24.8
* Commitment obligations range from between 1 year to 23 years.
** The commitments with respect to Barley were revised downwards to nil due to the favourable change in the open market price and consequently the option for the Group to
resell its commitment to the market.
Payable in less than one year
Payable between 1 and 5 years
Payable greater than 5 years
Apples**
Glass
Marketing
Barley***
Aluminium
2022
€m
4.4
8.9
6.0
19.3
€m
2.2
-
-
2.2
€m
3.1
5.9
-
9.0
€m
8.4
0.6
-
9.0
€m
2.8
-
-
2.8
Total*
€m
20.9
15.4
6.0
42.3
* Commitment obligations range from between 1 year to 24 years.
**
In the prior 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 prior 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.
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 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 2023. The actual loans outstanding for the Group at 28 February
2023 amounted to €195.6m (FY2022: €258.9m).
C&C Group plc Annual Report 2023
225
27. GUARANTEES AND CONTINGENCIES (continued)
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.
The resolution of uncertain tax positions, including those arising from ongoing Irish Revenue tax reviews, could vary from what the
Company and its subsidiaries has assumed, which could have an adverse effect on the business.
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 2023 and as a
result such subsidiaries are exempt from certain filing provisions.
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:
Net revenue
Trade & other receivables
Purchases
Trade & other payables
Loans
Joint ventures
Associates
2023
€m
0.4
0.5
0.7
0.1
1.3
2022
€m
1.3
0.5
0.9
0.1
1.5
2023
€m
0.3
-
0.6
0.1
0.7
2022
€m
0.5
-
0.5
-
0.9
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.
Corporate GovernanceBusiness & StrategyFinancial Statements
226
Notes forming part of the financial statements
(continued)
28. RELATED PARTY TRANSACTIONS (continued)
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.
Details of key management remuneration, charged to the Income Statement, are as follows:
Number of individuals
Salaries and other short-term employee benefits
Post-employment benefits
Equity settled share-based payment charge and related dividend accrual
Total
2023
Number
9
€m
2.0
0.1
1.6
3.7
2022
Number
10
€m
2.3
0.1
1.7
4.1
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 – who was the Group’s Chair until 7 July 2022 – 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
• The Group purchases from and sells stock to Britvic plc, of which Emer Finnan – who was a Non-Executive Director of the Group until 8
February 2023 – 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
FY2023 was €nil (FY2022: €nil).
(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:
Dividend income
Expenses paid on behalf of and recharged by subsidiary undertakings to the Company
Equity settled share-based payments for employees of subsidiary undertakings
Injection of cash funding and other movements with subsidiary undertakings
2023
€m
219.9
(3.2)
2.5
(52.8)
2022
€m
-
(2.8)
1.5
(16.9)
C&C Group plc Annual Report 2023
227
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS
Notes
Nature of business
Class of shares held as at 28 February
2023
(100% unless stated)
Trading subsidiaries
Incorporated and registered in Republic of Ireland
Bulmers Limited
C&C Financing DAC
(a) (l)
Cider
(b) (l) (m)
Financing company
Ordinary
Ordinary
C&C Group International Holdings Limited
(a) (l) (m)
Holding company
Ordinary & Convertible
C&C Group Irish Holdings Limited
(a) (l)
Holding company
C&C Group Sterling Holdings Limited
C&C (Holdings) Limited
C&C Management Services Limited
(b) (l)
(a) (l)
(a) (l)
Holding company
Holding company
Provision of management
services
Ordinary
Ordinary
Ordinary
6% Cumulative Preference,
5% Second Non-Cumulative
Preference & Ordinary Stock
C&C Finco Limited
(b) (l) (m)
Financing company
