C&C : FY 2021 Final Results

RESULTS FOR THE 12 MONTHS ENDED 28 FEBRUARY 2021

C&C Group plc ('C&C' or the 'Group'), 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 announces results for the twelve months ended 28 February 2021 ('FY2021').

FY2021 Financial highlights

	FY2021	FY2020	Change
€m except per share items	€m	€m	%
Net revenue(i)	736.9	1,678.4	(56.1%)
Adjusted EBITDA(i)(ii)	(28.8)	150.7	NM
Operating (loss)/profit(i)(iii)	(59.6)	118.6	NM
Operating margin(iii)	NM	7.1%	NM
Basic EPS	(33.8c)	2.9c	NM
Adjusted diluted EPS(iv)	(22.9c)	29.6c	NM
Exceptional items (pre-tax)	36.1	92.5
Dividend per share	-	5.5c
Free cash (out)/inflow(iii)(v)	(91.2)	155.1
Free cash (out)/inflow (iii)(v) (% conversion)	NM	101.0%
Liquidity(vi)	314.6	335.3
Net Debt(vii)	441.9	326.9
Net Debt(vii) (excluding lease liabilities)	362.3	233.6

FINANCIAL SUMMARY

• Net revenue of €736.9 million has decreased 56.1%(i) versus last year, delivering an operating loss of €59.6 million as a direct result of the impact of COVID-19.
• Net revenue growth of 14.2% in off-trade in FY2021 versus last year.
• Free cash outflow(v) was limited to €91.2 million pre-exceptionals as a result of cost control measures implemented; reduction in capital investment and marketing investment; and working capital management.
• Exceptional charges incurred are primarily with respect to the impact of extended COVID-19 restrictions including impairment of equity accounted investments, stock write-off costs, costs relating to covenant waivers and other costs directly relating to the pandemic. Restructuring costs were also incurred. These costs are partially offset by the profit from divestment of a non-core asset.

EFFECTIVE LIQUDITY MANAGEMENT

• The Group maintained effective management of liquidity and net debt, reporting €314.6 million and €441.9 million respectively at the end of FY2021.
• Implemented various working capital initiatives, including the negotiation of temporary extensions to supplier payment terms and agreed temporary deferrals with the UK and Irish tax authorities valued at €77.4 million at the end of February 2021, of which €38.6 million is payable in H1 FY2022.
• Completed a c.€140 million US private placement in March 2020 and subsequently extended the repayment period of a €105 million term loan.

RIGHTS ISSUE

• The Group has separately today announced a fully underwritten Rights Issue to raise approximately £151 million of gross proceeds (the "Rights Issue"). The proceed of the Rights Issue will be used to reduce the Group's leverage and provide sufficient liquidity to manage near term trading uncertainty.
• The Rights Issue also ensures that C&C will be positioned to emerge from the pandemic in a position of strength to execute its long-term strategy. This includes further strengthening our brands and optimising our distribution system as the hospitality sector emerges from the pandemic.

1

C&C Group plc | Twelve months to 28 February 2021

• Debt covenants waivers for FY2021 were successfully negotiated and these have been extended up to, but not including, the August 2022 test date. Conditional on the Rights Issue completing, covenants have been renegotiated for 31 August 2022, more detail can be found in the finance review below.
• Post the Rights Issue and following unrestricted trading resuming, the Board believes that a long-term leverage ratio of below 2.0x is an appropriate target for the Group, supported by the Group's medium-term targeted free cash flow conversion rate of 65-75% and a steady state target of mid to high single digit earnings per share growth.

OPERATIONAL HIGHLIGHTS

• The Group returned to profitability and underlying cash generation during the easing of on-trade restrictions in July, August and September 2020, demonstrating the operating leverage in the business to on-trade re- opening.
• Our brand strength was reflected in off-trade volume share growth in FY2021 for Tennent's(ix), Bulmers(x) and Magners(xiv) with all three brands delivering share gains.
• Addressing the growing consumer demand for 'no and low' alcohol alternatives: launching Tennent's Zero and Tennent's Light brand extensions and our own hard seltzer brands in Ireland and Scotland.
• Since the Brexit transition period formally ended on 31 December 2020, we have to date had minimal disruption to our operations and supply chain.

