Stock Spirits 2014 Results

Transcription

1 Stock Spirits 2014 Results 12 March 2015

2 Disclaimer This presentation has been prepared by Stock Spirits Group PLC ( Stock Spirits Group or the Group ). By attending the meeting where the presentation is made, or by reading the presentation slides, you agree to be bound by the following conditions. This presentation contains forward looking statements, which are based on the Stock Spirits Group Board's current expectations and assumptions and may involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statement typically contain words such as [ anticipate, assume, believe, expect, plan, intend ] and words of similar substance. The forward looking statements contained in this presentation are based on past trends or activities and should not be taken as a representation that such trends or activities will continue in the future. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to: conditions in the market, market position of the companies comprising the Stock Spirits Group, earnings, financial position, cash flows, return on capital and operating margins, anticipated investments and economic conditions; the Group's ability to obtain capital/additional finance; a reduction in demand by customers; an increase in competition; an unexpected decline in revenue or profitability; legislative, fiscal and regulatory developments, including, but not limited to, changes in environmental and health and safety regulations; exchange rate fluctuations; retention of senior management; the maintenance of labour relations; fluctuations in the cost of raw material and other input costs; and operating and financial restrictions as a result of financing arrangements. Accordingly, readers should not place undue reliance on forward looking statements due to the inherent uncertainty herein. No statement in this presentation is intended to constitute a profit forecast, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for the Group. Each forward looking statement relates only as of the date of the particular statement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange or otherwise by law, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The information contained in this presentation has not been independently verified and no reliance should be placed on such information. No representation, warranty or undertaking, expressed or implied, is made by the Group or its advisors, representatives, affiliates, offices, employees or agents as to, and no reliance should be placed on, the Company nor any of its advisors, representatives, affiliates, offices employees of agents shall have any liability whatsoever (in negligence or otherwise) for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of this presentation or its contents or otherwise arising in connection with the presentation. The information in this presentation does not constitute an offer to sell or an invitation to buy shares in Stock Spirits Group PLC or an invitation or inducement to engage in any other investment activity. 2

3 Agenda SECTION PRESENTER Welcome Jack Keenan (Chairman) Business Review Chris Heath (CEO) Financial Results Lesley Jackson (CFO) Concluding Remarks Chris Heath (CEO) Q&A 3

4 Welcome Jack Keenan Chairman 4

5 Introduction 2014 has been a particularly challenging year We are making very good progress on strengthening our brand equity In spite of profit result at the lower end of profit guidance, we remain confident in underlying performance and cash generation Board pleased to propose a final dividend of per share 5

6 Business Review Chris Heath Chief Executive Officer

7 Overview of the year Challenging year in Poland following 15% excise duty increase Duty increase passed on to consumers who have accepted the shelf price increases, consumer demand remains resilient Resultant destocking has had a profound effect on the industry supply chain, and combined with aggressive competitor and customer behavior has impacted our financial performance in 2014, particularly in H2 Net sales revenue of 292.7m (-14.1% vs. FY13) and adjusted EBITDA (1) of 66.4m (-20.7% vs. FY13) but value focus delivered improved gross margins of 52.6% and flat EBITDA margins Market leadership maintained in our two key markets of Poland and the Czech Republic despite tough trading conditions (2) Results in our other markets have been in line or ahead of expectations 7

8 Overview of the year (cont d) Continued strength in NPD and premiumisation of our product portfolio with 6 millionaire brands (1) Czysta de Luxe is now the #7 most popular vodka brand globally (2) Excellent results from our new distribution agreements in the key Polish and Czech markets, outgrowing the market in both volume and value for the brands whilst strengthening our portfolio, new contracts in Croatia and Bosnia (3) Strong balance sheet with closing net debt to adjusted EBITDA of 1.24x (4) We enter 2015 with a strong pipeline of new products and remain confident that our strategy and operational experience will deliver results when market conditions normalise 8

