C&C Group Aktie

Good morning, ladies and gentlemen. Welcome to the C&C Group FY '26 Full Year Results. It's great to see you all, and a warm welcome to all of you, whether you are here in person in our offices in St. Paul's or indeed if you're joining us remotely this morning.

I'm really pleased to be joined today by Adam Phillips, who's started as our CFO just a few short weeks ago. I'm sure a number of you already know Adam from his past, but I'm delighted to say Adam's hit the ground running and is already making a great impact in the business despite only being here for a very short period of time. So welcome to Adam.

In terms of today, you have presentations in front of you, and we'll run them through on the screen. I will kick off with a short overview of FY '26. I'll then hand over to Adam to take you through the detailed financial review of 2026. Adam will then hand back to me where I will cover an update on strategic direction, followed by a short operational review, and we'll close with a short summary and then be happy to take your questions.

Moving right along. So I'm on Slide 4 now. It's been a busy year for us at C&C Group. I'm pleased to report we've made some encouraging progress across our strategic priorities. However, it has been a difficult year from a financial performance perspective. There's no getting away from the challenges faced in the sector, and we do not yet have the resilience or agility as a business to withstand the headwinds that we have faced. This theme will be consistent throughout this presentation. We need to build that resilience into our business, and that's what we've been doing over the past 12 months.

As it happens, not quite fast enough to cope with external market challenges that impacted the hospitality markets and consequently, our volumes and our mix, especially in our core wholesale business. However, across the last year, we believe we have established a stronger and more resilient platform for the future, and I will explain why after we have heard from Adam with the financial review of FY 2026. Adam?

Thanks, Roger, and good morning, everyone. And I'll start with the headline financials. Just moving on to Slide 6. So revenue declined 6% year-on-year reflected -- and that reflected branded growth of 4% and decline in the distribution business of 8%, and I'll expand on that on the next slide.

Operating profit of EUR 70.5 million compares to EUR 77.1 million for the previous year, and that year-on-year reduction broadly tracked the movement in revenue. Operating margin in the middle of the slide there was broadly flat year-on-year with margin expansion in the branded business, offset by dilution in the Distribution segment. And from a cash perspective, the group continued to generate good cash flow, albeit at lower levels than the previous year, mainly due to movements in working capital, which I'll cover later. Free cash flow before exceptionals was EUR 45.3 million, and leverage at the end of the year was 1.6x on a pre-IFRS 16 basis.

So looking at revenue in a bit more detail. Branded revenue increased by 4% to EUR 310 million, reflecting positive sales growth for Tennents and Bulmers, offset by declining cider volumes in GB, where our brands experienced a period of disruption as we took the Magners brand back in-house.

In the Distribution segment, revenue decreased by 8%, driven by a combination of weak market volume, product mix headwinds with wines and spirits categories ceding share to long alcoholic drinks and the impact of the removal of BBG brand sales in Republic of Ireland, which we exited at the same time as we regained control of our GB cider brands.

Turning to operating profit, and these numbers are before exceptional items. Operating profit -- operating margin, sorry, of 4.5% was broadly maintained year-on-year. Absolute operating profit declined from EUR 77.1 million to EUR 70.5 million, principally due to movement in revenue. And on this slide here, we've set out the drivers of that profit movement in the year.

In the Branded business, you can see volume decline was more than offset by mix and price benefits. Branded operating profit increased from EUR 46.1 million to EUR 51 million and margin percent improved by 1.1 percentage points to 16.5% through a focus on efficiency, lower costs and trading disciplines.

In Distribution, operating profit declined from EUR 31 million to EUR 19.5 million, driven by volume and mix. And the mix impact itself is due to the category shift from the higher-margin percentage wines and spirits into long alcoholic drinks.

And as I mentioned, these operating profit numbers are before exceptional items. These exceptional costs totaled EUR 40.7 million in the year on a pretax basis, and they're set out in detail in Note 3 to the financial statements in this morning's announcement. And those exceptional costs include some noncash impairments of goodwill and assets if you put those to one side, the cash cost of the exceptional items was EUR 20.8 million, so around half of the total amount and principally related to restructuring costs.

So before I move on to cash flow, a quick look at the outlook for costs. And on the left-hand side of this slide, I think we've shown this slide before, but the left-hand side, we've broken down our FY 2026 operating costs into its different components. So there's sort of percentage split. And in the middle of the slide, we've updated the outlook that we've shown before with the arrows showing the direction that these costs are moving in, in FY 2027.

We're well hedged for the year ahead, and these arrows show the impact after those hedges. So we do expect cost inflation net of hedges. We expected that before the current kind of geopolitical situation. But we are well hedged for the year ahead. Now clearly, those hedges only provide some short-term production and the longer that the geopolitical circumstances continue, the more likely it is that the market will see some increasing cost inflation. But we have put some price through already, which has landed well. And as I say, the sort of key cost lines are well hedged for the year ahead.

So moving on to cash flow, and this table here breaks down the free cash flow in the year, starting at the top of the table with EUR 104 million of adjusted EBITDA, which was down EUR 7.7 million year-on-year, in line with the movement in operating profit, as explained earlier.

CapEx of EUR 13 million remained above the rate of depreciation, but was lower year-on-year, principally due to the investment in the prior year in the new can-filler at the Wellpark Brewery.

Working capital there in the middle of the slide, you can see was a EUR 21 million outflow, an element of this related to the decline in revenue, including a circa EUR 5 million reduction in the drawdown on the receivable securitization facility, which sits in working capital and the remainder of the movement principally related to movement in payment terms with certain customers and suppliers around the -- around the period end and with stock being broadly flat year-on-year.

Moving down the table, you can see cash tax was net nil in the year, and that's due to refunds received. Net finance costs of EUR 20.7 million were broadly similar year-on-year, and that was the net of the impact of higher average borrowings, but offset by lower rates. And all of those movements resulted in free cash flow pre-exceptionals of EUR 45.3 million.

Moving on to net debt on the next slide. So net debt ended the year at EUR 121.4 million on a pre-IFRS 16 basis. That's an increase of EUR 40.5 million in the year, which matched the level of exceptional costs and the working capital outflow in the year.

Shareholder returns in FY 2026 on a cash basis were EUR 38.2 million, and that comprised EUR 23.1 million of dividends and EUR 15.1 million of buybacks. And leverage, as I said, at the end of the year was 1.6x on a pre-IFRS 16 basis.

And just by way of reminder, so our financing is long dated with significant headroom. We have an RCF and term loan extending out to January 2030 and a couple of private placements maturing in 2030 and 2032.

So just to finish on capital allocation, this slide sets out the prevailing approach to capital allocation. Firstly, on the left-hand side, a reminder of the cash generation characteristics of the business with tight working capital management, relatively modest maintenance CapEx requirements and stable finance and tax costs. And this cash generation has been used to pay the ordinary dividend to fund buybacks and provide strategic growth investment optionality.

And subject to shareholder approval, the Board proposes a final dividend of EUR 0.0367, taking the full year dividend to EUR 0.0575. And since the start of FY 2025 and including the final dividend in respect of FY 2026, which will be paid in July, a total of EUR 105 million will have been returned to shareholders. That's it from me for now. Happy to take questions at the end, but back to Roger.

Okay. Thank you, Adam. Now I would like to take a little time just to update you on what we've been doing across the last 12 months to support our choices and plans around the strategic direction setting for the C&C Group. Following that, I'll then give you a brief update on our main brands and initiative activity, along with an update on progress in relation to sustainability before we move to the Q&A.

So turning firstly to the market context we find ourselves in, which is on Slide 14. Last year has seen tough market conditions across many consumer goods categories. Perhaps some of the toughest have been well documented are the challenges in the hospitality channel. The hospitality channel has had to contend with multiple issues, primary product inflation in food and drink, labor cost increases, regulatory-driven cost pressure as well as the general impact on volumes of dropping consumer demand as economic pressure reduced consumer spending power.

In addition to a challenging economic environment, we've also seen changes in consumer consumption dynamics with further extension of alcohol consumption moderation trends and the increased usage of weight loss drugs impacting consumer consumption across multiple fronts in multiple categories.

Product mix changes accelerated as consumers continue to shift from wines and spirits towards long alcoholic drinks. In addition, consumption occasions further developed beyond the traditional to more intentional and occasion-based planned social moments, driving consumption at home and the rise of more upbeat on-trade event-driven occasions.

As I already mentioned, moderation is an ongoing theme with 23 million GB adults now consciously reducing alcohol consumption, either through fewer occasions or by turning to no and low alcohol products when socializing. So it's currently a tough environment. However, consumers will continue to drink. We just need to be alive to what they will be drinking, where they will be consuming it and when they will be consuming it.

Within this market context in mind, our overall branded drinks performance has continued to see relatively strong performance within these difficult conditions, supported by our unique position in our core markets and our differentiated route to market. It's often said that in challenging times, consumers turn to better known and trusted brands, which is an important and ongoing opportunity for our wider brand portfolio.