RESPONSE TO COVID-19

• Proactive steps to mitigate, where possible, the negative financial and operational impacts of the COVID-19 pandemic.
• Responded quickly and decisively to ensure we provide a safe and compliant workspace for our essential employees unable to work from home and a supportive working environment for all our team.
• Supporting customers with various initiatives; picking up excess stock; replacing old kegs for new; credit terms and loan moratoriums; order and delivery options, ranging advice and promotions for the reopening of the hospitality sector.
• Securing the short term; maximising available cash flow, ensuring sufficient liquidity to manage through the period and streamlining the cost base. These measures include:
  o Support from lenders with renegotiated covenants providing incremental headroom to the business during the pandemic;
  o Issuing approximately €140 million of US private placement notes in March 2020 diversifying our sources of finance;
  o Implementing a cost streamlining programme to deliver annualised savings of €18 million against the pre COVID-19 cost base, which includes consolidation of the distribution network;
  o Significantly reducing discretionary expenditure, including temporarily reducing salaries for Senior Management and the Board in H1 of FY2021;
  o Postponing the majority of non-committed capital expenditure; and
  o Implementing various working capital initiatives, including the negotiation of temporary extensions to supplier payments terms and agreeing deferrals with the UK and Irish tax authorities; and suspending the payment of dividends.
• Availing of government support initiatives including the furlough scheme to support 2,000 colleagues' jobs.

STRATEGIC DEVELOPMENTS

• The strength of our final-mile distribution continues to be reflected through new exclusive distribution deals in FY2021 which included: Budweiser in Ireland; Tito's Handmade Vodka in the UK, the #1 selling spirit brand in the USA(xii); and Innis & Gunn, Scotland's #1 craft beer(xiii), into the IFT ('Independent Free Trade') across the on-trade in the UK and Ireland.
• As part of the Innis & Gunn deal, C&C secured a long-term production contract for our Wellpark Brewery and received an 8% equity stake along with a long-term incentive scheme which will make a number of shares available to the Group based on performance targets.
• Optimisation of the Great Britain, Matthew Clark and Bibendum on-trade distribution networks to drive ongoing efficiencies and enhanced future margins.
• The pandemic has accelerated the adoption of technology and the Group has responded to this by continuing the development of our ecommerce platforms, creating new features to further enhance our customers' journey.
• Ongoing non-core asset disposal programme, including the Tipperary Water Cooler business in October 2020 for an initial consideration of €7.4 million and the Vermont Hard Cider Company in April 2021 for a total consideration of $20 million.

ESG COMMITMENT

• Continued focus on and delivery of ESG strategy despite the challenges of the pandemic.
• ESG board committee formed during FY2021 and the launch of an ESG policy anchored in six pillars.
• Progress on sustainability in FY2021 includes investment at Wellpark in CO2 recovery; trialling electric vehicles and optimising distribution network to reduce fleet mileage.
• The investment of £7m into Wellpark Brewery will also facilitate the move out of plastics during FY2022.

2

C&C Group plc | Twelve months to 28 February 2021

• Progress on society and workforce related pillars includes introduction of 'no and low' alcohol variants, and additional health and wellbeing external support systems for our colleagues.

CURRENT TRADING ENVIRONMENT

• With outdoor as well as restricted indoor hospitality once again reopened in the UK, C&C has been able to respond quickly to rapidly evolving demand with outlets traded with for the week ending 16 May 2021 at 65% of the same week in 2019. In addition, Irish hospitality is due to reopen from early June 2021.
• The Group has completed the consolidation of the on-trade distribution network, moving all of our English distribution in house. In addition, a new 50,000 square foot Edinburgh depot was opened in May 2021 and has resulted in the subsequent closure of 4 depots in the existing Scotland network.
• The Group communicated an IT security incident on 19 April 2021 which was isolated within our Matthew Clark and Bibendum business. The incident has emphasised the need for continued focus on information security and the Group has commenced a detailed review of its information security and cyber preparedness policies and processes.

David Forde, C&C Group Chief Executive Officer, commented:

"FY2021 has presented an extraordinary set of circumstances which have challenged our business, and our industry, at every level. With approximately 80% of C&C's pre COVID-19 net revenue derived from the hospitality sector, the pandemic has had an unprecedented impact on the Group. Thanks to the prompt and decisive action of our team and our resilient business model, we have successfully navigated these challenges to date. We implemented responses to the near-term challenges to maximise liquidity, support customers, reduce costs and fulfil off-trade demand from the immediate change in consumption dynamics. Our top priority continues to be protecting all our stakeholders. Their health and wellbeing are of paramount importance to the success of C&C. As the hospitality sector recovers from COVID-19, we will continue to be flexible in our approach and work with our customers who will face challenges as trade reopens and support them through collaboration with our suppliers and partners.