Cantrell & Cochrane Limited
Latin American Holdings Limited
M&J Gleeson & Co Unlimited Company
Tennent’s Beer Limited
The Annerville Financing Company Unlimited
Company
The Five Lamps Dublin Beer Company Limited
Wm. Magner Limited
Wm. Magner (Trading) Limited
(a) (l)
(b) (l)
(b) (l)
(a) (l)
(a) (l)
(b) (l)
(a) (l)
(a) (l)
Holding company
Holding company
Wholesale of drinks
Beer
Financing company
Beer
Cider
Financing company
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Bibendum Wine Ireland Limited
(b) (l) (o) Wine
Not applicable
Incorporated and registered in Northern Ireland
C&C Holdings (NI) Limited
Gleeson N.I. Limited
Tennent’s NI Limited
Incorporated and registered in England and Wales
Bibendum Group Limited
Bibendum PLB (Topco) Limited
C&C Management Services (UK) Limited
Magners GB Limited
Matthew Clark Bibendum (Holdings) Limited
Matthew Clark Bibendum Limited
Bibendum Off Trade Limited
The Orchard Pig Limited
(c)
(c)
(c)
(j)
(i)
(i)
(i)
(i)
(i)
(j)
(i)
Holding company
Wholesale of drinks
Cider and beer
Ordinary
Ordinary
Ordinary & 3.25% Cumulative
Preference
Holding company
Holding company
Provision of management
services
Cider and beer
Holding company
Wholesale of drinks
Wholesale of drinks
Cider
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Corporate GovernanceBusiness & StrategyFinancial Statements 228
Notes forming part of the financial statements
(continued)
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Notes
Nature of business
Class of shares held as at 28 February
2023
(100% unless stated)
Walker & Wodehouse Wines Limited
C&C IP UK Limited
The Wondering Wine Company Limited
Incorporated and registered in Scotland
Badaboom Limited
Macrocom (1018) Limited
Tennent Caledonian Breweries UK Limited
Tennent Caledonian Breweries Wholesale Limited
Wallaces Express Limited
Wellpark Financing Limited
Incorporated and registered in Luxembourg
C&C IP Sàrl
C&C IP (No. 2) Sàrl
C&C Luxembourg Sàrl
Incorporated and registered Portugal
Frutíssima - Concentrados de Frutos da Cova da
Beira, Lda
Frontierlicious Limitada
Incredible Prosperity Limitada
Incorporated and registered in Delaware, US
Vermont Hard Cider Company Holdings, Inc.
Wm. Magner, Inc.
Incorporated and registered in Singapore
(j)
(i)
(i)
(d)
(d)
(d)
(d)
(d)
(d)
(e)
(e)
(e)
(f)
(f)
(f)
(g)
(g)
Wine
Licensing activity
Wine
Marketing
Investment
Beer and cider
Wholesale of drinks
Holding company
Financing company
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Licensing activity
Licensing activity
Class A to J Units
Class A to J Units
Holding and financing company
Class A to J Units
Ingredients
Orchard management
Orchard management
Ordinary
Ordinary
Ordinary
Holding company
Cider
Common Stock
Common Stock
C&C International (Asia) Pte. Ltd.
(h) (o)
Sales & Marketing
Not applicable
Non-trading subsidiaries
Incorporated and registered in Republic of Ireland
C&C Brands Limited
(a) (l)
Non-trading
Ordinary
C&C Group plc Annual Report 2023 229
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Notes
Nature of business
Class of shares held as at 28 February
2023
(100% unless stated)
C&C Gleeson Group Pension Trust Limited
(b) (l) (o)
Non-trading
C&C Group Pension Trust Limited
(a) (l)
Non-trading
C&C Group Pension Trust (No. 2) Limited
(a) (l) (o)
Non-trading
C&C Profit Sharing Trustee Limited
Ciscan Net Limited
Cooney & Co. Unlimited Company
Cravenby Limited
(a) (l)
(a) (l)
Non-trading
Non-trading
(b) (l) (o)
Non-trading
(a) (l)
Non-trading
Crystal Springs Water Company Limited
(b) (l) (o)
Non-trading
Dowd’s Lane Brewing Company Limited
(a) (l)
Non-trading
Edward and John Burke (1968) Limited
(a) (l) (o)
Non-trading
Findlater (Wine Merchants) Limited
Fruit of the Vine Limited
Gleeson Logistic Services Limited
Gleeson Wines & Spirits Limited
Greensleeves Confectionery Limited
(a) (l)
(a) (l)
Non-trading
Non-trading
(b) (l) (o)
Non-trading
(b) (l)
(b) (l)