So if I can turn from the external market and to talk a little bit about what we are doing to steady the ship and prepare for the future, we turn to Slide 15. The past 12 months have seen progress across a wide range of areas of the business. We've continued to take action to stabilize and lay a solid set of foundations for the future. When I arrived last year, there was a long list of necessary actions, financial control, corporate risk, systems and business processes to name but a few.

I'll not dwell on this huge list, rather, I'll pick out a number of key areas actually highlighted in green in the slide. However, I would say that it was very clear to me that to make strategic progress within C&C, we needed not only an appropriate strategy, but we needed to avoid the executional banana skins, which have dogged this business for years. So focus had to be on getting the basics right and all of the strategic planning in the world could be wasted by immediate executional issues if they weren't dealt with.

So operationally, we've prioritized safety and service. Both are not overnight fixes, but we've made real progress to ensure the safe operation of everything we do. And we have, in recent months, delivered industry-leading customer service from a stable operating platform right across the business. I was especially proud of our service to our customers over the festive period where I would go as far as saying our execution to the trade was close to flawless.

With this base operating level set, let me now pick out 3 areas to update as they are critical to the strategic development of the business, and they are the senior management, data and the creation of models to increase transparency of our fully allocated costs across the business.

Let me turn to each of those in turn. First of all, if I turn to Slide 16. Over the past 12 months, we've changed around 70% of the senior leadership team, recruiting what I believe is a talented and highly capable team. You can see from the slide the new leadership team. We now have a team capable of delivering both the strategic thinking and the leadership required to take the business forward quickly and effectively. This leadership team is obviously in the early stages of forming, but it's already identifying significant improvement opportunities across the business to improve our growth potential, further reduce our costs and importantly, brings a sharp focus and a speed to our day-to-day execution. And as you can see, we have a range of skills, but the most important thing for me is when you look at the start dates at the bottom of the slide, you can see that this is really a very much a new team.

Now moving on to Slide 17. Not always the go-to topic for a corporate presentation data, but bear with me on this. Much of the history of C&C is in some ways linked in this chart. Just to highlight what we've been wrestling with, this slide shows graphically what I couldn't begin to try and describe verbally. In the orange print at the top of the slide, there are more than 11 data structures, which we have across the group.

These lead to, as I said, many of the reasons for the complexity, cost and risk that we have faced. Each of these structures has different legacy constraints in terms of product, in terms of customer, in terminology and in actual base technology, basically making any unified measurement or data analysis extremely difficult and consequently making strategic and even tactical decision-making difficult as well.

To resolve the problem quickly and effectively, we're now well into our data DNA program, which will support better, faster decision-making across the group based on the lowest risk approach to us. That is the implementation of a data integration platform that allows us to not fully reclothe the whole business in new systems with the associated new business processes, something which would have been extremely costly, very time-consuming and have a high level of consequential risk. But this should allow us to move forward swiftly and effectively through the initiation and the use of a single data integration platform, which pulls the disparate strands of our data together, creates one version of the truth to better support short- and indeed long-term decision-making.

This, in essence, is another example of what some might consider housekeeping basics, but they do enable our longer-term value creation. But let me assure you that without this simplification, we would simply be moving forward with a complex and high resource requirement before we could do anything.

If I can turn to the next slide, and I'll talk to you about the important work completed on cost allocation and business separation. We currently report our segmental performance based on 2 segments, as you'll all be well aware, Branded and Wholesale, and you can see from the slide. Now there's nothing wrong with this from a corporate reporting perspective. However, from a business operating perspective, we have in recent years, lost the granular detail required to make the best day-to-day decisions. We have not been able to see through the full allocation of costs to allow us to manage beyond the One C&C approach that was brought in a number of years ago.

The One C&C principles, which was an organizational footprint and one business model has not worked and has not delivered the anticipated business performance set out some years ago. Why is this? Well, there are multiple reasons.

Much of the group focus for some time has followed turnover and not profit. And by that, I mean the natural inclination has been to look at the biggest numbers and the areas of the businesses that have been most challenging, which, in our case, has been associated to the wholesale distribution area of the business. And we have looked at costs generally at a group level rather than attributing costs accurately across the group.

In addition, there's also obviously been significant changes in both the market we operate in and the shape of the business. Just for some context, the C&C Group when it acquired Matthew Clark Bibendum acquired a wine and spirits-focused wholesale business. Since the acquisition, there has been a significant drift away from that core proposition. Now in reality, we are much more of a beer, cider and soft drink wholesaler and delivery system.

Whilst we have retained terrific expertise and understanding, especially in wine, the market has changed. So we're battling with challenging, changing market dynamics, not least of all within our customer base where not only is the profit pool being squeezed, but we are experiencing a substantial drift in consumption dynamics that impact our product mix and therefore, our cost base requirements and consequently, obviously, our margins.

So we have stripped the business down to create a dynamic cost allocation model that will allow us to set realistic cost targets across the business based on fact rather than assumption and history. This although it doesn't sound much, is a very significant building block that will support us going forward.

So we are stabilizing. We are improving, but the markets we operate in have significantly changed and consequently, trading has been difficult. Financial performance is not where we would like it to have been as the external challenges and negative momentum in the business overtook the improvements we drove in FY 2026.

This highlighted to me the absolute imperative for change in the C&C business. Small incremental improvement was not going to work. Significant change is required. The starting point for developing a plan is always to assess where you are. That's what we have done. We cannot drive improvements, leverage our scale or drive simplicity or manage the business with agility based on the current approach. So we now have to move forward in a different way.

We turn to Slide 19. So armed with a much improved understanding of the detail of the fully allocated cost and consequential real allocated profitability of our two operating businesses, we can better plot a path forward for the group in total. Our strategy is to progressively over as short a period of time as is required, reverse out of the C&C model and revert to 2 basic business operations in the group.

Firstly, C&C brands. This includes the historic company operations of Tennent's Caledonia Breweries, Tennent's Northern Ireland, Bulmers and C&C International. This is a brand-driven full-service business model, make, move, market, sell and deliver. which will be heavily biased to company-owned brands, building sales through brand development, innovation and strong route-to-market propositions across multiple channels in core geographies in Scotland and the island of Ireland. We see this as having the potential to be a true multi-beverage platform in its core markets and beyond.

Our mission will be to build brands throughout GB and Ireland, recognizing we already have a preeminent position in hospitality in Scotland and the island of Ireland, we will build from this position of strength. We will develop and invest in the capabilities to support growth in our portfolio, increasing in retail as well as hospitality, building our execution capabilities even further. Our intention is to broaden our approach to the market, both from a portfolio perspective and a channel perspective, and I'll cover our existing brand portfolio in a moment in this presentation.

Turning to the second component business in the group, Matthew Clark Bibendum or MCB, as we now officially know it. MCB has now, at long last, been integrated into a long overdue step, which has only taken place in the last few weeks. Some of you may be surprised about that. I was.

The full integration following an internal reorganization has created a single organization now and a single product portfolio approach, bringing the best of both to create MCB as more than a set of words on an organization chart. This is the first step in a renovation program that needs to take place within our wholesale business. MCB has scale, coverage and portfolio breadth and depth alongside a significantly improved service performance required to fulfill the critical role it holds in the U.K. hospitality infrastructure. We have work to do to establish where and how it fits into the dynamic hospitality ecosystem in the best possible way. And we also have work to do to deliver our readily achievable margin targets such that they are sustainable and acceptable to all in the value chain, whether they're brand partners or customers.

MCB offers a huge curated range, especially in wines and spirits, plus unrivaled knowledge, advice and support for the hospitality sector, as well as an efficient route to market for brand partners and industry-leading customer service, a one-stop shop for the hospitality operator across drinks.

Just to turn to each of these businesses in a little more detail on Slide 20. C&C Brands provides a platform for growth at stable margins. And it has more to it perhaps than first meets the eye. It's made up in our view of multiple pillars. The first of these pillars is our brand portfolio. We have reviewed that portfolio and resegmented it. And as you can see from this slide, we have focused our portfolio around 3 distinct segments.

Firstly, core, the brands you know us best for, which have strong market penetration and significant development potential. Secondly, premium, this growing portfolio of brands that offer growth above market levels and superior sales pricing as consumers seek quality and differentiation. And we've added Drygate and latterly Innis & Gunn to this group in the last year. And then finally, Heritage, a range of less well-known brands that perhaps you've not heard of or forgotten about. But this is a segment with a loyal and significant consumer and customer base. They've been somewhat forgotten and somewhat neglected as local heroes. But with the right approach and as part of our portfolio, they can offer volume growth opportunities, particularly as we stretch from a channel perspective and particularly into retail channels.

Our plans going forward will see us develop around these segments, building innovation, driving brand development, expanding our channel coverage to ensure we maximize growth potential of these important brands, putting the correct level of investment management focus and resources to ensure volume growth, which will be the main indicator of success going forward.