Our business model was proven during FY2021 as, during the periods of on-trade restrictions easing, we returned to profit and cash generation. C&C's brand strength was demonstrated by our core brands growing off-trade share, reflecting their special relationship to the consumers they serve. We will build on this as the hospitality sector reopens, targeting cider share growth and building our share in premium beer which we continue to see as a significant market opportunity. Development and evolution of our branded portfolio will remain key for growth and we will enhance our wider portfolio with new agencies or equity for growth brands. We will continue to optimise our system strength through cost streamlining and infrastructure consolidation, in addition to accelerating the adoption of technology and the efficiencies therein. We believe our brand and system strength will position us to grow market share, which will be delivered by engaged and inspired colleagues, committed to our sustainability agenda.

We are confident in our business model and strategy for growth, the Group continues to face uncertainty with the ongoing impact of COVID-19 across the hospitality sector. Today we have also announced a Rights Issue to raise gross proceeds of approximately £151 million which will strengthen the balance sheet and ensure C&C is in a stronger position to achieve sustained growth and pursue its strategy as the hospitality sector emerges from the pandemic.

We look to FY2022 with optimism and C&C continuing to play an integral role in the UK and Ireland drinks market with our brand and distribution assets appreciated by consumers, customers and brand owners alike. We are confident C&C will emerge from the pandemic stronger, more streamlined, and primed to deliver on our ambition to be the preeminent brand-led,final-mile, drinks distributor across our core markets which will ensure long term value for our shareholders."

ENDS

3

C&C Group plc | Twelve months to 28 February 2021

OPERATING REVIEW

Great Britain

€m
Constant currency(i)	FY2021	FY2020	Change %
Net revenue	206.8	325.2	(36.4%)
- Price / mix impact			(12.8%)
- Volume impact			(23.6%)
Operating (loss)/profit(iii)	(8.4)	43.8	(119.2%)
Operating margin	NM	13.5%
Volume - (kHL)	2,007	2,626	(23.6%)
- of which Tennent's	690	977	(29.4%)
- of which Magners	480	530	(9.4%)

Our Great Britain division's net revenue decreased 36.4%(i) to €206.8 million in the year driven by the closure of the on-trade and volume moving into the lower margin off-trade channel. As a result, operating profit has reduced by €52.2 million(i) to a loss of €8.4 million(iii). Despite the trading challenges the division has made considerable steps towards strengthening its portfolio; optimising its cost base and positioning itself for emerging trends.

Tennent's has again performed strongly, with the underlying brand health reflected in Tennent's gaining both volume and value share in the off-trade. Tennent's off-trade volume and value share of 26.5% and 21.6% respectively as at 21 February 2021 represents growth of 1.1% and 0.7% versus FY2020(ix). We have executed successful new product developments, with the launch of Tennent's Zero and Tennent's Light, reflecting the commitment of the brand to the continuing change in consumer preferences. The Zero and Light variants have secured over 1,500 listings in the off-trade during FY2021, with Tennent's Zero voted as the Scottish Local Retailer Product of the Year 2020, an award chosen by the retailers themselves.

Magners has grown volume share of apple cider in the off-trade to 9.7% as at 21 February 2021 represents growth of +0.4%(xiv). Overall volumes in the cider category were aided by the sustained period of warm weather through spring and summer in 2020.

In addition, we have further enhanced our portfolio by becoming the exclusive route to market for Innis & Gunn, Scotland's #1 craft beer(xiii), into the IFT ('Independent Free Trade') across the on-trade in the UK and Ireland. As part of the Innis & Gunn deal we secured a long term manufacturing contract for our Wellpark Brewery and received an 8% equity stake at only the cost of nominal share capital along with a long-term incentive scheme which will make a number of additional shares available to the Group based on performance targets.

Wellpark Brewery remained open with minimal levels of disruption from COVID-19. We responded to the immediate switch in consumption dynamics to the off-trade and met the exceptional demand for our off-trade SKUs, which outperformed the market, whilst also maintaining the demand for our contract brewing and private label partners. We have continued our commitment to ESG with £7 million capital investment to remove single use plastic in our products, which will be completed in 2021. In addition, we have installed CO2 capture and storage facilities, significantly reducing the need to purchase CO2. Further, we are a founding member of Circularity Scotland, affirming our commitment to the creation of an efficient and well-designed Deposit Return Scheme for Scotland that delivers the recycling and litter objectives and supports the country's ambitions for a more circular economy.

