C&C Group plc (CCR) Earnings Call Transcript

Good day and welcome to the C&C Group plc AGM 2020. Today's conference is being recorded. At this time, I would like to turn the conference over to Stewart Gilliland. Please go ahead, sir.

Good morning, ladies and gentlemen. I'm Stewart Gilliland, [ Chairman of the Board ], and thank you for listening to the 2020 [ AGM ] of C&C Group plc. This is taking place on the constrained circumstances this year due to COVID-19. At the company's offices to keep a road in Dublin are my fellow directors: Vincent Crowley, our Senior Independent Non-Exec Director; and Emer Finnan, Non-Exec Director and Chairman of our Audit Committee. We're joined on the conference call facility by our other directors and general counsel and company secretary, and many of you, our shareholders. This is an unprecedented situation. As a consequence of the COVID-19 emergency measures introduced by the Irish government, we have asked the shareholders to refrain from attending the AGM this year. I, myself, am unable to physically attend this meeting. Therefore, when it comes to formal business, Vincent will act as the Chairman of this meeting, in accordance with the articles of association of the company. Let me start by saying that we enjoy the opportunity the AGM provides each year to meet and communicate with you, our shareholders. But it's just not possible this year to have a meeting in the ordinary way. This year, we've been asked that shareholders exercise their rights by voting in advance through the appointments of proxies, and we have also invited shareholders to follow the proceeding by this conference call. There will be no Q&A session today. Shareholders have been given the opportunity to submit questions for the Board in advance of the meeting, however, none has been received. We do hope to have an opportunity late in the year to meet our shareholders. The Board proposes to convene towards the end of the year, a separate extraordinary general meeting to consider a number of resolutions to be proposed in connecting with the migration of security settlements in C&C securities from the current settlement system, CREST, to replacement system, Euroclear Bank. This migration is required as a result of Brexit. We will provide you with further details of the proposed migration later in the year. The Board is hopeful, however, that the AGM will provide an opportunity to engage with you, our shareholders, in person, and the Board intends to give a general review of the business at the AGM and have a general Q&A discussion at that time. Before we start, let me also mention some recent changes to the Board. We were very pleased to announce on the 9th of July the appointment of David Forde as group CEO. David joins us from Heineken where he served as Managing Director of Heineken U.K. for the past 7 years. I have agreed to be continuing my role as Interim Executive Chair, until David joins C&C at the latest in early 2021, at which time, I will revert back to role of Non-Executive Chairman. Jonathan Solesbury, who has also served the group as the group's CFO since 2017, will also step down from the Board at the conclusion of this AGM but will remain with C&C until 1st of September to facilitate an orderly transition. Patrick McMahon has been appointed as group Chief Financial Officer and will be appointed to the Board with effect from the conclusion of the meeting. I would like to take the opportunity to put on record to thank Jonathan for his significant contribution to C&C. Now to proceed with the formal business of the meeting, let me hand over to Vincent Crowley, our Senior Independent Non-Exec Director, who will now act as Chairman of the meeting.

Good morning, ladies and gentlemen. I am Vincent Crowley, and welcome to the 2020 Annual General Meeting. A quorum is present, and I declare the meeting open. I would now like to commence the formal proceedings. Let me outline the voting procedures, which we will follow today. This year, given the restrictions on shareholder attendance at the meeting and in accordance with the articles of association of the company, voting will be done by way of a poll, a written vote, on each of the resolutions put to the meeting. We have encouraged shareholders to vote by proxy. Taking the vote by poll ensures that the votes of those shareholders not present at the AGM who have appointed a proxy are counted on the resolutions and in proportion to the number of shares they hold. We have appointed Link, the company's registrars, to act as scrutineers. For convenience, I will direct that the poll on all of the resolutions will be held at the end of the Annual General Meeting. I propose, with your consent, to take the notice of the meeting as read. Thank you. Resolution number 1, which relates to the adoption of the financial statements and director's report. We will now proceed to vote on the resolutions, which I will formally propose to the meeting. The full text of each of the resolutions is set out in the notice of meeting, a copy of which you will have received. I would now like to propose that the financial statements for the year ended 29 February 2020 and the reports of the directors and the auditors thereon be and are hereby received by the meeting. The poll on this resolution will be held at the end of this AGM. Resolution number 2, a to i, reelection of retiring directors. I'll now turn to the reelection of directors. There are 9 resolutions in the notice of meeting, dealing with the reelection of directors. In line with the provisions of U.K. Corporate Governance Code, C&C Group has adopted a policy of annual reelection for all Board Directors. Consequently, all of the continuing directors will offer themselves for reelection at this AGM. As Jonathan Solesbury is to step down from the Board with effect from the end of this meeting, the resolution for his reelection will not be proposed. The polls in these resolutions will be held at the end of the meeting as before. Resolution number 2a, I propose that Jill Caseberry being a retiring director be and is hereby elected a director of the company. Resolution number 2b, I propose that Helen Pitcher being a retiring Director be and hereby elected a director of the company. Resolution number 2c, I propose that Jim Thompson being a retiring director be and is hereby elected a director of the company. Resolution number 2d, I propose that Stewart Gilliland should be reelected as a director of the company. Resolution 2e, I propose that Andrea Pozzi being a retiring director be and is hereby reelected a director of the company. Resolution number 2g, I propose that Jim Clerkin being a retiring director be and is hereby elected a director of the company. Resolution number 2h, I would now ask Emer to propose the next of these resolutions, which relates to my own reelection.