9 Poland We are the market leader in Poland Total spirits 2014 market Poland is the 3rd largest vodka market in the world (4) Split by category 2014 (1) (%) Vodka dominates with 87.2% of the spirits market (2) Off-trade structure (2) (%) 16.2% 16.8% 16.5% 8.7% 5.6% 8.6% 8.9% 5.4% 5.2% 69.4% 69.2% 69.4% (4) Traditional Trade Hypermarkets Supermarkets Discounters Vodka market volume and value (3) % % Clear Vodka 19.4% Vodka-based Liqueurs 6.2% Whiskey 6.6% Others +3.1% (2) Continued importance of the Traditional trade channel to access the end consumer Polish economy and consumer confidence continue to improve GDP growth +3.3% in 2014 (1.7% in 2013) Consumer confidence at highest level since July bn inward investment from EU cohesion funds ( ) Polish consumers have been resilient, despite the increases in shelf prices following duty increase Small volume decline but value increase (2) Volume (m litre) Value ( bn) 9

10 Poland Market trends remain volatile Total Polish Vodka Volume Evolution (1) -2.2% -4.9% -3.6% -3.5% -5.1% -4.3% -6.4% Q1 '14 vs Q1 '13 Q2 '14 vs Q2 '13 H1 '14 VS H1 '13 Q3 '14 vs Q3 '13 Q4 '14 vs Q4 '13 H2 '14 VS H2 '13 FY '14 VS FY '13 Total Polish Vodka Value Evolution (1) 5.9% 5.3% 2.7% 1.9% 3.5% 3.1% -0.3% Q1 14 vs Q1 13 Q2 14 vs Q2 13 H1 14 vs H1 13 Q3 14 vs Q3 13 Q4 14 vs Q4 13 H2 14 vs H2 13 FY 14 vs FY 13 10

11 Poland Market leader, managing for value not volume Stock Volume Share of Polish Vodka (1) 38.0% 37.9% 37.9% 37.3% 22.9% 17.1% 28.2% 26.2% 24.5% 22.0% 21.8% 21.2% 15.7% 14.8% 14.4% 20.2% Stock Competitor 1 Competitor 2 Others MAT Q MAT H MAT Q MAT Q Stock Value Share of Polish Vodka (1) 38.4% 38.5% 38.6% 38.1% 27.4% 25.5% 23.0% 23.0% 23.5% 22.8% 21.9% 21.1% 15.5% 15.2% 14.0% 13.5% Stock Competitor 1 Competitor 2 Others MAT Q MAT H MAT Q MAT Q

12 Poland Supply Chain Disruption A significant increase in excise duty can disrupt a market Fall in consumption as consumers get used to the new price points Disruption in the supply chain Market behaviour in this environment Increase in purchases and inventory levels ahead of the duty increase (Q4 2013) Increased market competition and promotional activity to reduce excess inventories A gradual return to market norms once demand and supply rebalance What we saw in Poland in 2014 H1 went as expected, shelf prices largely reflected increased duty Consumer demand down but rate of decline less than anticipated, too early to say when normality would return Q3 saw a continuation of the negative volume trends but no reduction in aggression from competitors and customers Q4 saw continued exceptionally competitive and hostile trading environment, further aggravated by the sudden deterioration in consumer trends in October and November Unable to fully implement planned price rises Chose to walk away from uneconomic sales particularly in December 12

13 Poland Performance impacted by supply chain disruption Net sales revenue ( m) -26.2% -8.2% % FY2014 Polish net sales revenue was down 18.5% to 168.0m, including the loss of sales due to the FY 13 pre-duty buy-in FY2014 Polish EBITDA (1) declined by 19.0% or 12m to 53.1m, including the double effect of the 5m pre-duty buy-in from FY13 EBITDA margin maintained at 31.7% H1 '13 H1 '14 H2 '13 H2 '14 FY13 FY14 Polish market has not yet fully recovered from the 2014 disruption, some customers trying to resist the return to normal trading conditions in 2015 EBITDA (1) ( m) -1.3% % % % 31.0% 34.0% 32.4% 31.8% 31.7% H1 '13 H1 '14 H2 '13 H2 '14 FY13 FY14 x.x% EBITDA margin (%) 13