We ensured support for our on-trade customers putting in place measures that included: flexibility on credit terms; collection of old kegs and replacing them with new kegs; back to trade planning including, ranging, promotions and moratoriums on capital loan book repayments. As a response to the trend in customers moving towards ordering online, we continued the development of our ecommerce offering for the Tennent's business in Scotland, enhancing our customer experience with the introduction of a new ordering platform. This platform provides improved functionality including an optimised ordering journey, a direct link to online support via web chat and the ability for the customer to self-manage their trading account, including the option to pay open invoices and apply credit notes. We believe orders will continue to move online as we further enhance our ecommerce offering. We forecast by the end of FY2022 that on-trade online orders will make up 70% of the revenue for the business in Scotland.

4

C&C Group plc | Twelve months to 28 February 2021

Significant work has been completed on the secondary distribution network in Scotland, rationalising its footprint and associated cost base. As a result, a new 50,000 square foot depot has been established in Edinburgh,

Scotland's second largest city where Tennent's had no presence before. On the opening of the Edinburgh depot, we will close four existing depots in Scotland, including Matthew Clark's Glasgow depot, creating one final-mile

logistics solution which will be fully operational by June 2021. This will yield ongoing efficiencies, improve customer service and optimise working capital by lowering overall stock levels. Our convenience direct to store model utilises this network, established in part following minimum unit pricing, and has performed strongly with overall volume growth of 70% versus FY2020. The growth has been aided by the development of an online platform and retailer loyalty scheme which also provides trade information, point of sale and incentives.

Ireland

€m
Constant currency(i)	FY2021	FY2020	Change %
Net revenue	166.1	226.3	(26.6%)
- Price / mix impact			(15.4%)
- Volume impact			(11.2%)
Operating (loss)/profit(iii)	(4.9)	40.2	(112.2%)
Operating margin	NM	17.8%
Volume - (kHL)	1,257	1,416	(11.2%)
- of which Bulmers	300	366	(18.0%)

Our Ireland division's net revenue decreased by 26.6%(i) to €166.1 million in the year driven by the continued lockdowns with Ireland experiencing one of the longest hospitality sector lockdowns in the world. There was a shift in consumption dynamics with off-trade volumes +21.2% versus FY2020. While this provided a welcome revenue stream, the lower margin and pack mix pressures were not sufficient to offset the impact of the on-trade closures. As a result, operating profit(iii) has reduced by €45.1 million(i) to a loss of €4.9 million.

Bulmers off-trade volume and value share of Irish cider of 50.5% and 50.8% respectively as at February 2021 represents growth of 3.7% and 4.3%(x) which, in part, was supported by the exceptionally good weather during spring and summer 2020. The Bulmers brand, despite sustained competitive pressure over the last few years, has performed strongly, aided by an exceptionally warm spring and early summer weather and consumers' desire for brands with provenance which they know and trust. As a consequence Bulmers off-trade volumes were +37.7% versus FY2020, with the brand taking both volume and value share in off-trade long alcoholic drinks ("LAD")(x).

During the year we extended our partnership with Budweiser Brewing Group in Ireland to include exclusive distribution of Budweiser. Budweiser Brewing Group and Bulmers Ireland have committed to investment in the brand, notably with new branding, packaging and a TV campaign with the new branding trialled in Ireland as one of the first worldwide territories. The introduction of Budweiser into our portfolio, strengthens our position as the third biggest supplier of LAD to the off-trade(xi).

Our Clonmel manufacturing site and distribution network remained fully operational over the last twelve months with minimal impact to our supply chain. We quickly established a safe and compliant environment for our colleagues who did not have the ability to work from home.

The business has ensured support for our customer base with measures including; providing flexibility with delivery days and order sizes; a 'new for old keg' replacement process; and C&C Hygiene, an initiative providing funding for pre-opening /start-up costs for our customers which is helping 500 on-trade customers. C&C Hygiene offers a central hub with safety standards and certification for the hospitality sector. The initiative also offers items to facilitate the safe opening and continuing operation including divider screens, hand sanitisers, signage and foot handles for doors.

We have continued to enhance our customer proposition and service by launching a new online ordering platform and customer portal system, 'Bulmers Direct'.

During the year we rebranded our Irish wine business Gilbeys to Bibendum Ireland. Bibendum Ireland which is the largest independent wine business in Ireland performed strongly, capitalising on a change in consumption dynamics, with total volumes up 7.9% in FY2021 versus 878k cases sold in FY2020.

5

C&C Group plc | Twelve months to 28 February 2021