Annual Report 2020

1. SEGMENTAL REPORTING

The Group’s business activity is the manufacturing, marketing and distribution of branded beer, cider, wine, spirits, soft drinks and bottled water. Four operating segments have been identified in the current and prior financial year; Ireland, Great Britain, International and Matthew Clark and Bibendum (“MCB”).

The Group continually reviews and updates the manner in which it monitors and controls its financial operations resulting in changes in which information is classified and reported to the Chief Operating Decision Maker (“CODM”). The CODM, identified as the executive Directors, assesses and monitors the operating results of segments separately via internal management reports in order to effectively manage the business and allocate resources. Due to the acquisition of MCB on the 4 April 2018, an additional operating segment was identified in the prior financial year. MCB is run independently with its own Management team and its results are reviewed by the CODM independently of any other element of the Group’s business.

The identified business segments are as follows:-

(i) Ireland

This segment includes the financial results from sale of own branded products on the Island of Ireland, principally Bulmers, Outcider, Tennent’s, Magners, Clonmel 1650, Five Lamps, Heverlee, Roundstone Irish Ale, Linden Village, Dowd’s Lane traditional craft ales, Finches and Tipperary Water. It also includes the financial results from beer, wines and spirits distribution, wholesaling, the results from sale of third party brands as permitted under the terms of a distribution agreement with AB InBev and production and distribution of some private label and third party brands.

(ii) Great Britain

This segment includes the results from sale of the Group’s own branded products in Scotland, England and Wales, with Tennent’s, Magners, Heverlee, Caledonia Best, Blackthorn, Olde English, Chaplin & Cork’s, Orchard Pig and K Cider being the principal brands. It also includes the financial results from AB InBev beer distribution in Scotland, third party brand distribution and wholesaling in Scotland, the distribution of the Italian lager Menabrea, the American lager Pabst, the Chinese beer Tsingtao and the production and distribution of some private label and third party brands.

(iii) International

This segment includes the results from sale of the Group’s cider and beer products, principally Magners, Gaymers, Woodchuck, Wyders, Blackthorn, Hornsby’s and Tennent’s in all territories outside of Ireland and Great Britain. It also includes the production, sale and distribution of some private label and third party brands.

(iv) Matthew Clark and Bibendum (MCB)

This segment includes the results from the Matthew Clark and Bibendum businesses. Matthew Clark is the largest independent distributor to the UK on-trade drinks sector. It offers a range of over 13,000 products, including beers, wines, spirits, cider and soft drinks. Matthew Clark also has a number of exclusive distribution agreements for third party products (mainly wines) into the UK market and also has a limited range of own brand wines. It has a nationwide distribution network serving the independent free trade and national accounts. Bibendum is one of the largest wine, spirits and craft beer distributors and wholesalers to the UK on-trade and off-trade, with a particular focus on wine.

The analysis by segment includes both items directly attributable to a segment and those, including central overheads, which are allocated on a reasonable basis in presenting information to the CODM.

Inter-segmental revenue is not material and thus not subject to separate disclosure.

(a) Analysis by reporting segment

Of the exceptional items in the current financial year of €91.0m, €7.2m relates to Ireland, €27.7m relates to Great Britain, €39.8m relates to International, €16.2m relates to MCB and €0.1m is unallocated as it does not relate to any particular segment. Of the exceptional items in the prior year of €7.8m, €0.8m related to Ireland, €1.1m related to Great Britain, €5.2m related to MCB, €0.2m related to International and €0.5m is unallocated as it does not relate to any particular segment.

Profit on disposal of €0.9m in the current financial year, €2.6m relates to the profit on disposal included within International offset by a loss with respect to the sale of Peppermint within MCB of €1.7m.

The share of equity accounted investments’ profit after tax before exceptional items of €3.1m relates to Great Britain. In the prior financial year, the share of equity accounted investments’ profit after tax of €4.0m related to Great Britain €3.9m and International €0.1m. The share of equity accounted investments’ exceptional items of €2.4m relates to Great Britain (2019: €3.3m related to Great Britain).

Total assets for the year ended 29 February 2020 amounted to €1,441.9m (2019: €1,429.4m).

(b) Other operating segment information

(c) Geographical analysis of revenue and net revenue

The geographical analysis of revenue and net revenue is based on the location of the third party customers.

(d) Geographical analysis of non-current assets

* Includes IFRS 16 Leases in the current financial year of €76.7m (note 18).

The geographical analysis of non-current assets, with the exception of goodwill & intangible assets, is based on the geographical location of the assets. The geographical analysis of goodwill & intangible assets is allocated based on the country of destination of sales at the date of acquisition.

(e) Disaggregated net revenue

In the following table, net revenue is disaggregated by primary geographic market and by principal activities and products. Geography is the primary basis on which management reviews its businesses across the Group.

* Other sources include wholesale (excluding MCB), own label, contracts and non-alcoholic beverages (NABs) revenues.

* Other sources include wholesale (excluding MCB), own label, contracts and non-alcoholic beverages (NABs) revenues.