In addition, we see opportunities to grow and develop the portfolio over time through the creation of new products, the development of new sub-brands and the potential to acquire bolt-on brands that can complement our existing portfolio as well as play to our operational and route-to-market strengths. This portfolio is developing beyond its current boundaries into a multi-beverage portfolio, spanning across the beverage space and utilizing our skills, which will and do stretch beyond beer and cider. I genuinely believe the C&C brands portfolio is capable of real sustained volume growth over time.

The second pillar in the C&C brand strategy relates to the existing infrastructure. This asset base is long-standing, well invested and flexible. Our 2 primary manufacturing sites at Wellpark and Clonmel offer very large-scale operating sites with flexibility, capability and agility baked into them. Importantly, both sites have sizable space and operational capacity available from existing infrastructure as well as significant development flexibility on both sites.

So whether it's the ability to drive significant operational leverage from growth of our own portfolio or the ability to rapidly deploy capacity when opportunities arise outside of our portfolio, we are well positioned to action this. This also applies to our regional routes to market where our reach, sales density and flexibility provides interesting options for both cooperation and commercial development.

Whether it's innovation, brand development or supply side development, we believe we are well positioned to support and develop the C&C brand strategy going forward with relatively little requirement for major capital and significant operational leverage opportunities.

Now turning to MCB, our second business operation within the group. Just a few slides -- a few stats on that slide for your interest. Turning to Slide 23. Unlike the immediate growth and development potential we see in C&C brands, MCB requires more of an immediate renovation strategy. However, we believe the steps to improve MCB are clear and we've already made many of those first steps.

As I mentioned earlier, MCB has a critical role to play in the GB hospitality ecosystem with its broad range and once more providing industry-leading service, it supports its customers across the channel.

For brand owners who are in the -- in our system, we provide a unique access and experience and expertise in the U.K. hospitality channel, covering all subsets from pubs to hotels, restaurants and more. The role of MCB has changed over time, but not by design. Our job is to set up MCB with the appropriate customer proposition and sustainable margins.

We have commenced a journey across -- which will last across the next few years to move our target operating margin back to the 3% to 4% range. We have a wide range of actions in hand to deliver this cost range, service proposition, buying margin and importantly, commercial controls. But we have been focused on delivering service and rebuilding trust with our customers initially alongside achieving our objectives in the core business associated to data pricing, technical architecture and CRM.

With improved basics and stronger commercial control and planning, we believe we can deliver the improvement in margin that we plan over the time scale set out without damaging our marketplace competitiveness across our customers from a service range or value perspective. Managing MCB, our core wholesale business as a stand-alone profit center will highlight and support the requirements and improvement that we have identified to return our margin to its target levels.

Turning to Slide 24. Something that's been very much in our minds as we've progressed our strategic thinking is that both sectors that our operating businesses are deeply involved in are likely to experience consolidation over the coming period. Our thesis is driven by the facts presented by the current market dynamics, volatile costs, low structural growth dynamics and the changing shape and size of available profit pools. It therefore seems logical that consolidation could be a next step, particularly in the wholesale supply environment across the U.K.

Our strategy is specifically designed to take account of these possibilities, to ensure we are best placed to benefit from these market conditions, whether it is as a consolidator or as part of a wider consolidation. In both branded and wholesale, we need to be agile and prepared to take full advantage of our strong and improving market positions and performance.

So in summary, we've spent time on many of the enabling works, which should support a rapid move into the delivery stage of our strategy. We will continue the implementation of a refreshed strategy on the ground as MCB comes together, and we set up the systems and processes designed to support our new approach in both C&C Brands and MCB alongside the supporting central functions.

We are planning a Capital Markets Day in September to update on progress to provide much more detail in terms of financial targets for the discrete elements of the business and the group as a whole, along with updates on capital allocation, leverage targets and dividend policy. We will provide an opportunity to meet the senior team and hear about plans for brand development, innovation and delivery of the MCB margin recovery plan at that stage.

So moving on to the operational update on Slide 27. Firstly, Tennent's. 2025 marked a milestone year for Tennent's lager as it celebrated 140 years of Brewing Scotland's favorite beer. Despite the difficult market, Tennent's has shown remarkable resilience, maintaining its market share in Scotland, which is a testament to its position as the category leader. In the off-trade, Tennent's has 4 of the 5 best-selling beer SKUs selling the equivalent combined volume of its next two nearest competitors and 3x more than the entire stout category combined. In the on-trade, Tennent's gained share of Scotland lager at Christmas and in the full year. And such as the strength of the brand performance, Tennent's is now actually a top 10 lager brand by volume across total GB, outperforming a number of leading global brands.

Tennent's is famed for its role it plays in Scottish culture and will continue to be at the heart of what matters to consumers. Our summer campaign last year rewarded [ Scots' Bravery ] through the best and worst of the summer weather. And we were there with a pint in hand at some of the biggest moments of the year, including selling over 365,000 pints during the summer stadium gigs across Central Scotland and 200,000 pints at Murrayfield Stadium alone during the Six Nations.

Sport remains central to the brand identity. In November, remarkably, we saw Scotland's main team qualify for the World Cup for the first time since 1998. And as official partner of the SFA, we celebrated with the team, and the tournament will form an important part of the plans for the year ahead. I will treat those of you in the room, I'm afraid not those of you who are not in the room to an early preview of a brilliant new piece of creative work for Tennent's associated with the World Cup at the end of the presentation.

This time last year, I said we would bring innovation back to the brand, and I'm delighted in the success of Tennent's Bavarian Pilsener, a 4.7% ABV limited-edition beer with a distinctive Bavarian flavor has done. Launched in December, the 4-pack was the best-selling top 5 -- sorry, was in the top 5 best-selling SKUs in all the major multiples it was listed. The launch has been so successful, we have taken the decision to make a permanent on-trade SKU with retail keen to do the same. And it has set the scene for our latest innovation, Tennent's tops, a summer beer innovation taking Tennent's lager and blending it with lemon for a refreshing summer tipple. And I think you've got some samples those of you who are here to take away. So a busy year for Tennent's and a busy year ahead.

Turning to Bulmers. I'm pleased to report that Bulmers has delivered a strong full year performance. From a position of category leadership, we've innovated to grow. Bulmers flavors variant grew 10% year-on-year and have the potential to deliver more. A new range of four products has replaced the existing two lines. These have been tested with consumers and strong adoption from retailers. We'll see a threefold increase in total distribution points for the Bulmers flavor range from May 2026.

The latest full year volume growth for Bulmers Zero was also impressive at plus 24%, supported by an increase in store listings of just over 10%. The 0.0 cider category grew by 4% year-on-year. Our Zero product commands a 33% share of this category in the Republic of Ireland is now the #1 ranked in the segment. 2025 also saw the celebration of 90 years of Bulmers with full celebration at our Clonmel site and a series of consumer activations across channels. The brand remains in rude health, worthy of its age with the highest awareness in the category and the strongest demand power as measured by Kantar in the category, which underpins the point that when consumers look to cider, they are more likely to choose Bulmers than any other brand in its market.

Turning to Magners. As you know, the past year has signaled the start of a new chapter for Magners as we took the brand execution back in-house. The first year back under our control did as expected, have transition issues as we moved out of the BBG ABI sales system and back into our own. However, after a bumpy start, we now feel we're on the road to recovery for the Magners brand. I'm pleased to say that following our investment in both marketing and point of purchase activation, we are beginning to see positive impacts as a reward for our efforts. We remain under no illusion that further time and commitment is required to ensure Magners becomes a consistent growth element of the portfolio.

Magners remains the #1 packaged cider in the GB on-trade, but it was also the fastest growing in the 12 weeks to the end of the calendar year, demonstrating an increase in consumers in the brand at the important point of consumption. We set out at the start of the year to improve Magners' off-trade presence as a key lever in reconsideration for consumers. I'm pleased to report that we've achieved a number of new listings across grocery, which have contributed to volume growth across all time periods and share growth in the resulting 12 weeks to the end of January this year. These channel shifts suggest our approach is working and give us much needed positive momentum as we enter this new trading year.

Moving on to premium. We continue to see compelling opportunities across our wider premium portfolio. A particular focus has been on the development of Menabrea and cider brands, which both play in attractive growth segments in the market. Menabrea, our Italian lager achieved growth of 4% in the year as we launched a new partnership with TV chef, James Martin, which saw the brand achieve higher levels of engagement across digital media. We've launched multiple sets of new product formats, supporting our off-trade growth, which has delivered well during the period.

Outcider has continued to grow from strength to strength. In its launch market in Northern Ireland, it's now the top-selling on-trade cider brand. Following a successful launch in Scotland last year, the brand now has nearly 300 on-trade distribution points secured during its first year, and we will now move to launch the brand in England and Wales to continue the growth momentum as consumers demand interesting, exciting alternatives to existing brand, particularly in the on-trade. Having fully acquired the Drygate brand earlier in the year, we have now followed up with the addition of Innis & Gunn to the portfolio.