14 Czech Republic Market update Total spirits 2014 market Split by category (1) (%) 28.9% Rum 21.8% Vodka 15.3% Herbal Bitters 5.1% Whiskey 28.9% Others Comments Growth in value of spirits market despite small volume decline Growth in the large rum and vodka categories Continued high proportion of sales on promotion (1) Growth of private label and economy Market volume and value (1) % +2.4% Volume (m litre) Value ( bn) 14

15 Czech Republic (cont d) Company performance Market shares (1) (%) 58.1% 56.1% 49.9% 49.5% 34.5% 34.3% 23.3% 22.6% Rum Herbal Bitters Vodka Total Key financials Net sales revenue ( m) EBITDA (2) ( m) -5.9% 62.9 FX FY13 FY14-8.8% FX % 27.4% Comments Stock remains the market leader, maintaining stable overall volume share in a slightly declining market (1) Market leadership was maintained in all of our core categories (1) Maintained growth of Fernet market share, driven by successful new media campaign (1) Bozkov range lost volume and market share due to attack from private label and aggressively priced economy brands (1) In FY14, reported net sales revenue was down 5.9% to 59.5m, with negative FX accounting for 3.4m of revenue shortfall, and flat sales growth at constant FX rates EBITDA (2) was down 8.8% or 1.5m to 16.3m, with 0.9m of the decline due to unfavourable FX, 3% EBITDA decline at constant FX rates FY13 x.x% EBITDA margin (%) FY14 15

16 Italy Market update Total spirits 2014 market Split by category (1) (%) 10.3% Bitters 8.9% Lemon Liqueurs 6.2% Brandy Comments Increase in value of spirits market despite volume decline driven by excise duty and VAT increases (1) Further excise duty increase in Jan % Vodka 68.4% Others Continued strength of vodka category Market volume and value (1) % % Volume (m litre) Value ( bn) 16

17 Italy (cont d) Company performance Market share (1) (%) 47.7% 47.9% Vodka-based Liqueurs Key financials 23.7% 24.6% 18.7% 16.7% 16.8% 14.9% Net sales revenue ( m) 5.3% Vodka Brandy Limoncello Total % % Comments Stock s overall volume share remained stable in a declining market. In our core categories, volume share growth in the vodka and vodka based liqueurs categories was offset by share declines in brandy and lemon liqueurs (1) Stock responded to the Italian excise duty increases by raising prices and NPD with new flavoured Keglevich launched Net sales revenue reduced by 4.2% to 35.2m EBITDA (2) ( m) FY13 FY14 EBITDA (2) increased 10.7% to 8.9m due to elimination of non recurring costs +10.7% % 22.0% FY13 x.x% EBITDA margin (%) FY14 17

18 Other segment Slovakia, Croatia, Bosnia, Baltic Distillery & Exports Key financials Comments Net sales revenue ( m) Integration of Imperator in Slovakia % Portfolio streamlined in line with strategy with discontinuation of low / loss making products 30.0 Investment in core brands Active launch of NPD FY13 FY14 Production transferred to Czech and site in the process of being disposed of EBITDA (1) ( m) +15.8% 2.9 Distribution contract with Beam Suntory signed for Croatia and Bosnia % 9.6% In FY14, reported net sales revenue down 12.9% to 30.0m and EBITDA (1) up 15.8% to 2.9m Improved margin by 240bps FY13 x.x% EBITDA margin (%) FY14 18

19 Innovation Proven track record of successful NPD 19 new products launched in 2014 ZG Black Cherry Keglevich Raspberry & Coconut Golden Ice Pear Lubelska Peach Lubelska Orange Stock Prestige 130 Hammerhead 25 19

