Analyst presentation H1 2015/16

Transcription

1 Analyst presentation H1 2015/16 Half year ended 30 September November 2015

2 Disclaimer DISCLAIMER THIS PRESENTATION may contain forward looking statements. These statements are based on current expectations, estimates and projections of Lucas Bols¹s management and information currently available to the company. Lucas Bols cautions that such statements contain elements of risk and uncertainties that are difficult to predict and that could cause actual performance and position to differ materially from these statements. Lucas Bols disclaims any obligation to update or revise any statements made in this presentation to reflect subsequent events or circumstances, except as required by law. Certain figures in this presentation, including financial data, have been rounded. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures which precede them. 2

3 1. Lucas Bols at a glance 2. Highlights H1 2015/16 3. Operational review 4. Financials H1 2015/16 5. Outlook

4 Lucas Bols at a glance Amsterdam 1575 In over 110 countries 77.7 margin Focus on cocktails and genever North America Emerging Markets 18.5% 12.9% 45.9% Western Europe ) 28% 22.7% Revenue m Operating profit m 24 brands 42 liqueur flavours Asia-Pacific >50% of revenue outside Western Europe FY 2014/15 Note 1: Excluding IPO costs 4

5 Strong offering of global brands and regional brands Global brands Revenue structure Regional brands Bols Liqueurs Range FY 2014/15 Liqueurs Regional brands 69.3% 30.7% Dutch Jenever portfolio Global brands White Spirits Italian Liqueurs Value brands 5

6 1. Lucas Bols at a glance 2. Highlights H1 2015/16 3. Operational review 4. Financials H1 2015/16 5. Outlook

7 Highlights H1 2015/16 Revenue Revenue of 39.4 million, down 2.9% organically, mainly following one-off stock reductions in Asia-Pacific. North America reports healthy 3.4% organic growth as a result of our strategy for growth. Gross Margin % Gross margin of 60.8%, at the same level as last year, at constant currency. Operating Profit Operating profit of 11.6 million, down 5.3% organically over last year. FOCF Free operating cash flow of 8.8 million ( 8.3 million in H1 2014/15). Net Profit Net profit of 7.7 million, versus 2.0 million in H1 2014/15. Net Debt Net debt significantly reduced to 53.5 million, with a net debt to EBITDA ratio of 2.4. EPS Earnings per share of Dividend The interim dividend in cash set at 0.31 per share. 7

8 Highlights regions in H1 2015/16 Western Europe Western Europe operated in line with H1 last year. Strong performance in the on-trade market in Scandinavia and Southern Europe. Challenging circumstances in the retail markets Belgium, Germany and the UK. Positive trend sales of global brands by Maxxium Netherlands. Asia-Pacific Decrease in revenues caused by one-off in-market stock reductions in Australia and South East Asia. In Australia adjusted supply chain structure, leads to reductions in warehouses by our local distributor. South East Asia, in anticipation of a change in distribution partner effective 1 January, The remainder of the Asia Pacific region performed in line with last year. North America In North America we see our market strategy for growth pay-off. Good performance of the US market, in accordance with our expectations, leading to healthy organic revenue growth. Growth in an increasing number of states and a growing customer base. Emerging Markets Emerging Markets showed a slight increase compared to last year. Revenues in Eastern Europe (including Russia) were in line with last year. In Russia we returned to growth in the market, due to continued A&P investments. Revenues in Africa were slightly down balanced by higher sales in Central and South America. 8

9 1. Lucas Bols at a glance 2. Highlights H1 2015/16 3. Operational review 4. Financials H1 2015/16 5. Outlook

10 Lucas Bols mission & strategic framework Mission Lucas Bols We aim to create great cocktail experiences around the world. Strategic framework Lucas Bols Build the brand equity Lead the development of the cocktail market Accelerate global brand growth Leverage operational excellence To strengthen and grow our global brands in the international cocktail market To maintain the competitiveness of our regional brands in regional and local markets 10

11 Lead the global Cocktail Market New product innovations Bols Bartending Academy Online Bartender Community Strong quality recognition Bols Around the World Bols brand ambassadors Leading the cocktail culture Bols Business Class Bols.com for inspiration The World s Oldest Distilled spirit Brand Trade shows Extensive cocktail database 11

12 Global Bols Bartending program Ensures Lucas Bols to be at the fore front of the cocktail culture and to be the #1 source of inspiration and education for the global bar industry 1 BOLS BARTENDING 2 BOLS BARTENDING SUPPORT BARTENDING ACADEMY BOLS AROUND THE WORLD BOLS BUSINESS CLASS SEMINARS TRAINER TRAINING ONTRADE ACTIVITIES TRADESHOW SUPPORT 3 BOLS AMSTERDAM EXPERIENCE BARTENDING ACADEMY HOUSE OF BOLS LUCAS BOLS DISTILLERY DAMRAK CANAL TOUR HISTORICAL BAR TOUR COCKTAIL BAR TOUR 12