Turning to Slide 31. In March this year, we were presented with the opportunity to expand our brand portfolio with the acquisition of Innis & Gunn. This acquisition represents an attractive opportunity to the group to further broaden its branded portfolio with a premium, well-established brand with an acquisition that held very low executional risk.

I'm pleased to say the brand has now been fully absorbed into the group's existing operational, commercial and supply chain infrastructure. Whilst we are -- whilst we were the existing manufacturer and commercial partner to Innis & Gunn, our ownership not only improves the commercial return to us, but also allows us commercial freedom to develop the brand from its already strong starting point.

Whilst we bought the brand from the administrators of the group, I should point out that it was not the beer and brewing end of the business that led to the ultimate demise of the parent group, we strongly believe that Innis & Gunn is a great brand capable of sustained growth in our portfolio. So we will develop this brand further, utilizing our established capabilities, route-to-market infrastructure and leveraging our existing capabilities to unlock brand value with minimum requirement for incremental overhead or capital investment.

I hope this usefully serves to illustrate that we are alive and open to external options that add value or deliver synergistic growth potential to the group under our refreshed strategy.

If I can now turn to sustainability on Slide 32 to update on the important progress we've made across this key area of the business. Sustainability remains at the center of our thinking at C&C Group. From ensuring the safe delivery of all our operations across the group to supporting our teams across the business to personally grow and develop meaningful careers, we have continued to make real progress in the last 12 months. Our focus on improving health and safety has stepped up and our initiatives to ensure everyone goes home safely at the end of each and every day have all made very strong progress.

We continue to make good progress towards our climate-related targets driven through reductions in emissions across all our activities and validated by our adoption of science-based targets. To support our ongoing sustainability improvements, we continue to make investments in our sites. The latest such investment is the planned introduction of electric boiler this year to reduce our reliance on expensive gas and also to reduce associated emissions. We also have the planned commissioning of a dealcoholization plant at the Wellpark site, which will allow us to further develop our low and no alcohol portfolio of products.

FY 2027, whilst we will continue all our actions across a broad sustainability agenda, our aim is to simplify the pillars of our sustainability strategy, which will support an even more focused approach to our development and growth of our performance in this important area. So conscious I've been speaking for a long time.

In summary, FY '26 has been a year of significant actions to stabilize the business, driving improvements across the group. We have reviewed where we are and how best to move forward and are setting a new simplified direction with a new team who we believe -- who believe in the approach and can deliver.

Whilst it's early in the year, I'm pleased to report that trading is currently in line with expectations, and we look forward to both a hot bank holiday weekend. I'm looking at the rain pouring down at the minute and the start of the World Cup in the coming weeks. As I said earlier, we'll add significantly more detail in our September Capital Markets Day. But in the meantime, thank you very much for your attention. We're now happy to open up to some questions.

A couple if I may. Without sounding cynical, I could have drunk a few pints of Tennent's over the years to hear a Matthew Clark margin of 3% to 4% at some stage. Why do you think this time is different? And then just secondly, to keep it brief, in terms of your brands, how important is England to your brands? Or can you make the progress that you want through Scotland and the island of Ireland?

So on the Matthew Clark margin, I've certainly heard tale of all sorts of numbers from history, some stretching into high single digits. I think a 3% to 4% margin is the right sort of level to aim for. It will see us significantly improve from where we are, but we've been there in the past.

When we look at our operation, when we talk to our customers, when we look at the service proposition we give, when we look at the resourcing we provide, I think we can provide terrific service, great value for money and an amazing choice. And I think really, as long as we continue to support those 3 things, then the margin is within our grasp. So we have the commercial control opportunities to improve. We have the operating improvements in hand. And I think it's just a stepped movement towards that.

So I understand it's been there in the past and the aspiration has been there. But this time, I think, hopefully, in September, we can demonstrate how we will get there, when we will do it and what the steps are and that they are largely within our control rather than outside of our control.

How important are our brands in England? I think, look, it's great to have a very strong regional business. I think it's a great starting point. But the GB business has a huge number of consumers. We have great understanding of what's going on in the market. Our brands are scalable and developable, both in their core markets and wider. And so I think this is about getting our portfolio right. It's about looking at the portfolio, as I described slightly differently.

A lot of our core brands are in the Celtic Crescent, if you like, but quite a number of our premium brands and our heritage brands sit outside of that, and we just need to focus on them. So I think it is important, but we'll grow from a position of strength, and we need to build the plans over time. So I don't see it being a rapid change in focus. But I think over time, we will do more in England and Wales.

Fintan Ryan here from Goodbody. Just a few questions, please.

Firstly, in terms of the brand strategy, how -- you've talked about going for a multi-beverage model within Ireland and Scotland. Like, how sort of off-reservation is that? Is that into soft drinks or own wines and spirits? Just sort of your thinking there.

And sort of related to that, like looking at the slides, you talk about basically 1.9 million hectoliter capacity in brands, but you've got production capacity across beer and cider, 6 million. Like is there a version of the world where maybe you'd look to consolidate some of the capacity to save some costs?

And then just secondly, maybe it's probably one for the Capital Markets Day in a few months. But as you think about the distribution business, how should the product mix change versus what you've shown on the slide there? Like or is that the sort of the 64% beer and cider? Or is that sustainable going forward?

Okay. Let me try and take some of these. Look, I think we have historically been a brewing cider and wholesaling business. We haven't spent a lot of time outside of those kind of core beer and cider products. We need to have a much broader view of the consumer. We sell a lot of soft drinks. We sell a lot of juices. We sell a lot of water. We sell an increasing amount of low and no alcohol beers. The lines of consumer consumption are increasingly blurred. So I think we just need -- it's philosophical. We need to have a different view of the market. We are a multi-beverage business, and we have skills and capability that we can leverage there.

In terms of the capacity, I mean, I think it gives us optionality. My point today is that probably it's -- one could see it as either a weakness, but I see it as a strength. I mean we have a lot of capacity that we can grow our business. We're agile, we're flexible. We can move quickly when opportunities arise. The operational base that we have is broad, and it's as I said, it's very flexible. So we're just really highlighting that as a strength that perhaps the market doesn't really understand. And it extends into our broader supply chain as well. So it's not just manufacturing, it's our route to market. And in development of brands and development of a business model that works, then I think it's important.

The distribution mix, it is what it is today. It's drifted probably somewhat unintentionally by us as a company. We are now very focused on our mix and we want to be more intentional. Now at the end of the day, as a business, we have to supply the market what the market wants.

But I think there's more we can do to drive our mix, particularly towards our own brands and particularly where we've got a differentiated service offering to our customers, then I think there is more we can do. And if the market changes around us, then we need to be alive to that, but we need to be much more intentional about what we're selling to whom and why. And I think we've had a difficult few years where we were just keen to make sure we were selling something. And now we're going to be a lot more intentional...

Damian McNeela, Deutsche Numis. Just on the sort of the cost profile of the business, can you provide a little bit more detail on where the major hedges end? And also what's happening with third-party pricing, what you've seen there and what your plans are with that?

And then just on the brands business, obviously, the priority there is to grow volumes. And this may be a question for September, but can you give us an indication of what level of volume growth you think these brands can deliver at the minute, please?

Do you want to cover the hedging?

Yes, sure. So the hedges, they do vary across the key cost lines, but they're pretty well covered across FY '27. As you get through the second half, some of those will start rolling off and -- but pretty well covered. fuel and freight is probably where there's the greatest exposure, but not hugely material. Yes. And overall, we're already -- I mean, before external events kicked off, we were already planning on the basis of there being cost inflation going into this year and that level of cost inflation is kind of what we're expecting really as we see it.

Yes. Damian, on -- you said third-party pricing, just...

I think [indiscernible] your base? So what are they doing and...

So by and large, that generally follows a set pricing profile, and we've moved manufacturing, if we call them that, brand partners, manufacturers, whatever you want to call them, move that pricing through our wholesale system. We're not seeing or hearing any changes to that.

Currently, we changed our pricing position earlier in the financial year. We would like to think that we can hold that for the time being. But obviously, we'll respond to whatever comes along in the market. But currently, not seeing any particular momentum to change that. Now it's quite a dynamic position, obviously, from a cost base point of view and everybody has got different hedging. But certainly, we'd like to think we're holding it for the time being.

On the volume growth position, look, I think you're right, we'll cover more of this in September. But I think it's a mentality change for me in that we look at our branded business and the company-owned brands, and we want them to grow, which is quite different to where we have been, where I think we've been managing a little bit more for profit performance rather than necessarily volume growth. And it's quite a big shift in mentality to go in and want to grow the volume, and we're starting to see the thinking and the planning around that. So I'll not give you an absolute number, but to say that we want Tennent's to be a growth brand in volume, not just in revenue. So we don't just rely on price or mix, but we're relying on actual volume consumed.