20 Distribution agreements Reinforcing our premium credentials Beam share of Polish whiskey market (1) Comments +75.9% 5.1% +62.5% 5.2% Delighted with performance of new distribution agreements in % Volume (%) 3.2% Value (%) Provides an excellent platform to develop more of our own premium brands beside the Beam and Diageo products Diageo share of Czech rum market (2) New contracts agreed with Beam during 2014 in Croatia and Bosnia 2.0% +17.8% 2.3% 4.1% +17.1% 4.8% International relationship now in 4 of the 6 markets where Stock has its own distribution Volume (%) Value (%) 20

21 Financial Results Lesley Jackson Chief Financial Officer

22 Consolidated statutory P&L Consolidated statutory P&L (Dec YE, k) % Change Revenue 340, , % Cost of goods sold (166,962) (138,752) Gross profit 173, , % Gross profit margin % 51.0% 52.6% Selling expenses (69,673) (67,206) Other operating expenses (41,136) (31,963) Operating profit before exceptional items 62,767 54, % Exceptional items (15,088) (1,111) Operating profit 47,679 53,648 Net finance costs (56,359) (4,610) (Loss) / profit before tax (8,680) 49,038 Income tax credit / (expense) 17,573 (13,201) Profit for the year 8,893 35,837 Earnings per share (basic and diluted) Key highlights Revenue down 14%, revenue per case up by 4% COGS broadly unchanged, leading to increase in gross margin of 160bps Non recurring expenses associated with the IPO in 2013 have ceased leading to reduction in selling and other operating expenses and exceptional items Change in capital structure and reduction in bank margins have led to reduction in finance costs IPO corporate restructuring resulted in a material deferred tax credit in 2013, which has not recurred in 2014 increase in 2014 tax charge Profit for the year and EPS show growth versus

23 Volume, Net sales revenue & EBITDA overview Volume (m 9L cases) and Net sales revenue ( m) Adjusted EBITDA (1) Three Year Trend ( m) % change y-o-y +11.4% +16.4% -17.2% -14.1% FY12 FY13 FY14 Clear Vodka Other Net Sales Revenue ( m) FY12 FY13 FY14 23

24 Group performance in 2H FY 2014 Net sales revenue 2H14 vs. 2H13 ( m) -17.3% Comments Pre duty buy in in Q resulted in sales revenue being brought forwards in 2013 and a reduction in 2014 comparative Decline in volumes in Poland and Italy 2H13 Adjusted EBITDA (1) 2H14 vs. 2H % ( m) H Estimated impact of pre duty buy in during Q at 5m of EBITDA 0.9m of negative FX impacting 2014 results 24% 24% H2 EBITDA margins held at last year levels 2H13 2H14 xx% EBITDA Margin % 24

25 FY 2014 Operating Profit to EBITDA Reconciliation ( m) Reported operating profit D&A Reported EBITDA Exceptional items Non-recurring expenses Adjusted EBITDA Exceptional items and non recurring expenses (shown within other operating expenses) relate to Post IPO restructuring Costs associated with pre IPO share based payment scheme Losses on disposal of fixed assets As the IPO related activity is now complete, we do not anticipate any further exceptional costs in this respect 25

26 Net working capital Net working capital ( m) Comments FY13 closing working capital impacted by one off receipt of VAT pre year-end, arising from post IPO corporate restructuring. Corresponding payment made in January Timing of sales in Q has resulted in higher closing working capital (40.3) No utilisation of debt factoring at the year end (30.2) 1H13 2H13 1H14 2H14 Net Working Capital Polish VAT Payable 26