13 Innovations are drivers for growth Product innovation Product development Product innovation is essential for spirits players to differentiate themselves and capture growth. Introducing new flavours and launching distinctive and appealing packaging are key. In the past months three new liqueur flavors have been introduced: Bols Date Bols Pineapple Chipotle Bols Blackberry (relaunch) Lucas Bols aims at introducing new products regularly. 13

14 US spirits industry 3-tier system National manufacturers or suppliers (Breweries, Wineries, Distilleries and Importers) Lucas Bols USA 24 people dedicated to sales and marketing State wholesalers Federal Excise Tax (Licensed importers, Distributors and Control Boards) MHW compliance and customer service 67 distributors nationwide Covering 33 open states and 17 control states State Excise Tax Local retailers (Licensed Outlets) (On Premises: Bars, Clubs, Restaurants (Off Premises: Liquor stores, Grocers) Approximately 50 thousand Lucas Bols customer base 80% on premise and 20% off premise State Sales Tax Consumers Consumers On-premise and retail activation and social media 14

15 Lucas Bols set up for success in the US Strong portfolio of liqueurs and spirits to leverage the growing cocktail trend Lucas Bols route to market in place Efficient supply chain / back office model Dedicated sales and marketing organization Established nationwide distributor partnerships Most advanced sales data insights worldwide; every sku to every account Account base of approximately 50 thousand nationwide and growing Bols liqueurs declining trend, reversed to growth Distributors 15

16 Lucas Bols US growth potential Strongly represented with Lucas Bols USA sales team in the largest states. Leading role with the Bols Liqueurs range within our distributor network; at the center of their spirits portfolio when selling the cocktail. Unique position with current Bols Liqueurs sales in the on premise (80%) versus the off premise (20%) where the industry standard is reverse. Growing number of contracts with national and regional on-premise chains. Known as the cocktail authority with the Bols around the World cocktail competition and the Bols Bartending Academy on tour; educating and inspiring distributors, bartenders and consumers. Dedicated brand ambassador team in place with Bols Genever within nationwide growing bartender community. Reaching and activating the consumer with the Galliano retro drinks strategy. Expanding distribution of Damrak Gin nationwide and building on the growing imported Gin trend. 16

17 1. Lucas Bols at a glance 2. Highlights H1 2015/16 3. Operational review 4. Financials H1 2015/16 5. Outlook

18 Corporate P&L H1 2015/16 Reported Organic REPORTED (in m) H1 2015/16 H1 2014/15 growth growth Revenue % -2.9% Cost of Sales (15.4) (15.6) GROSS PROFIT % -2.9% 60.8% 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT % -5.3% 29.4% 31.7% Highlights One-off reduction of in-market stocks in Australia and South East Asia: Impact on revenue of 0.9 million Impact on gross profit and operating profit of 0.7 million 18

19 Important aspects of Lucas Bols currency effects Revenue denominated in foreign currencies is 53.5% in H1 2015/16 Foreign exchange impact Rates Rates (in m) H1 2015/16 H1 2014/15 Delta % US dollar USD % Japense yen JPY % Australian dollar AUD % Russian rouble RUB % 19

20 Revenue development global and regional brands Revenue development at constant currencies (in m) 40.8 (0.9) -3.3% (0.2) (0.2) % Group revenue structure (H1 2015/16) 31.0% Regional brands Global brands 69.0% Revenue Reported Reported Organic (in m) H1 2015/16 growth % growth % H1 2014/15 Δ Global brands Δ Regional brands Foreign exchange effect H1 2015/16 Global Brands % -3.3% Regional Brands % -1.9% 61.8% 65.3% 50.9% 60,.8% Total % -2.9% Gross margin 20

21 Revenue development per geographical segment Revenue development at constant currencies (in m) Revenue structure (H1 2015/16) 40.8 (0.4) (1.1) Emerging Markets -2.3% (0.2) % -11.1% +3.4% +2.5% North America 19.2% 47.4% Western Europe Asia-Pacific 20.7% Revenue Reported Reported Organic (in m) H1 2015/16 growth % growth % Western Europe % -2.3% Asia Pacific % -11.1% H1 2014/15 Δ Western Europe Δ Asia- Pacific Δ North America Δ Emerging markets Foreign exchange effect H1 2015/16 North America % 3.4% Emerging Markets % 2.5% Total % -2.9% 21

22 Gross profit development per geographical segment Gross profit development at constant currencies (in m) 25.2 (0.5) -4.6% (0.7) 0.3 (0.5) % +2.7% + 8.8% 24.0 Gross margin development at constant currencies Total +0bps Western Europe -130 bps Asia Pacific +150 bps North America -40 bps Emerging Markets +410 bps H1 2014/15 Δ Western Europe Δ Asia- Pacific Δ North America Δ Emerging markets Foreign exchange effect H1 2015/ % 55.3% 71.8% 58.6% 67.2% 60.8% Gross margin 22

23 Operating profit development global and regional brands Operating profit development at constant currencies (in m) 12.9 (0.2) -1.6% (0.4) -6.9% (0.1) (0.6) -1.6% 11.6 Operating profit structure (H1 2015/16) Regional brands 30.6% Global brands 69.4% D&A expenses Reported Reported Organic (in m) H1 2015/16 growth % growth % Global Brands % -3.0% Regional Brands % 5.7% H1 2014/15 Δ Global brands Δ Regional brands Δ Unallocated Foreign exchange effect H1 2015/16 Unallocated % 1.6% 31.7% 44.0% 43.2% 29.4% Total % -0.4% Operating margin 23