Cathal Kenny from Davy. A couple of questions from my side. Firstly, to Adam, just the outlook for free cash in the current financial year, conscious there's a lot of moving parts in the year just passed.

Secondly, on MCB, going back to the first question on margin. Does the mix need to change in order to deliver the 3% to 4%? Or can you achieve that of the current mix?

Third question then is on premium brands you've called out. I know you've added Innis & Gunn and Drygate. You've highlighted the portfolio impact require some investment, just understanding the scale of investment there and maybe the associated opportunity.

Actually a follow-up on MCB as well. Just in practical terms, does the merger between Matthew Clark and Bibendum, what does that mean in practical terms if I was in the organization in terms of SKUs, customers, et cetera?

The margin mix question, yes, we've got to do it with the mix as it is. So it will be multifaceted cost range, complexity, commercial control, buying margin. Those are all the things that -- but we cannot be reliant on suddenly selling a lot more of any particular category. We've got to do it off what we've got.

In terms of -- I'll try and answer that, what does it feel like? So what does it feel like if you're in -- well, historically, you were generally working for Matthew Clark or Bibendum. The biggest change is -- well, there is organizational change in reporting lines and team dynamics, but the biggest change is you are working off a single product list.

So rather than having multiple wine lists, for example, then we have consolidated all into one high-quality wine list that is suitable for all customers rather than having somebody turning up from Bibendum on a Monday and somebody from Matthew Clark on a Tuesday trying to sell a different range of products. So better for customers, we think, and better for us and more efficient.

Free cash flow.

I'll be. Yes. So I mean free cash flow in FY '26 was EUR 45 million pre-exceptionals. It was about EUR 25 million post exceptionals, down about EUR 20 million year-on-year. The big items within that, obviously, with the working capital outflow, not expecting that in the 12 months to unwind and reverse, but not expecting it to repeat either. So that's a big -- that's probably the big moving item. And then over time, we'd expect those exceptional cash flows to come down as well.

Other than that, if you look at the table of free cash flow down from EBITDA down to free cash flow, not a huge amount of movement in any other items. Maybe a bit of a tax benefit, maybe this year. So we may see a small cash tax, maybe with a cash refund coming through, but working capital is a big one and then exceptionals.

Okay. I come back on the investment on premium brand. So I mean, we need to be alive to opportunities to make a decent return out of acquiring a business, having the manufacturing footprint and the route to market is an important part of that. So we can very quickly both integrate products into our system from an operational standpoint and from a commercial standpoint. I guess we'll take each on its merits. Some will be opportunistic and some will be by design. And hopefully, we can give a better insight into that in September when we take you through where we see the opportunities in the portfolio.

Stephen Kennealy from Barclays. You had 4% growth in the Branded division, mostly driven by 9% pricing. Could you provide some color into how much of that was mix and how much is price?

So pricing would be low single digit and the rest of it would be driven largely by the mix.

Just a couple on -- firstly, on MCB. What does the merger of Matthew Clark and Bibendum mean for the 6,000-odd SKUs that you have at the moment? Does that need to go down that number? And is that number at the moment currently representing the shift in mix that you have seen across beer versus wines? That's one.

And then secondly, for that ambition of 3% to 4%, do you need the market -- on-trade market in general to stabilize in terms of overall alcohol consumption? Do you need it to stabilize in terms of the shift change happening between wines and spirits and wines and nonalcoholic drinks?

I'll answer the second one first. I think we've got to live with whatever is going on in the market. We need to make our business model more flexible and resilient and capable of handling that. We need to get our customer proposition right, and we need to get our ranging right, but we can't dictate what people will buy. It's a wholesale business. The customers -- we have a lot of businesses where we are the primary supplier and we supply everything. So if the consumer dynamics change, we need to be able to manage that and flex our supply chain costs, our overhead costs and our buying and selling margin appropriately. So we have to be able to work out how to do that.

In terms of the MCB point in general around the size of the portfolio, I think there is work to be done. And so the bringing together in the single line list is only the start. So we've got more work to do around customer proposition to work out what is the -- what gives us a competitive advantage and what just gives us complexity.

And so to have over 100 vodkas in our range, is that a net positive? Or is it a net negative? I think a lot of this is just about putting the right controls and disciplines in place. And we want to be a full-service provider. We want to continue to give people industry-leading service, value and range, but we've got to have some bookends around it.

Great. Well, look, thank you all very much for your time today and your attendance. It's much appreciated. And we look forward to an update in September at our Capital Markets Day, which will be in advance of our next scheduled update at the half year. So great. Thank you very much.

Well, good morning, ladies and gentlemen, and welcome to the C&C Group FY '26 Half Year Results. My name is Roger White, and I'm joined today by Andrew Andrea, CFO. I'm sure you will all know that in due course, Andrew will be swapping barley apples and wheat for tomatoes and pepperoni as he moves from drinks to food and from a wholesaler to operator moving into Domino's Pizza CFO.

There will be plenty of time to wish Andrew Bon Voyage in due course. In the meantime, we have plenty to do in the period he's still with us. And I know that Andrew is fully focused on C&C Group across the whole of that period.

Today, we will start with the highlights of the last 6 months before I hand over to Andrew, who will give you a detailed review of the financial performance in the first half of '26. I will then update on our current thinking regarding strategy, followed by a brief operational review of the first half, a closing summary and outlook before we move on to some Q&A in the room.

Now moving directly on to Slide 4 in your packs. We've delivered a solid performance across the first half of FY '26. From a market context perspective, it's been a mixed period. The well-publicized challenges for the hospitality sector have accelerated across the past 6 months. Increased operating costs and mixed demand has impacted most operators. However, some decent summer weather certainly lifted the mood across the sector at certain times across the summer. However, as welcome as the good weather was, it did not lead to positive volume performance across the total market.

At C&C, we focused on improving our efficiency, driving out costs and delivering great service to our customers. This has underpinned our performance in the period, leading to a 4% increase in our operating profit. Both our reporting segments, brands and distribution improved margins, and we continue to deliver strong free cash flow, which in turn has supported our capital allocation choices with further returns to shareholders via increased dividends and further execution of our share buyback plans.

Revenue in the period appears subdued, but reflects in the main, the transition of contracted Budweiser Brewing Group volume out of the group alongside some thinning out of some lower-margin contract and customer volumes, something which is likely to continue as we look forward and focus our efforts on improving margins, in particular, in the wholesale part of the business. It's been a busy 6 months for the teams inside the business where we have worked hard on business improvement across control, simplification and business process redesign, alongside team development and our initial actions on brand development and innovation.

Improvement in C&C is underway, but there is much to do, and it will take time to feed through to our performance. I would like to take this opportunity to thank all 2,850 colleagues at C&C Group who continue to work hard to serve and support all our customers and consumers at the same time as we seek to improve the business.

Now I'm going to hand over to Andrew, who will take you through the detailed financial review for the first half. Andrew?

Thanks, Roger. So moving on to the next slide and starting with the headline financials. As Roger just alluded to and as we reported back in September, revenues were 4% behind last year, and I'll come back to that in a moment. However, we've made operating margin improvements in both our Branded and Distribution segments. That's helped drive group margins up 40 basis points and consequentially, that's driven positive momentum in each of the key profit metrics, most notably operating profit up 4% and double-digit growth in both PBT and earnings per share.

From a cash perspective, we continue to be strongly cash generative. There have been a couple of one-off items, which I will expand on later, but the underlying cash flow of the business continues to be strong and leverage is in line with last year at 1.1x. So a business continuing to generate strong cash flows underpinned by earnings progression.

Turning now to revenues on Slide 7. But as you can see from the chart, the majority of the revenue decline was anticipated and relates to the loss of the BBG distribution in Ireland. Just to remind you, this will annualize in January. So there's a little bit more of this to come through in the next 3 months or so. In our underlying distribution business, as widely reported in the market, national customers are reporting like-for-like absolute sales growth, but volume decline in drink, and that's reflected in our own distribution performance. And we are seeing some rationalization in the estates of many of our big customers.

In the U.K. on-trade, cider has underperformed. Magners and Orchard Pig have seen lower sales this year. Roger will touch on off-trade progression, but on-trade is harder to land, and that's reflected in the sales performance. But encouragingly, we've seen an improvement in revenues in both Bulmers and Tennent's, our 2 core brands overall.

So moving on to earnings. On the next slide, please. Thank you. We've seen operating margin percentage improvement in both Branded and Distribution. And this is driven by 2 key areas of focus in our business across both segments. The first of those is a focus on efficiency through our Simply Better Growth program, driving costs lower through the organization. But secondly, a much more disciplined approach to trading. So what we mean by that is, we want to run a business with sustainable earnings at an appropriate level of margin. We will actively exit things that don't earn us money. It's the classic failed is vanity, profit sanity equation. But by applying that, as you can see, that margin growth has driven absolute operating profit growth in both of our trading segments.