27 Net debt (1) Net debt bridge FY13-14 ( m) x 1.24x (46.3) (40.3) (40.3) (13.4) (8.3) (10.5) (2.5) (82.4) 2.1 (82.4) Polish VAT Adjusted net debt Dec-13 Net cash inflow from op. activities excl. Polish VAT payment Polish VAT Income tax paid Net capital exp. & sale proceeds for PPE Net interest paid Interim Dividend Exchange rate Net debt Dec-14 y.yyx Net debt to EBITDA ratio One off timing impact of Polish VAT relating to post IPO restructuring, paid in January 2014 Pro forma opening net debt (86.6m) leverage 1.04x In spite of profit performance 2014 net debt largely unchanged from 2013 net debt, adjusted for VAT timing Closing net leverage (2) of 1.24x The first dividend paid in 2H FY14 in line with the dividend policy announced at the time of IPO 27

28 Free cash flow Adjusted free cash flow (1) FY14 vs. FY13 ( m) 83.3 Comments Timing of sales in Q has resulted in higher closing working capital, thereby impacting adjusted free cash flow Higher cash flow in early % 29.3 Significant headroom in current facilities to support future organic and inorganic growth opportunities 44.2% FY13 FY14 x.x% % Adjusted cash flow conversion 28

29 Capital expenditure and D&A Capital expenditure and D&A FY12-14 ( m) Comments Underlying capital spend in FY14 in line with earlier years Project Polar now completed Future capital expenditure will revert to be more in line with recent historic levels 2.6% 3.3% 2.6% 2.7% 2.8% 3.8% D&A has increased to reflect the impact of Project Polar (amortization over 5 years) FY12 FY13 FY14 Capital expenditure D&A Project Polar x.x% % of net sales revenue (excl. Polar) Note: FY12 excludes acquisition of Baltic Distillery assets 29

30 Net finance costs Net finance costs FY14 vs. FY13 ( m) Interest payable on bank loans Bank commissions and guarantees Interest rate swap instruments (0.7) (0.5) Other net interest (income) / expense (0.9) 1.1 Subtotal Foreign currency exchange loss / (gain) 12.6 (6.5) Shareholder debt interest Total Comments FY13 finance costs significantly impacted by pre IPO capital structure Unpaid shareholder debt converted to equity at IPO in FY13 Finance expenses now predominantly relate to 3rd party bank facilities Interest rate swap instruments have now expired Significant reduction in cost of bank loan interest driven by reductions in market central bank lending rates and renegotiated margins on facilities FX gain has arisen on translation of intercompany loans Favourable impact on EPS 30

31 Taxes P&L tax (credit) / charge ( m) Current tax expense Prior year tax expense Deferred tax credit (27.0) (0.2) Other Total tax (credit) / charge (17.6) 13.2 Comments Current tax expense no longer impacted by pre IPO capital structure, but is impacted by a number of disallowed expenses Prior year tax expense relates to provision for ongoing tax investigations Significant deferred tax credit in 2013 created as a result of post IPO corporate restructuring Corporate restructuring undertaken in an effective and tax efficient manner Cash tax payment circa 19.8%, lower than the weighted average blended tax charge of 20.2% 31

32 Impact of FX movements Net sales revenue bridge FY13-14 ( m) Net sales revenue FY13 Adjusted EBITDA (1) bridge FY13-14 ( m) Operating activities Impact of FX Net sales revenue FY Comments Key currency exposures relate to the Polish Zloty and the Czech Koruna Key impact arose from the devaluation of the Czech Koruna Overall impact upon net sales revenue and adjusted EBITDA (1) have not been material on the Group results during 2014, although a more significant impact upon the Czech results Removal of the fixed rate mechanism of the CHF against the Euro in January 2015 has resulted in some currency volatility and devaluation of the Polish Zloty and Czech Koruna. This represents a risk to the full year result Adjusted EBITDA FY13 Operating activities Impact of FX Adjusted EBITDA FY14 32

