15th Nov 2007 14:00
C&C Group Plc15 November 2007 Reorganisation & Cost Reduction Programme Programme expected to deliver €10 million in net savings New Managing Director of Magners - Great Britain to be appointed CCR.I CCR.L Dublin, London, 15 November, 2007: C&C Group plc ('C&C' or the 'Group'), aleading manufacturer, marketer and distributor of branded beverages in Irelandand the UK, today announced a re-organisation and cost reduction programme. Theprogramme is expected to deliver €10 million of net annual savings when fullycomplete. Reorganisation and Cost Reduction and Programme The primary objectives of the cost reduction and re-organisation programmeinclude: - Strengthening C&C's commercial presence and management team in Great Britain, its principal cider market; - Reducing operating costs by realigning the cost structure to the current sales volume base; - Streamlining C&C's organisation structure by merging its Head Office and Cider division management structures. Organisation Structure Maurice Pratt, C&C Group CEO will, on the retirement of Brendan McGuinness,Managing Director of the Group Cider division, incorporate Brendan McGuinness'role into his existing role as Group CEO. Brendan McGuinness has recentlyannounced his intention to retire with effect from 1st May, 2008. The Group is creating the new role of Managing Director Magners - Great Britain.This role will spearhead the growth and further development of Magners withinGreat Britain, C&C's largest cider market. The appointment will be accompaniedby an increase in sales and marketing resources in Great Britain to meet thecurrent challenges of that market. The recruitment process for this position isunderway and C&C will announce an appointment in due course. The Group is also combining the Manufacturing, Logistics, Purchasing andTechnical functions under a new position of Managing Director - Supply Chain.Aidan Murphy, the current Director of Logistics, is being appointed to thisposition. Cost Reduction Programme C&C will deliver cost savings through a reduction in headcount across allfunctions at C&C's manufacturing facility in Clonmel and at its Head Office. C&Calso plans to deliver cost savings in warehousing, stock management and a rangeof other areas within the supply chain function. The combined payroll and othersavings are estimated at €20m and involve a headcount reduction in the region of150 across the Group. In assessing the impact of the cost reduction programme on Group's financialperformance it is necessary to factor in the general upward pressure on costsand specifically the c. 15% increase expected in ingredient costs in 2008/09. In this context the pro-forma impact, on the basis of estimated 2007/08 volumeand revenue, would be an operating margin improvement for C&C's Cider divisionin a full year of approximately two percentage points - representing a net costsaving of €10m. C&C would expect 80% of the improvement to be reflected in the2008/09 financial year. The reorganisation and cost reduction programme, comprising severance and othercosts, will result in an exceptional charge in the current financial year ofapproximately €15 million. Maurice Pratt, C&C Group CEO, commented "Our reorganisation and cost reductionprogramme reflects our sharper product focus on cider and spirits & liqueursfollowing the sale of our Soft Drinks and Snacks businesses. When this programmeis implemented, we will have a more efficient organisation structure and ourcost base will be better aligned with the Group's business needs." He added "We are also investing in increased resources for Magners in GreatBritain to support our growth aspirations in that market." He concluded "This re-organisation and cost reduction programme will affect anumber of C&C's employees which is regrettable. We would like to record ourappreciation for the commitment and loyalty of the affected workforce." About C&C Group plc C&C Group plc is a leading manufacturer, marketer and distributor of brandedbeverages in Ireland and the UK. C&C manufactures the leading Irish cider brand,Bulmers, and the premium international cider brand, Magners, for export to theUnited Kingdom, the United States and Continental Europe. C&C also exportsspirits and liqueurs, including the premium Irish whiskey brand, Tullamore Dew,to over 80 international markets. Investors and analysts Irish Media International Media Mark Kenny/Jonathan Neilan Paddy Hughes/ Ann-Marie Curran Edward Orlebar or Charlotte KirkhamK Capital Source Drury Communications M Communications Tel: +353 1 631 5500 Tel: +353 1 260 5000 Tel: +44 207 153 1523/1531Email: Email: Email: [email protected]&[email protected] [email protected] [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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