Non-trading
Non-trading
M.& J. Gleeson (Investments) Limited
M&J Gleeson Nominees Limited
M. and J. Gleeson (Manufacturing) Company u.c.
M and J Gleeson (Manufacturing) Company Holdings
Limited
(b) (l)
(b) (l)
(b) (l)
(b) (l)
Non-trading
Non-trading
Non-trading
Non-trading
M and J Gleeson and Company Holdings Limited
(b) (l)
Non-trading
M & J Gleeson Property Development Limited
(b) (l) (o)
Non-trading
Magners Irish Cider Limited
Sceptis Limited
Showerings (Ireland) Limited
Tennmel Limited
Thwaites Limited
Tipperary Natural Mineral Water Company Holdings
Limited
Tipperary Natural Mineral Water (Sales) Holdings
Limited
(a) (l)
(a) (l)
(a) (l)
Non-trading
Non-trading
Non-trading
(b) (l) (o)
Non-trading
(a) (l)
(b) (l)
Non-trading
Non-trading
Not applicable
Ordinary
Not applicable
Ordinary
Ordinary & A Ordinary
Not applicable
Ordinary
Not applicable
Ordinary
Not applicable
Ordinary & A Ordinary
Ordinary
Not applicable
Ordinary
Ordinary, 12% Cumulative
Convertible Redeemable
Preference & 3% Cumulative
Redeemable Convertible
Preference
Ordinary
Ordinary & Preference
Ordinary
Ordinary & Non-Voting
Ordinary
Ordinary
Not applicable
Ordinary
Ordinary
Ordinary
Not applicable
A & B Ordinary
Ordinary
(b) (l)
Non-trading
Ordinary
Tipperary Pure Irish Water Unlimited Company
(a) (l)
Non-trading
Vandamin Limited
(a) (l) (o)
Non-trading
Ordinary
Not applicable
Corporate GovernanceBusiness & StrategyFinancial Statements 230
Notes forming part of the financial statements
(continued)
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Incorporated and registered in Northern Ireland
C&C Profit Sharing Trustee (NI) Limited
(c)
Non-trading
Ordinary
Notes
Nature of business
Class of shares held as at 28 February
2023
(100% unless stated)
Incorporated and registered in England and Wales
A2 Contractors Limited
Bibendum Limited
Bibendum Wine Limited
Catalyst-PLB Brands Limited
Chalk Farm Wines Limited
Elastic Productions Limited
Gaymer Cider Company Limited
Instil Drinks Limited
Matthew Clark and Sons Limited
Matthew Clark Limited
Matthew Clark (Scotland) Limited
Matthew Clark Wholesale Bond Limited
Mixbury Drinks Limited
Odyssey Intelligence Limited
PLB Wines Limited
The Real Rose Company Limited
The Wine Studio Limited
The Yorkshire Fine Wines Company Limited
(i) (n)
(i) (o)
(j) (n)
(i) (o)
(i) (o)
(i) (p)
(i)
(i) (o)
(i) (o)
(i) (o)
(d) (o)
(i) (o)
(i)
(i) (o)
(i) (p)
(i) (p)
(i) (o)
(i) (o)
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
West Country Beverages Limited
(k) (o)
Non-trading
Ordinary
Not applicable
Ordinary
Not applicable
Not applicable
Ordinary
Ordinary
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Ordinary
Not applicable
Ordinary
Ordinary
Not applicable
Not applicable
Not applicable
Quinta Da Ferreira De Baxio, Castelo Branco, Fundão Parish, 6230 610 Salgueiro, Portugal.
Notes (a) – (p)
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, BT26 6JJ, United Kingdom.
(d) Wellpark Brewery, 161 Duke Street, Glasgow, G31 1JD, United Kingdom.
(e) L-2132 Luxembourg, 18 Avenue Marie-Therese, Luxembourg.
(f)
(g) 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, US.
(h) 143, Cecil Street, #03-01, GB Building, Singapore – 069542.
(i)
(j)
(k) C/O Tlt, 1 Redcliff Street, Bristol, BS1 6TP, United Kingdom.
(l)
(m) Immediate subsidiary of C&C Group plc.
(n) Entities that have availed of the audit exemption set out within Section 479A of the Companies Act 2006.
(o) Struck off during the year ended 28 February 2023.
(p) Struck off after the year ended 28 February 2023.
Whitchurch Lane, Bristol, BS14 0JZ, United Kingdom.
109A Regents Park Road, London, NW1 8UR, United Kingdom.
Companies covered by Section 357, Companies Act 2014 guarantees (note 27).
