CIDER - EXPORT
heading
bottle collection

MAGNERS GAYMERS HORNSBY’S
Constant Currency(i) FY2012
€m
FY2011
€m
Change
%
FY2012
€m
FY2011
€m
Change
%
FY2012
€m
Revenue 24.7 21.0 17.6% 3.1 3.0 3.3% 2.5
Net revenue 24.7 21.0 17.6% 3.1 3.0 3.3% 2.4
- Price /mix impact (10.7)% 14.3%
- Volume impact 28.3% (11.0)%
Operating profit 4.5 2.6 73.1% 1.2 1.4 (14.3)% 0.9
Operating margin (Net revenue) 18.2% 12.4% 5.8ppts 38.7% 46.7% (8.0)ppts 37.5%
Volume (khl) 153.5 119.6 28.3% 35.4 39.8 (11.0)% 17.8


Magners: Export growth of Magners accelerated in the second half with volumes growing by 28.3% for the year as emerging cider categories in North America, Australia and Europe continued to demonstrate good growth.

As anticipated, US cider volume growth increased in the second half of the year as an improved autumn trading period helped drive sales. The US business enjoyed the benefit of increased investment in sales infrastructure and extended capability across both channels and brands. Canadian volumes continue to grow strongly and were up 85% for the year, supported in the second half by a new distribution agreement with Moosehead. North American volumes grew by 25% for the year which is line with estimated category growth rates.

The Australian market, which is a more developed cider market than North America, continues to display excellent growth as imported ciders and flavour variants recruit consumers into the category. Penetration rates are now estimated at 3% of LAD and volumes are up 30% per annum(ii). Magners introduced above-the-line TV advertising over the Australian summer for the first time with the ‘Catch’ cricket themed campaign. Volume was up 78% for the year. Under the recently signed five year distribution agreement with Suntory, marketing investment in the brand is set to increase further and the range-extending Magners Selections are being rolled out across the network.

Revenue growth in Magners of 17.6% falls short of volume growth due to the change in the structure of the distribution contract with Suntory, the Group’s distributor in Australia. Under the terms of the new arrangement, responsibility for direct market investment transferred to Suntory with a consequential reduction in headline revenue. Total Magners Export revenue growth under the former arrangement with Suntory would have been circa 29%. Operating margin improvement is attributed to the lower reported revenue number, greater absorption of fixed overheads and operating efficiencies.

Gaymers: Despite volume decline of 11.0% during the year, improved unit pricing delivered net revenue growth of 3.3%. Opportunities for international markets are being reviewed.

Hornsby’s: The acquisition of the Hornsby’s cider brand from E&J Gallo Winery in November 2011 has positioned C&C as the number 2 cider company in the US with an estimated 20% share of the US cider category. The Hornsby’s brand brings US domestic cider heritage to C&C. Trading is in line with expectations and integration is well underway. We expect to exit the transitional services arrangements within the timescale agreed with E&J Gallo Winery.

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