24 We have maintained healthy margins % of organic revenue Gross Gross Operating Operating Delta H1 2014/15 - H1 2015/16 Profit Margin Profit Margin Company bps bps Global Brands bps bps Regional Brands bps bps Overall, gross margin stable at last years level and operating margin down 80 bps. Brands reported gross margin development D&A expenses were broadly stable at last year s level. Transfer of the blending and bottling of Bols Vodka to our production joint-venture Avandis. 24

25 Post IPO significantly lower finance costs REPORTED (in m) H1 2015/16 H1 2014/15 Revenue Cost of Sales (15.4) (15.6) GROSS PROFIT % 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT % 31.7% Share of profit of JV, net of tax EBIT % 31.8% Finance costs (1.3) (9.0) PROFIT BEFORE TAX Income tax expense (2.6) (2.0) PROFIT FOR THE PERIOD Finance costs (in m) H1 2015/16 H1 2014/15 Senior debt (& Mezzanine) Cum. preference shares Amortisation fees Total Finance ratio's (in m) H1 2015/16 H1 2014/15 FY 2014/15 Debt Cash (3.8) (2.9) 0.6 Net Debt Leverage ratio

26 Income Tax Expense REPORTED (in m) H1 2015/16 H1 2014/15 Revenue Cost of Sales (15.4) (15.6) GROSS PROFIT % 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT % 31.7% Share of profit of JV, net of tax EBIT % 31.8% Finance costs (1.3) (9.0) PROFIT BEFORE TAX Tax (in m) H1 2015/16 H1 2014/15 Profit before tax Cum. Pref. Dividend Result/ Dividend subsidiaries Tax Expense (2.6) (2.0) Tax rate 25.6% 50.1% Income tax expense (2.6) (2.0) PROFIT FOR THE PERIOD

27 Net profit REPORTED (in m) H1 2015/16 H1 2014/15 Revenue Cost of Sales (15.4) (15.6) GROSS PROFIT % 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT % 31.7% Share of profit of JV, net of tax EBIT % 31.8% Highlights Earnings per share of 0.61 Interim cash dividend of 0.31 per share Number of shares outstanding are 12,477,298 Finance costs (1.3) (9.0) PROFIT BEFORE TAX Income tax expense (2.6) (2.0) PROFIT FOR THE PERIOD

28 Balance sheet Assets (in m) H1 2015/16 H1 2014/15 FY 2014/15 Intangible assets 214,9 214,9 214,9 Investments in joint-ventures 5,1 5,7 5,1 Other 2,0 2,2 2,0 Non-current assets 222,0 222,8 222,1 Cash and cash equivalents 3,8 2,9 0,6 Net working capital 16,9 17,1 14,5 Highlights Net working capital in line with H1 2014/15 Traditional higher working capital in first half year Total 242,7 242,9 237,2 Funded by: Liabilities & equity (in m) H1 2015/16 H1 2014/15 FY 2014/15 Loans and borrowings 52,7 74,8 52,7 Other non-current fin. Liabilities 0,6 69,7 0,9 Deferred tax liabilities 22,6 21,4 20,0 Other 0,7 0,5 0,7 Non-current liabilities 76,6 166,4 74,4 Deferred Tax (in m) H1 2015/16 H1 2014/15 FY 2014/15 Deferred tax assets (8.1) (7.2) (9.3) Deferred tax liabilities Total Loans and borrowings 4,0 42,5 8,4 Derivative financial instruments 0,5 1,4 1,2 Current Liabilities 4,5 43,9 9,6 Equity 161,6 32,6 153,2 Total 242,7 242,9 237,2 28

29 Continued high cash generation 11.6 (0.1) 0.2 (0.2) (0.0) (2.7) Free Operating Cash Flow H1 2015/16 Delta vs. (in m) H1 2014/15 Operating profit 11.6 (1.3) Taxes (0.1) (0.1) Depreciation & amortisation 0.2 (0.0) Capital expenditure (0.2) (0.0) Other items (0.0) 0.4 Δ Working capital (2.7) 1.5 Free operating cash flow Operating profit (Taxes) D&A (Capex) (Other items) Δ NWC H1 2015/16 FOCF H1 2014/15 FOCF 29

30 1. Lucas Bols at a glance 2. Highlights H1 2015/16 3. Mission & strategy 4. Financials H1 2015/16 5. Outlook

31 Outlook Continued long-term growth of the global brands and stabilisation of the regional brands. Further development in our global brands, due to an on going improvement in the global economies, contributing to a growing cocktail culture. Continued focus on accelerated growth of our brands in the US, with our organisation Lucas Bols USA. Less impact from currency fluctuations expected on operating profit in the second half, due to hedges in place. Lesser effect of one-off stock reductions in Asia Pacific. Positive view about the future developments of our brands, although a number of markets will remain challenging. 31

32 Q&A