C&C Group plc Annual Report 2023 231
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Equity accounted investments
Joint venture
Notes
Nature of business
Class of share held as at 28 February 2023
Beck & Scott (Services) Limited (Northern Ireland)
Brady P&C Limited (England and Wales)
Drygate Brewing Company Limited (Scotland)
The Irish Brewing Company Limited (Ireland)
(a)
(b) (l)
(c)
(d)
Wholesale of drinks
Holding Company
Brewing
Non-trading
3 Counties Spirits Limited (Ireland)
(e) (m)
Spirits
Associate
Braxatorium Parcensis CVBA (Belgium)
Shanter Inns Limited (Scotland)
Whitewater Brewing Co. Limited (Northern Ireland)
Financial asset
Jubel Limited (England and Wales)
Innis & Gunn Holdings Limited (Scotland)
Bramerton Condiments Limited (England & Wales)
(f)
(g)
(h)
(i)
(j)
(k)
Brewing
Public houses
Brewing
Brewing
Brewing
Ordinary, 50%
Not applicable
B Ordinary, 49%
Ordinary, 45.61%
Not applicable
33.33%
Ordinary, 33%
Ordinary, 25%
Ordinary, 8.4%
8%
Food and beverage
Ordinary, 1%
Notes: (a) – (m)
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, United Kingdom.
(b) Proprium Capital Partners, 65 Grosvenor Street, London, W1K 3JH, United Kingdom.
(c) 85 Drygate, Glasgow, G4 0UT, United Kingdom.
(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)
(g) 230 High Street, Ayr, KA7 1RQ, United Kingdom.
(h) Lakeside Brae, Castlewellan, BT31 9RH, United Kingdom.
(i)
(j)
(k) 25 Farringdon Street, London, EC4A 4AB, United Kingdom.
(l)
Office 311, Edinburgh House, 170 Kennington Lane, London, SE11 5DP, United Kingdom.
Orchard Brae House, 30 Queensferry Road, Edinburgh, EH4 2HS, United Kingdom.
3001 Leuven-Heverlee, Abdij van Park 7, Belgium.
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 and was sold in three tranches during FY2023 for a total consideration of
€63.6m (£55.0m).
(m) Disposed of during FY2023 for €nil consideration.
Corporate GovernanceBusiness & StrategyFinancial Statements 232
Notes forming part of the financial statements
(continued)
30. POST BALANCE SHEET EVENTS
The Group has successfully negotiated and completed a refinancing of its current multi-currency facility agreement which will be repayable
in a single instalment following the publication of the Group’s FY2023 Results, at which point the new facility will begin. The Group will
enter into a new five-year committed sustainability-linked facility comprised of a €250m multi-currency revolving loan facility and a €100m
non-amortising Euro term loan, both with a maturity of FY2028. The facility offers optionality of two 1-year extensions to the maturity date
callable within 12 months and 24 months of initial drawdown respectively.
During February 2023, the Group implemented a complex Enterprise Resource Planning (‘ERP’) system upgrade in the Matthew Clark
and Bibendum (‘MCB’) business. The implementation is a key step in the Group’s digital transformation and optimisation program in GB,
designed to enhance the service the Group provides to customers and, in time, improve efficiency and maximise capacity utilisation
through more automated processes.
The implementation of the ERP has taken longer and has been significantly more challenging and disruptive than originally envisaged, with
a consequent material impact on service and profitability within MCB. Service levels had largely returned to normal levels by the end of
March 2023, however continuing system implementation challenges, impacted by greater seasonal trading volume, saw a deterioration in
service levels in April 2023. An improvement through May 2023 is being achieved by investing in material additional cost and resources,
ahead of a system fix being implemented to restore service to normal levels permanently.
The Group currently expects a one-off impact of c.€25 million associated with the ERP system disruption in FY2024, reflecting the cost
associated with restoring service levels and lost revenue. There is expected to be a consequential increase in working capital in FY2024,
however net debt/EBITDA is expected to remain within the Group’s stated range of 1.5x to 2.0x. Excluding the impact on MCB, C&C is
currently performing in line with management expectations for FY2024 and the Board is confident in the Group’s medium and long-term
strategy and prospects.
On 18 May 2023, David Forde stepped down as the Group’s Chief Executive Officer (‘CEO’) and Director with immediate effect, and
consequently Patrick McMahon, Chief Financial Officer (‘CFO’), was appointed CEO with immediate effect and Ralph Findlay, Chair, was
appointed Executive Chair to support the management transition as Patrick McMahon will also retain his responsibilities as CFO until a new
CFO is appointed.