33 Concluding Remarks Chris Heath Chief Executive Officer

34 Concluding remarks 2014 was a very challenging year in Poland Poland remains an attractive market, with strong fundamentals Sticking to our strategy Other markets performing as expected Continued focus on innovation, NPD and M&A opportunities Trading conditions in Poland to remain difficult in early 2015, but more normal trading expected to emerge during the course of

35 Q&A

36 Appendix

37 Our mission statement To create the leading spirits business in CEE Bringing global operational excellence to the region

38 Overview of Stock Spirits today Pre-eminent spirits platform in key CEE countries Poland (1) Stocks Spirits presence Italy (3) Spirits No.1 Clear vodka No.1 Vodka-based liqueurs No.1 Czech Republic (2) Spirits No.1 Bitters No.1 Rum No.1 Total vodka No.1 Commercial offices Service centres Head office London Zug Milan Main production facilities and ethanol distillery (Rostok) Countries with own sales and marketing operations 923 full time employees Warsaw Lublin Pilsen Bratislava Zagreb Sarajevo Vodka-based liqueurs (9) No.1 Clear vodka No.2 Limoncello No.1 Brandy No.2 Other Slovakia (4) Spirits importer No.1 Fruit distillates No.2 Bitters No.1 International Centralised international team selling to 40+ countries Brandy (Bosnia & Herzegovina) (5) No.1 Imported Brandy (Croatia) (6) No.1 Net sales revenue by geography (FY14) Italy 12% Czech Republic 20% Other 10% Poland 58% Key financial highlights Net sales revenue: 292.7m in FY14, down 14.1% vs. FY13 Adjusted EBITDA (7) : 66.4m in FY14, down 20.7% vs. FY13 Strong cash generation with adjusted free cash flow (8) as % of adjusted EBITDA of 44.2% in FY14 38

39 Belarus Bulgaria Estonia Hungary Latvia Lithuania Macedonia Moldova Romania Serbia Ukraine EU15 Attractive Markets Scope for significant growth via targeted acquisition Ukraine (2) Population: 44.3m Nominal GDP/Capita: $4,112 Real GDP GAGR 13-18: 2.8% Spirits Volume (2013): 45.9m 9L cases Belarus (2,3) Population: 9.6m Nominal GDP/Capita: $7,585 Real GDP GAGR 13-18: 2.6% Spirits Volume (2013): 12.6m 9L cases Romania (2) Population: 21.7m Nominal GDP/Capita: $9,476 Real GDP GAGR 13-18: 4.2% Spirits Volume (2013): 12.6m 9L cases Bulgaria (2) Population: 6.9m Nominal GDP/Capita: $7,814 Real GDP GAGR 13-18: 2.9% Spirits Volume (2013): 8.6m 9L cases Hungary (2) Population: 9.9m Nominal GDP/Capita: $14,530 Real GDP GAGR 13-18: 2.6% Spirits Volume (2012): 6.3m 9L cases Target new territories with a spirits market volume (1) of c. 103m 9 litre cases in 2013 Current presence Possible new territories Hungary Estonia Latvia Lithuania Real GDP Growth (3) Serbia Belarus Ukraine Romania Bulgaria Macedonia Moldova 2.6% 2.9% 3.3% 2.6% 4.6% 3.5% 3.6% 3.6% 4.2% 3.2% 2.8% 1.5% Lithuania (2) Population: 2.9m Nominal GDP/Capita: $17,518 Real GDP GAGR 13-18: 3.5% Spirits Volume (2013): 3.8m 9L cases Latvia (2) Population: 2.2m Nominal GDP/Capita: $16,697 Real GDP GAGR 13-18: 4.6% Spirits Volume (2013): 2.0m 9L cases Estonia (2) Population: 1.3m Nominal GDP/Capita: $20,206 Real GDP GAGR 13-18: 3.3% Spirits Volume (2013): 2.0m 9L cases Serbia (2) Population: 7.2m Nominal GDP/Capita: $6,721 Real GDP GAGR 13-18: 3.2% Spirits Volume (2013): 5.3m 9L cases Macedonia (2) Population: 2.1m Nominal GDP/Capita: $5,327 Real GDP GAGR 13-18: 3.6% Spirits Volume (2013): 0.4m 9L cases Moldova (2) Population: 3.6m Nominal GDP/Capita: $2,299 Real GDP GAGR 13-18: 3.6% Spirits Volume (2013): 3.0m 9L cases Large total spirits market, considered to be underdeveloped Key acquisition targets identified in a number of markets and synergies evaluated Believed to be limited local or international competition for assets 39