Turning now to costs on Slide 9. By way of reaffirmation, our FY '26 costs are in line with our expectations. Modest inflation is the underlying theme for this year. And for FY '27, we are starting to hedge some positions. But as things currently stand, we're anticipating another year of modest inflation overall. There's nothing at this stage that is not in line with our expectations.

So moving now on to cash flow and balance sheet. From a cash perspective, as I mentioned earlier, we've seen strong cash generation in the period. But as you can see, we've got a couple of one-off items bolstering that cash flow overall. First of all, from a CapEx perspective, our program this year is second half weighted. We're still guiding full-year CapEx of around EUR 18 million to EUR 20 million, and we've had a GBP 10 million benefit on working capital. I'd expect that to level out in the second half year. So GBP 15 million of that GBP 20 million uplift should flow back in H2. We have closed out some cash positions with the revenue that has given us an income tax benefit in the period. But overall, our aspiration is for free cash flow to be at a similar level to that which we generated in FY '25.

Moving on now to debt and leverage. Our borrowings have increased slightly in the period. I'd expect that again to level off in the second half year. We've closed out a couple of lease negotiations on a couple of our bigger depots. So our IFRS 16 obligations have increased in the period. But our leverage, and just to remind you, our focus is on borrowings to EBITDA on a pre-IFRS basis is at 1.1x, in line with last year. And by way of reminder, our financing is long dated with headroom. So we have an RCF and term loan extending out to January 2030, and a couple of private placement notes maturing in 2030 and 2032.

So we've got a prudent level of leverage, headroom against our facilities and no short-term refinancing requirements, which gives us cash and capital flexibility. So what does this all mean, then wrapping this up for capital allocation. Well, our primary driver of increased cash generation is growing our earnings in the medium term through growing EBITDA. But importantly, our underlying cash flows outside that are quite predictable. So working capital is pretty stable. There are opportunities, most notably rationalization of our SKU base. Our CapEx is modest in nature. We're forecasting somewhere in the region of EUR 15 million to EUR 20 million of CapEx year in and year out.

And because of the finance facilities we've got, our finance costs are stable, and we have a stable effective tax rate overall. What that means, therefore, is we retain and maintain our aspiration of a business generating at least EUR 75 million of free cash flow in the medium term. And that capital allocation priority is to honor our commitment to return EUR 150 million back to shareholders in the 3 years to FY '27. And that will be driven through a combination of growing our base dividend. We've announced a 4% increase in our interim dividend and the option of either share buybacks or special dividends. Clearly, our preference is for the former, and we completed the latest EUR 15 million tranche of share buybacks in September of this year.

So including the interim dividend, we've announced just over GBP 90 million of returns to date. So we've got around GBP 60 million to go. If we add in our dividend expectations, that means over the next 18 months, we've got around GBP 30-or-so million of buybacks to achieve in that 18-month period. And in generating that cash flow, coupled with our financing flexibility, we do have the ability to invest in strategic growth opportunities should they arise. And clearly, that will be done on a case-by-case basis and returns driven. Underpinning all of that is a target leverage of 1x earnings overall in the medium term. But what this demonstrates is that we have a business that's generating predictable cash flow. We've got very clear capital allocation methodologies underpinned by a low level of leverage overall. That's everything from me. I'll now hand back to Roger.

Thank you, Andrew. I'd now like to take a few minutes of your time to update on strategy before I talk through a brief operational review of the first half.

So turning to Slide 14 in your packs. It's now around 9 months since my first day at the C&C Group, that time has certainly flown by. I've spent most of my time during the last 9 months just building my understanding of the business and the markets we operate in. It's true to say that we certainly have some complexities as a business, but we also have a range of opportunities and balanced with challenges. Let me update you on where we are thinking regarding the direction of travel of the C&C Group strategy. And if I can start by looking backwards to just set some context. C&C Group has been built over time via acquisition of multiple businesses to create a scale business across multiple markets and multiple geographies. However, integration has not been prioritized in this business build. So systems, policy, procedure and even cultures have in many ways not been harmonized.

We, therefore, operate in multiple business models within a group structure, which at times has been unclear in its strategy. In addition, we struggle to realize the benefits associated to our scale. In recent years, to address this, the stated objective has been to create an integrated one C&C approach, attempting to push our group into one operating model. However, this has not been fully delivered due to the complexities of the businesses and the lack of historic integration that I mentioned a moment ago.

So we currently operate in a slightly uncomfortable middle ground, neither as an integrated group nor as discrete business units. This reflects in our cost base, it reflects in our controls and it reflects in our focus as a business. We do, however, believe that scale alongside our brands and wholesale model can bring significant benefits in the markets we operate in and thus supports the principle that the C&C Group has a rational role to play in the creation of value across the beverage markets we operate in.

Moving on to Slide 15. As we look forward, our immediate priority is to evolve how we operate as a group, simplifying and focusing on execution as we aim to create value from our scale and expertise, both centrally and locally. Our view is definitely that the beverage sector is a great part of the consumer goods market. It has deep consumer penetration across multiple occasions and has products and brands for everyone, whether locally or globally and whether consumed in a hospitality venue at home or even on the go. We can develop our position in this market as a highly credible brand owner and developer, supported by our position as an experienced and sizable wholesale operator. By leveraging our enviable scale alongside our market-leading reach, range and service, supported by our industry-leading category expertise, specifically associated to the hospitality sector.

We need to develop further the winning consumer and customer propositions that will drive our business forward successfully. In the meantime, our operating segments will remain Branded and Distribution. We have many things to occupy us as a business in the coming period, but I would boil them down to these 3 simple objectives: simplifying our core central operations, processes and reducing our costs, growing volume in our branded segment and improving margin in our distribution segment.

To achieve this, there are multiple actions required, some of which are already underway, others we will develop in the coming months. This will lead to an updated set of performance outcomes and longer-term performance targets, all of which we will set out in May 2026. I believe this evolutionary approach will yield the best outcome for shareholders in the short and medium and long-term and lead to the delivery of our longer-term strategy from a much more solid starting point.

Now turning to Page 16. As we look forward and plan how we'll shape and grow the business, one thing underpins all of our ambition, and that is the building of a winning culture where performance and people go hand in hand. To support our evolving strategy, we aim to create an agile, inclusive and performance-driven culture that supports our local hero challenger status, providing our consumers and customers with a great experience, whether that be associated to our brands, our supply or even corporately. As you can all see from the slide, there are a number of work streams across the organization, talent, leadership, communication and capability, all of which tie into our cultural development and all of which are necessary to meet our ambition. However, in the very immediate term, we are still very much fixing the basics across our business to ensure that we are building from the most solid foundations. These foundations will support our operating structures and our growth ambitions as we progress the strategy development of our business.

Now turning to Slide 17. Moving on to review the last 6 months, let me briefly update on markets brands, operations and our responsibility agenda. Firstly, turning to consumers and markets on Page 19. Consumer behaviors remain significantly influenced by economic factors. Confidence remains fragile. And as costs in hospitality have risen and consumers have had to shoulder the burden for this, it has led to some volume issues as consumers simply cannot afford to enjoy hospitality occasions as frequently as they historically have. In addition, when they do go out, value for money takes on even more importance. The drive for value has also impacted choices, not only where to visit, but what to consume while you're there. This is manifested in the higher proportion of sales in long alcoholic drinks products, somewhat to the detriment of wine and spirits. This picture speaks to the complexity that exists in our markets and reinforces the importance of our portfolio breadth and market coverage as a business.

Now our branded portfolio is performing well in these challenging market conditions, supported by our strong regional routes to market. Our core brands have a unique long-standing importance to consumers within the markets they operate, and we are only just starting to tap into the possibilities of developing our brands further, whether it's in our well-known core or in areas where we currently have a smaller, more niche presence. As I mentioned earlier, we are confident in the potential of the wider beverage market to sustain long-term growth, and we believe there is potential for C&C to grow within that context.

Now turning to Slide 20 and specifically to talk about some of our core brands. 2025 marks a major milestone for the Tennent's lagger as we celebrate 140 years of brewing Scotland's favorite beer. Despite market headwinds, Tennent's has shown remarkable resilience, broadly maintaining its market share across Scotland. In the off-trade, we have widened the gap to the 2 nearest competitors, while in the on-trade, our rate of sale is 2.5x that of our nearest competitor. Such as the strength of the brand performance, Tennent's is now a top 10 lagger brand by value across GB as a whole, outperforming a number of leading global brands.

Tennent's does play a unique role in Scottish culture, and we have continued to be at the heart of what matters to our consumers from rewarding Scotts for the best and worst Scottish summer weather being part of the conversation and the experience at the Oasis concerts as the tour of the year arrived at Murrayfield. In fact, across the summer set of concerts in Scotland's 2 national stadia over 365,000 pints of Tennent's were enjoyed.