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 24 May 2023.
C&C Group plc Annual Report 2023 Financial Definitions
233
Adjusted earnings
Profit for the year attributable to equity shareholders as adjusted for exceptional items
Company
C&C Group plc
Constant Currency
DWT
EBITDA
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
Dividend Withholding Tax
Earnings 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 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 before tax for continuing activities before
exceptional items and excluding the Group’s share of equity accounted investments’ profit/(loss)
after tax
EPS
EU
Exceptional
Free Cash Flow
Earnings per share
European Union
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 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
HL
IAS
IASB
IFRIC
IFRS
Interest cover
Export
LAD
Liquidity
C&C Group plc and its subsidiaries
Hectolitre (100 Litres)
kHL = kilo hectolitre (100,000 litres)
mHL = millions of hectolitres (100 million litres)
International Accounting Standards
International Accounting Standards Board
International Financial Reporting Interpretations Committee
International Financial Reporting Standards as adopted by the EU
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
Sales in territories outside of Ireland, Great Britain and North America
Long Alcoholic Drinks
Liquidity is defined as cash plus undrawn amounts under the Group’s revolving credit facility
Corporate GovernanceBusiness & StrategyFinancial Statements 234
Financial Definitions
(continued)
Net debt
Net debt/EBITDA
Net revenue
Net debt comprises borrowings (net of issue costs) less cash plus lease liabilities capitalised under
IFRS 16 Leases
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 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
On-trade
Operating profit
All venues where drinks are sold for off-premise consumption including shops, supermarkets and
cash & carry outlets selling alcohol for consumption off the premises
All venues where drinks are sold at retail for on-premise consumption including pubs, hotels and
clubs selling alcohol for consumption on the premises
Profit 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 before exceptional items and is calculated as a
percentage of net revenue
PPE
Revenue
ROI
TSR
UK
US
Property, plant & equipment
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
Republic of Ireland
Total Shareholder Return
United Kingdom (Great Britain and Northern Ireland)
United States of America
C&C Group plc Annual Report 2023 Shareholder and Other Information
235
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 2023
was ordinary 800,000,000 ordinary shares at €0.01 each. The
issued share capital at 28 February 2023 was 402,007,212 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
Share price at year end
2023
£1.49
2022
£2.11
2023
Number
2022
Number
No of Shares in issue at year end
402,007,212
401,913,690
Market capitalisation 28 February
£599m
£848m
Share price movement during the financial year
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.
Subject to shareholder approval at the Annual General Meeting, the
Directors have proposed a final dividend of 3.79 cent per share to
be paid on 21 July 2023 to ordinary shareholders registered at the
close of business on 9 June 2023. No interim dividend was paid
with respect to FY2023; therefore, the Group’s full year dividend will
amount to 3.79 cent per share. There is no scrip dividend alternative
proposed. Due to the impact of COVID-19, total dividends for the
prior financial year were €nil.
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.
– high
– low
£2.16
£1.44
£3.36
£1.45
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.
Corporate GovernanceBusiness & StrategyFinancial Statements 236
Shareholder and Other Information
(continued)
Certificated shareholders
Investor Relations
Shareholders who hold their shares in certificated form will
automatically receive dividends in Euro with the following exceptions:
FTI Consulting
10 Merrion Square, Dublin 2, D02 DW94
• Shareholders with an address in the United Kingdom (UK) will
Principal Bankers
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.
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
Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702
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 LinkGroup)
P.O. Box 7117, Dublin 2.(if delivered by post) or;
Suite 149, The Capel Building, Mary’s Abbey, Dublin 7, D07 DP79,
Ireland.(if delivered by hand)
Tel: +353 1 553 0050
Fax: +353 1 224 0700
Email: enquiries@linkgroup.ie
Website: www.linkgroup.eu
ABN Amro Bank
Allied Irish Bank
Bank of Ireland
Bank of Scotland
Barclays Bank
HSBC
Rabobank
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 Centre, Harcourt Street, Dublin 2, D02 YA40.
Website
Further information on C&C Group plc is available at www.
candcgroupplc.com
C&C Group plc Annual Report 2023
237
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Corporate GovernanceBusiness & StrategyFinancial Statements 238
Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702.
www.candcgroupplc.com
C&C Group plc Annual Report 2023