Thank you, Vincent. I propose that Vincent Crowley being a retiring director be and is hereby reelected a director of the company.

Resolution number 2i. Thank you, Emer. I now propose that Emer Finnan being a retiring director be and is hereby reelected a director of the company. The poll on all of the resolutions relating to the reelection of the directors will be held at the end of the meeting. Resolution number 3, remuneration of the auditors. Under resolution 3, I propose that the remuneration of our auditors, EY, be fixed by the directors in respect to the year ended 28 February 2021. The poll on this resolution will be held at the end of the meeting. Resolution number 4, consideration of the report of the Remuneration Committee. C&C is not required to submit our remuneration reports to a binding vote by shareholders. However, in line with the company's commitment to good corporate governance, we are seeking shareholder approval on an advisory rather than a binding basis. Accordingly, resolution 4 is to receive and consider the directors' remuneration report as set out in the annual report. In the absence of Helen Pitcher, I propose resolution 4 that the report of the Remuneration Committee on directors' remuneration be received and considered by the meeting. Again, the poll in this resolution will be held at the end of the meeting. Resolution number 5, authorizing the directors to allot the authorized share capital. The purpose of resolution 5 is to authorize the directors to issue the authorized of unissued shares of the company. I now propose the resolution. The full text of the resolution is set out as Item 5 in the notice of the meeting. Again, the poll on this resolution will be held at the end of the meeting. Resolution number 6, preemption rights. The purpose of resolution 6 is to renew until the next AGM the Director's power to allot shares for cash, otherwise than in accordance with statutory preemption rights, up to a limit of 5% of the nominal value of the issued share capital at the date of the notice. I now propose this resolution as a special resolution. The full text of the resolution is set out as Item 6 in the notice of the meeting. The poll on this resolution will be held at the end of the meeting. Resolution number 7, preemption rights in respect of an additional 5% of the company's issued share capital. The purpose of resolution 7 is to authorize the directors to allot further shares for cash, otherwise than in accordance with statutory preemption rights, for the purposes of an acquisition or specified capital investment up to a limit of an additional 5% of the nominal value of the issued share capital at the date of the notice. I now propose this resolution as a special resolution. The full text of the resolution is set out as Item 7 in the notice of the meeting. The poll on this resolution will be held at the end of the meeting. Resolution number 8, authorizing the purchase of own shares. Resolution 8 authorizes the company to make market purchases of its own shares, representing up to 10% of the aggregate nominal value of the issued share capital. I now propose this resolution as a special resolution. The full text of the resolution is set out as Item 8 in the notice of the meeting. The poll on this resolution will be held at the end of the meeting. Resolution number 9, authorizing the reissue of owned shares. Resolution 9 authorizes the company to reissue shares held as treasury shares within a range of prices. I now propose this resolution as a special resolution. The full text of the resolution is set out as Item 9 in the notice of the meeting. The poll on this resolution will be held at the end of the meeting. Resolution number 10, the approval of a scrip dividend scheme. The authority sought pursuant to resolution 10 will allow the directors the flexibility to continue to offer shareholders the option to elect to receive fully paid ordinary shares instead of the whole or any part of their cash dividend in the future. I now propose this resolution as an ordinary resolution. The full text of the resolution is set out as Item 10 in the notice of the meeting. The poll on this resolution will be held at the end of the meeting. Now let me turn to the voting procedures. Before I do, it is worth highlighting that the proxy votes cast in advance of the meeting are more than 90% in favor of each of the resolutions. Therefore, it is expected that each resolution will be passed. I now direct that a poll will be taken on each of the resolutions which has been put to the meeting. The procedure for conducting a poll will be as follows: votes may be given by the registered holders of ordinary shares present here in person or by proxy and entitled to vote. Every such holder has 1 vote for every ordinary share held. I will also vote on behalf of those holders who have sent a proxy instruction to the company, appointing the Chairman of the meeting to vote on their behalf. After the poll has been conducted, the votes cast will be verified under the scrutiny of Link by reference to the registered members and the list of authenticated proxies received by the company. Link will report the totals of the votes cast for and against the resolutions and the number of votes withheld. The poll will take some time to be conducted. Therefore, I am closing the meeting, following which, the results of the poll on all resolutions will be announced on the company's website. Ladies and gentlemen, subject to the poll results, that concludes the business of this meeting. As there is no other business, I shall now bring the formal business of the AGM to a close. I would like to thank you for joining us today. Stay safe, and the Board looks forward to meeting you at the AGM later in the year.

This concludes today's call. Thank you for your participation. You may now disconnect.