Our last financial year-end review, I said we would bring innovation back to the brand. And I'm delighted to say that we've just launched Tennent's Bavarian Pilsner [indiscernible]. And this is a 4.7 ABV limited edition beer with a distinctive Bavarian flavor coming to the market this month. This is the first of a number of planned launches for the Tennent's brand built through our new innovation team and process. In addition, we brought a significantly improved reformulated Tennent's Zero to market alongside an expanded pack range for Tennent's Light, critical to the growing number of adults and GB saying they are moderating. Tennent's is an amazing brand with so much more potential still to be unlocked.

Moving on to Slide 20 to talk about Bulmers. Bulmers has delivered a strong first half with total revenue up more than 6%, driven by focused brand investment and a revitalized brand communication strategy. In the on-trade, Bulmers original growth accelerated across the reporting period, up over 10% in the 3 months to July, benefiting from the undoubted spell of decent summer weather, while in the off-trade, it outperformed the cider category with growth of 10% and a 1.8% share gain.

Power brand, as measured by Kantar, is up 9.5% year-on-year, reflecting the impact of the above the line and digital campaigns with its our time advertising returning for a second year backed by a 33% increase in media spend, helping Bulmers become the most salient long alcoholic drink brand in Ireland. We backed Bulmers Zero with Tonight's Zero, Tomorrow's Hero campaign, reaching almost 3 million consumers with both strong growth and share growth in the nonalcoholic cider category. Bulmers Light continues to grow with volume up, meeting the growing demand for lower calorie options. Like Tennent's 2025 was also a milestone year for Bulmers as the brand turned 90. We celebrated, as you would imagine, in both the trade and with consumers and employees. So in its 90th year, Bulmers is in good health, growing, innovating and connecting with consumers.

Now moving on to Magners on Slide 22. I told you earlier in the year that we were at the beginning of a journey with Magners, and I'm pleased to say that we are on our way, seeing some positive initial impacts from our efforts. However, this is a journey that will take time and commitment. In the period, we have made our largest brand investment in over a decade, which has seen the magnetism campaign begin a renewed energy to the brand and consumers. It's already driving some strong brand health improvements in awareness and consideration and the social engagement scores are moving in the right direction. This marks a real shift in momentum after some very challenging years.

Magners remains the #1 package cider in GB on-trade, selling over GBP 90 million in the last 6 months. So we do have scale, but we now need to drive momentum as we improve consumer awareness and drive brand reappraisal. We have new packaging that has now been rolled out and is driving increased consumer perceptions of quality and our focus on pack mix is beginning to bear fruit. Recovery journey for Magners is only just underway.

Slide 22 highlights a number of consumer actions made to build brand momentum, including a number of PR-led activities, whether that's in concerts such as Belsonic in Northern Ireland, where we reached an audience of over 200,000 people with the Magners brand. Magners reach continues to grow globally, exported to 45 countries and including the U.S.A, I couldn't resist the picture of a Victoria's Shane Lowry enjoying Magners after clinching the rider cup for Team Europe. Magners is therefore, regaining its edge with renewed brand energy, improved consumer perception and a clear plan to drive value and growth into FY '27.

Now moving to Slide 23. Our premium portfolio continues to grow, driven by Menebrea's strong performance in H1. On-trade volume sales are up 8%, with significant growth, particularly in Scotland. For Menebrea, we focused on building awareness and specifically food credentials, particularly through a strategic partnership, including with the well-known celebrity chef, James Martin. This has helped us drive our awareness now at 13% in GB, but a significant awareness in Scotland of over 28%, cementing a key point of difference, which is based on the insight that 73% of [at-home] beer serves are now accompanying food. We've launched new pack formats supported by our biggest off-trade investment to date, and we've delivered the strong growth that I mentioned.

We've anticipated across multiple channels from [indiscernible] and digital screens in stores through to a traditional Italian beer window in London, which has brought a touch of Florence to the streets of London and driven national media coverage. Meanwhile, our exciting modern new cider brand Outsider is gaining momentum. It's now the #2 cider brand in Northern Ireland behind -- in the on-trade behind Magners, and it's expanded into Scotland with nearly 300 listings. In the off-trade, our new 4 packs and 10 packs have been listed in over 700 stores in H1, building on the strong digital-first marketing and consumer engagement position. So Menebrea and Outsider are proving the case that our premium and challenger brands, can drive growth, relevance and value across the portfolio.

Now turning to the distribution business on Slide 24. Our distribution business, specifically Matthew Clark Bibendum operates a full-service composite supply model across the U.K. hospitality industry from 11 warehouses, it services 12,000 customer delivery points with a range of over 8,000 SKUs. I talked when we last met about a Road to Recovery for MCB. And I am delighted to confirm that if the measurement of recovery relates to customer service, choice and value, then we are in a much improved position.

The tangible measure of service performance is now fully recovered, and we are now firmly into the phase of improvement in our operating efficiency from a strong base level of service. Whilst we have seen our product sales mix move in the period in line with market trends, we are starting to see the benefits associated to our technology investment in this area, such as our sales force efficiency and our ability to improve our customer performance, which is beginning to take shape. This is likely to see some short-term attrition to our customer numbers as we move out of less commercially attractive business and seek mutually beneficial longer-term commercial supply partnerships with our customers.

This remains a highly competitive sector, but we're working to ensure we are increasingly capable of providing winning customer propositions at the same time as we provide our branded partners with unrivaled on-trade access.

Turning to Slide 26. Let me give you a short update on our sustainability and responsibility performance. We see our sustainability agenda as a core part of our business operations and simply just part of daily life at C&C. We continue to make good progress in our decarbonization journey across the group with the latest major initiative being the anticipated investment in an e-boiler at our Wellpark Brewery next year to replace our current usage of gas at Wellpark with sustainably generated electricity. This initiative will be a major contributor to our decarbonization plan, but obviously, alongside the multitude of smaller but important actions we take every day. Across the group, our commitment to safety is absolute. In the period, we launched our health and safety Center of Excellence at our Birmingham site, where we train and develop our safety activities for rollout across the wider group. This initiative underpins our improvement plans, ensuring our development of safe working practices are successfully trained across the whole business.

As a group, we continue to invest in technology and assets that meet our responsibility agenda, including the important enabling investment in dealcoholization technology to support our innovation drive into low and no. This exciting investment will be made at Wellpark and is expected to be operational during the course of next financial year. It will give us a technical edge in the production and delivery in this critical product area. So in the broadest sense, we continue to prioritize our responsibility agenda, not only with words, but also with tangible actions.

So moving on to the final slide. In summary, H1 FY '26, we delivered a solid financial and operating performance. We delivered sustained improvement in service to customers and continued to generate strong amounts of cash. Our brand performance was resilient and gives me confidence in our longer-term potential. Distribution has recovered its service, which is critical to us moving to the next phase of margin improvement.

I said in May, there is much to do at C&C. I would reiterate that comment once again today. Market conditions are without doubt challenging, but we now have a clear view of our next steps and where to prioritize our efforts as we deliver the balance of the current year and plan for the next.

Thank you for listening today, and we are now going to open up to questions from the room, if we have any. And we have a microphone. So if you'd be good enough, if you have a question, just announce yourself who you represent and then ask the question.

Douglas Jack with Peel Hunt. Just a quick one on the distribution. How far along the road do you think you are towards removing unprofitable business within that division? I mean what's -- how many years should we look to you seeing that process complete? And what kind of benefit?

I think it's a long-term journey. It's not a short-term position. We provide a wide range, as I said, to 9,000 or so SKUs. Within that 9,000 SKUs, there's work to be done to both improve the range and also streamline the range, and that's to be done with the customer and consumer in mind, but will require a reasonable amount of effort to do it.

So I think I would look at this as a -- this isn't going to happen overnight. It's going to take time. Some of the volume will be contracted. Some of it will require replacement activity behind it, but it's the motivation to work with our customers -- all our customers to give them a better outcome, but also to give us a better commercial outcome.

Laurence Whyatt here with Barclays. I've got a couple, if that's okay. When you talk about this sort of new integration that you're putting the C&C Group back together, are there any KPIs that you are particularly targeting that we should focus on? Is it simply growth in the branded business, margin in the distribution business? Or are there any other indicators that you think are particularly important? Maybe we start with that.

I think there will be lots of KPIs that we will need to pull together and as I say, in May next year, come back to you with a set of hopefully -- properly worked through plans, initiatives and actions and a set of numbers that will go with that and a set of monitoring KPIs. I think today was really just about setting the stall out in what the higher level focus would be and that simplification at the center, margin improvement in distribution and growth in brands are, the areas we're working on the initiatives behind those.

As I said, some are started. We've got a team of people on innovation. We've got a new process design. We've got the first signs of new things coming to market. So we've got growth in mind. We've got a more growth mindset in the service on the distribution business is going well, but we've got a lot of commercial work to be done to get a ranging right and our pricing right. So I think there will be much more to come.

