Focus - C&C Group's Q2 & H1 Performance
C&C Group has returned to volumes growth in Ireland
Republic of Ireland
Net sales in the country, excluding the Gleeson Group acquisition earlier this year, were up 2%, while operating profits, excluding exceptionals, were up by 12%. Volumes, again excluding Gleeson, were up by 2.7%, after an 11.5% decline in Q1.
The group's first-half cider sales were up 1%. Volumes also picked up, rising by 2.5% in H1 after a 13% drop in Q1. Beer volumes grew by 4% despite an overall 3% drop in the Irish beer industry. On-trade volumes grew by 25%.
Meanwhile, Ireland's overall Long Alcoholic Drinks (LAD) sector declined by 2% in H1. However, for the first time in seven years, the on-trade outperformed the off-trade, down 1% compared to off-trade's 2% drop, C&C Group said.
Group volumes in the UK cider market improved from a 22% decline in Q1 to a 6% decline in Q2. This resulted in an overall cider volumes drop of 14% in H1. First-half cider sales were down by 18%. “Despite further price investment, the total volume performance reflects the intensity of price competition in the UK market,” C&C Group said of the cider category.
The Magners brand posted a 10% volumes drop in H1, with Q2 volumes down 2%. C&C said it will continue to invest in the brand while reducing operating costs.
Tennent's volumes in the UK fell by 6% against an overall 5% decline in the country's beer market. However, operating profits grew by 9%. Caledonia Best increased volumes by 39% in H1.
C&C's international unit in H1 delivered a 77% volumes jump and a 73% sales increase. Vermont Hard Cider Company's Woodchuck brand in the US posted a 3% volumes rise, which was lower than the industry average, C&C said. It blamed the underperformance on a “disruptive” integration process following Vermont's purchase in December. Magners volumes in the US fell by 28% because of “operational changes” in distribution, however C&C Group added that it expects the brand to return to growth in H2.
In Australia, the company said route-to-market problems were preventing the brand from performing “in a vibrant cider market”. The group said it is confident the issue has been resolved and expects Magners to enjoy a “strong” summer season in the country.
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