C&C Group: Brands Brew Strength, Distribution Still Dilutes

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C&C Group: Brands Brew Strength, Distribution Still Dilutes

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From a cost perspective, the Group appears relatively well positioned, with hedging across

key inputs through fixed-price supply contracts and partially fixed energy costs, reducing near-

term volatility. Importantly, management does not signal a need for further price increases,

implying that margin progression will need to come from mix, efficiency and operational

improvements rather than incremental pricing. This reinforces the importance of continued

premiumisation within Branded and cost discipline within MCB.

Overall, FY26 reinforces the investment case as one of transition. Branded is demonstrating

improving quality of growth, with pricing and mix working more effectively and margins

structurally higher, while Distribution remains the key swing factor, with recovery dependent on

integration benefits, cost actions and stabilisation of mix. The strategic separation of the two

divisions, alongside ongoing simplification, provides a clearer framework for value creation, but

earnings upside likely remains contingent on the successful delivery of margin recovery within

MCB.

Forecasts and PT: We have rebased our estimates following FY26. For FY27E, we reduce net

revenue by -7.5% to €1,511m, with margins now expected at 4.7% (-37bps vs prior). EBIT is

broadly unchanged at €70.9m (+0.3%), as cost actions and early benefits from simplification

offset mix pressure, while EPS is reduced -5.2% to 10.4c. Looking further out, we also lower

FY28E estimates, with revenue down -8.0% to €1,556m and EBIT cut -2.1% to €71.8m, implying

margin of 4.6% (+28bps vs prior). EPS is reduced -7.6% to 11.0c.

Overall, while Branded continues to show resilient growth and margin progression, the