operations REVIEW Third Party Brands UK

C&C Chairman

Third Party Brands UK

Constant Currency(i)

FY2013

FY2012

Change

€m

€m

%

Revenue

116.7

122.4

(4.7%)

Net revenue

90.2

96.8

(6.8%)

- Price /mix impact

(4.0%)

- Volume impact

(2.8%)

Operating profit

5.1

3.8

34.2%

Operating margin (Net revenue)

5.7%

3.9%

1.8ppts

Volume – (kHL)

871

896

(2.8%)

bulmers & gaymers bottles

Third Party Brands UK: This segment relates to the distribution of third party products and the production and distribution of private label brands in the UK. Private label accounted for 68% of the total third party volume in FY2013, up from 63% in FY2012.

Net revenue was down 6.8% in the year. Overall volume was down 2.8%, with a decrease in third party brands partly offset by an increase in volume in private label. This was mitigated in part by improvement in average pricing achieved for both private label and third party products.

Agency: Volume declined 15.2% in the period. Route to market changes in commercial arrangements to service one significant national account in the Scottish market resulted in lower margin factored brands no longer being distributed by C&C. Likewise, route to market amendments in Northern Ireland reduced duty in suspense volume by a reasonably significant amount during the year. In both Scotland and Northern Ireland, the agency brands continue to perform well in the core Independent Free Trade segment of the on-trade.

The reduction in lower value activity improved average pricing by 3.8%, contributing to the overall 1.8ppt improvement in third party brand operating margin.

Private Label: A number of new contracts for cider and beer helped push volume up 4.2% in FY2013. The nature of the new contracts was higher in quality, a point well illustrated by a 2.3% improvement in average pricing achieved and a healthier operating margin.

(i) On a constant currency basis, constant currency calculation is set out on this page

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