40 Key contacts Lesley Jackson (CFO) Tel: Mob: Solar House, Mercury Park, Wooburn Green, Buckinghamshire, HP10 0HH Andrew Mills (IR Director) Tel: Mob: Solar House, Mercury Park, Wooburn Green, Buckinghamshire, HP10 0HH 40

41 Sources and Footnotes Page Sources Notes 7 Nielsen, IWSR 2013, company information (1) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition (2) Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT Dec Czech Republic, total off trade, total spirits, volume and value MAT Dec Nielsen, IWSR 2013, company information (1) Volume sales FY 2014 (2) Global vodka brand rankings by volume (3) Poland, total off trade, total whiskey, volume and value MAT Dec Czech Republic, total off trade, total rum and domestic rum, volume and value MAT Dec 2014 (4) Please refer to note 7 in the 2014 Annual Report and Accounts for a detailed definition 9 Nielsen, IWSR 2013 (1) Poland, Total off trade, total spirits volume MAT Dec 2014 (2) Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT Dec 2014 with a coverage factor of 1.18 applied to the market using comparisons to IWSR shipments data to reflect true scale of the traditional trade (Management believes it is under reported in Nielsen survey). (3) Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT Dec 2014 (4) Global vodka rankings by market by volume and retail value 10 Nielsen (1) Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT Dec Nielsen (1) Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT Dec Company information (1) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 14 Nielsen (1) Czech Republic, total off trade, total spirits, volume and value MAT Dec Nielsen, Company information (1) Czech Republic, total off trade, total spirits, volume and value MAT Dec 2014 (2) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 16 IRI (1) Italy, total off trade (defined as modern trade including discounters) total spirits MAT Dec IRI, Company information (1) Italy, total off trade (defined as modern trade including discounters) total spirits MAT Dec 2014 (2) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 18 Company information (1) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 41

42 Sources and Footnotes (cont d) Page Sources Notes 20 Nielsen (1) Poland, total off trade, total whisky volume and value MAT Dec 2014 (2) Czech Republic, total off trade, total rum and domestic rum volume and value MAT Dec Company information (1) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 24 Company information (1) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 27 (1) Net debt is defined as bank borrowings plus finance leases less cash and cash equivalents (2) Net leverage is defined as net debt divided by adjusted EBITDA 28 Company information (1) Please refer to note 7 in the 2014 Annual Report and Accounts for a detailed definition 32 Company information (1) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition 38 Nielsen, IRI, IWSR 2013, Company information 39 IWSR 2013, CIA World Factbook 2014 (1) Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT Dec 2014 (2) Czech Republic, total off trade, total spirits, volume and value MAT Dec 2014 (3) Italy, total off trade (defined as modern trade including discounters) total spirits MAT Dec 2014 (4) Slovakia, total spirits volumes IWSR Slovakia, total off trade, total bitters and total fruit distillates volumes MAT Dec 2014 (5) Bosnia & Herzegovina, total brandy volumes full year 2013 (6) Croatia, total brandy volumes full year 2013 (7) Please refer to note 6 in the 2014 Annual Report and Accounts for a detailed definition (8) Please refer to note 7 in the 2014 Annual Report and Accounts for a detailed definition (1) IWSR 2013 full year volumes total spirits by market (2) Population (3) Belarus GDP growth only for available. 42