You mean pricing -- it's a clear focus in the industry at the moment. One of your competitors last week was talking around a lot of price being taken during the pandemic period and perhaps a lot more price than inflation. And then for their plan going forward to 2030, they're looking to take price below inflation, albeit ahead of the cost inflation. I was wondering if you have any similar thoughts on the consumer price environment within the U.K. and where do you think your pricing will be able to be?

Look, I -- there are in essence, 2 fundamental bits to our business. There's a branded business and there's a distribution business. And in the branded business, for us, it's about -- as I said, it's about growth, and we want to support our customers. If there is inflation there, we'll look to offset that as much as we can with efficiency and cost. And if we need to pass some on it, we'll be as modest as possible in support of the sector. The distribution business is a fundamentally lower margin business. It's about moving cost through, but being efficient, and we're going to do both of those things.

So I can foresee -- as we sit at the minute, as Andrew said on his slide around materials, we don't see anything from a cost point of view that looks shocking at the minute. We will wait and see how the next few weeks goes. We are hedging for next year, and we can see a very similar sort of low single-digit amount of inflation coming.

Fintan Ryan here from Goodbody. Just a few questions from me, please. Firstly, maybe following on from that last question in terms of margins. Within the 60 basis points branded margin increase in H1, can you break down what was maybe the COGS gross margin? What was -- how much A&P stepped up by? And then what other sort of operational leverage you got?

An equal measure. So I wouldn't focus on one thing. With the margin improvement in branded, we're pulling lots of levers, as Roger has alluded to. So I don't think there's any one dominance in all of those 3, Fintan.

And in terms of A&P spend for the second half?

We're seeing a slight increase year-on-year. So a continuation of that going through to H2, including the continued investment in Magners that we've commenced in H1.

Okay. And maybe just following on from that point. Clearly, I know as a consumer see Menebrea everywhere and like good listing, particularly in Tesco. Maybe it's probably a longer-term question, but do you see any positive synergies in terms of reigniting the Magners brand, reflecting some of the wins that you've got from Menebrea and maybe even bringing Tennent's out of the border?

Look, I think momentum is everything in brands. And to get momentum moving, you need multiple sets of activity. It needs to be a combination of building awareness, growing distribution, bringing something new to market, having great products, convincing people through competitive pricing. There's -- so it's a range of activity. I'm delighted to hear that you're seeing Menebrea everywhere. I don't think we are nearly everywhere, but I'm glad that you're seeing it. I think there is a halo impact. If you are showing momentum, then whether it's consumers or customers or partners all see the positive benefit of that. So we do want to get into that positive momentum with all our brands.

One final question. I think you said to get to the GBP 150 million total cash return, you need to do 30 million buybacks over the next 18 months. Any thoughts of when we should expect that buyback? And basically given the shares have come off a bit recently, why not now?

Well, I think we sort of hold code when we pay dividends and there was an expectation of what the residual dividend will be. We've always said that we will do GBP 15 million or so tranches. So crudely speaking, we've got 2 tranches to go over an 18-month period. And we'll just align that to match to our cash flows, which was always the intention. But it's well within reach is the key point.

Damian McNeela from Deutsche Numis. First question on Magners, Roger. I mean I appreciate that we're at the start of the journey on Magners, but it was a particularly good summer, and we saw the evidence of that in Ireland. What are the challenges that Magners brand really faces in the U.K.? And what work do you need to do to remedy that?

So look, I think the Magners brand is -- has been a great brand in the past, can be a great brand in the future. It's been heavily skewed in recent years to quite high volume, low-value price activity, in particular, in the take-home market. It's lost a lot of its momentum in the on-trade and building that distribution through the draft side of things, it's going to take time to do.

So the starting point is consumer reappraisal, and we started that with the work we're doing and the early results on that look encouraging, but that doesn't feed through immediately into brand performance. We are starting to see trade reappraisal, our customer base appreciate the scale, breadth and positioning of the brand and they seem to positively want to support us. We need to get the distribution moving. We need to rebuild it. We need to move away from the lower value, high-volume price promotional work that's characterized it in retail, and we need to get the distribution in the on-trade moving. That is just going to take us a bit of time.

But if we can have the consumer reappraisal successfully set up, then the off-trade will follow quickly and then the on-trade will take a little bit longer. So I think it is the longest journey.

Yes. I mean most national operators on draft have multiyear arrangements. So you're having to participate as the cycle arises. That will not arise all in a single year.

And then just the second one, I think you mentioned on the distribution business, you were looking for potential customer attrition over the next -- well, can you qualify and quantify exactly the level that we should expect to see and whether that feeds through to revenue and margin?

No, I can't quantify. I think I'm just raising the potential as we look at our portfolio, as we look at our customer proposition, then we need to be adding value to our customers. We need to be creating value for our branded partners, absolutely. But we need to make some margin in doing that. And for me, as a relative newcomer here, I can see some areas where we are not making a suitable return, and that will require us to make some changes. I have got, I guess, I hope that we can find suitable ways of doing that, that doesn't lead to customer attrition, but it would be unrealistic of me to not suggest that there is a risk of that as we try and improve it.

Now I'd like to think that we can grow the business. But we're -- as we said, we're going to focus on improving the margin and some of that might come at the expense in the short term of some turnover if it's not adding value to what we do.

Okay. And then one last one for me. Christmas is just around the corner. What's the trade saying about bookings? And how are you feeling specifically about trading into Christmas?

The sentiment on bookings is positive at the moment. Christmas will happen fairly enough, 25th of December. It's midweek Christmas. So for the trade, that should be good. In Scotland, there's an old firm game in the middle. And a lot of our plans are making sure we land all of that right. So you've got a backdrop of positivity. But I've been in the pub game for a very long time. And what I do know is no matter what your bookings are, the majority of Christmas is impulse. And so no matter what [Hubco] say about bookings. It's what happens in that 2 weeks of Christmas that is mission-critical. So we'll let you know about Christmas on 6th of January.

The focus on the controllables for us, we are well set up internally to ensure that we give our customers the best possible service regardless of the challenges of which days fall, what. How the supply process is going to work, we are well setup to do that. And so as Andrew said, we will wait and see what the absolute demand is. But our most important thing we can control is making sure that we are ready and working with our trade customers to make sure that they have absolutely everything that they need. So when the consumers do walk through the doors that the pubs are well served.

Clive Black from Shore Capital. Always interesting to have results from Scottish company when Celtics manager resigns. Three questions. Hopefully, one is fairly straightforward. I'll ask that first. Just in terms of your assortment, and you mentioned SKU rationalization, a, how happy are you with your assortment? And b, where are you on your rationalization journey?

We are just at the start of the rationalization -- first of all, we are just at the start of the rationalization piece. I think it's basic stuff first. We've got some very deep and very complex ranging in the business. Some of it is fully justified. Some of it is less justified. The aim would be to cut out wasteful areas which are not adding value to our customers rather than just have a target number that we are trying to get down to.

How happy are we with our range? I mean, pretty happy. I mean it's -- we supply such a variety of outlets. It is important that we have that variety of range. It's just, as I said, looking through for the obvious areas where we can make improvements. And there will be some areas of our assortment, I think, that will grow, but equally, there will be other areas that we have over-ranged. So yes, just at the start.

Okay. And then I guess you're going to get this asked repeatedly, particularly after next spring, but of the simplification efficiency program, is it sensible to suggest a fair amount of that has to go back in the business? Or should we be becoming excited about where the operating margin can go in C&C?

I think that's something we can talk about next May rather than today. What's important for us to do is to have deliverable plans and make good choices for the long-term benefit of the value creation that we can do with C&C. I can see, as I said, there are challenges that we can all see, but there are opportunities as well. And I think it's a balanced scorecard that we need to work out which ones we can unlock, how fast can we get to them and how certain can we be of them. So I'll try and answer that when we've got bankable plans.

Okay. Good luck on that. And then lastly, and this, I think, is the most difficult one for any business. You mentioned culture. What is it about C&C's culture you have to change? And how long will that take?

That's a good question. It's not an easy one to answer. I think I would answer it by saying the business has been grown through, as I've said, through acquisition and bringing together businesses. We want to not -- we want to positively embrace our differences. We want to find consistent ways of building efficiency, driving the benefits associated with scale, but we want to unleash our ability to serve customers and build brands and embrace our differences where it's important and where it supports us.

If you travel around our organization, as I have done, and I'm sure many of you have done and you go to the various operating parts of it and you ask people who they work for, they generally work for Bulmers, Matthew Clark, Bibendum, Tennent's Caledonia Breweries. They don't generally work for C&C Group first and foremost, and we need to embrace that rather than try and break it. So I see it more as trying to reestablish what's important for us and trying to get benefit from we have -- what we have -- we have 2,800 and almost 50 colleagues, and they are passionate about the business, and it's just about harnessing that.

So I think you don't change culture quickly, but there is a little bit of back to the future about it rather than trying to do something that's alien.

Great. Thank you all very much for your attendance, either in person or online. And we will draw proceedings to a close. So thank you all very much. Nice to see you all.