Paris, 20 September
2017
MBWS H1 2017
Results
-
Net sales growth of +3.9% vs H1
2016
-
EBITDA of - €1.9m due to
A&P investment increase of €3m and to the impact of new
routes-to-market in Poland and the United States
-
Net income of €2.2m in H1
2017
-
€6.8m operating cash flow
improvement in H1 2017
Marie Brizard Wine and Spirits
(Euronext: MBWS), today announced its consolidated results for the
first half of the year, to 30 June 2017.* The accounts were
approved by the company's Board of Directors on 19 September
2017. The audit of the consolidated accounts at 30 June 2017
has been carried out and the auditor's report is being
finalized.
As reported on 27 July 2017,
consolidated net sales grew +3.9% to €212.5m in the first half of
the year. Consolidated EBITDA totalled -€1.9m in H1 2017, compared
to €0.4m** in H1 2016. Consolidated net income in H1 2017 was
€2.2m, versus -€13.6m in the first half of last year.
Jean-Noël Reynaud, CEO of MBWS,
commented: "As anticipated, the EBITDA results for the first half
of 2017 were negatively impacted by the reconfiguration of our
routes-to market in Poland and the United States at year-end
2016. Additionally, our businesses have continued to face a
number of ongoing challenges, such as significant pricing pressure
in Poland, evolving dynamics in the vodka market in the United
States, and the lackluster growth of spirits in France."
Mr. Reynaud continued, "Despite
these short-term headwinds, we have continued to invest behind our
brands to position them for growth, with advertising and promotion
increasing by three million euros in the first half of 2017 to
reach 9.4% of Branded Business sales, in keeping with our growth
strategy. These investments, in addition to the market
factors mentioned, have affected our short-term profitability,
particularly in the first quarter of the year. Nevertheless,
the market share gains made by William Peel, Sobieski, flavored
Krupnik, and Fruits and Wine in their respective markets continue
to encourage us in the pursuit of our growth strategy. We are
also satisfied with the dynamic growth of Marie Brizard and Cognac
Gautier that we are seeing across our geographies.
"We remain confident in the
ability of our business model -- anchored in the growth of the
mainstream segment of the wine and spirits markets - to drive
long-term growth and value creation via the execution of MBWS'
differentiated approach to the wine and spirits categories.
Additionally, I would like to underscore the improvements we have
made in our cash flow, Working Capital 1 improving by €33m in the
first half of the year, and operating cash flow increasing by €6.8m
in the same period," concluded Mr. Reynaud.
* All percentage
growth rates in this document are expressed in organic terms and
exclude foreign currency impact, unless stated
otherwise.
** EBITDA restated from €0.5m
H1 2017 Condensed
Income Statement
In €m, except EPS |
H1 2016 |
|
H1 2017 |
|
|
|
|
|
|
Net
Sales (excluding excise tax) |
202.3* |
|
212.5 |
|
Gross
profit |
69.7* |
|
72.5 |
|
Gross
margin |
34.5%* |
|
34.1% |
|
EBITDA |
0.4* |
|
-1.9 |
|
Current operating profit |
-1.7 |
|
-6.1 |
|
Attributable net income |
-13.5 |
|
2.2 |
|
Earnings per share |
- 0.50 |
|
0.08 |
|
* H1 2016 net
sales has been restated to reflect the cancellation of distribution
contracts of Mateus and Ferreira in WEMEA, the reclassification of
the Pulco contract in Spain to the Private Label category, and the
sale of Augustowianka in Poland.
Net sales, excluding excise tax,
totalled €212.5m in the first semester of the year, an increase of
3.9% (on a restated basis) compared to H1 2016.
Gross profit in H1 2017 was
€72.5m. Gross margin for the semester was 34.1%, an erosion
of 0.4 percentage points compared to H1 2016, attributable to Other
Businesses. The narrowing of the consolidated gross margin is
due to the greater weight of Other Businesses in the consolidated
net sales mix in H1 2017 (42.5%) as compared to the previous year
(39.6%).
Total EBITDA for the period was
-€1.9m, a decrease from €0.4m reported for the first half of
2016. This decrease is due to the €3m increase in advertising
and promotion investment and to a cycling effect related to
headcount growth at the corporate level, as new hires largely took
place in H2 2016.
Attributable net income increased to €2.2m in H1
2017, from -€13.5m a year ago. The net income increase is due
most significantly to the sale of the historical headquarters of
Marie Brizard in Fondaudège, Bordeaux, and lower net financial
expense, a result of having reimbursed the entirety of the frozen
debt in 2016.
H1 2017 EBITDA by
Cluster
|
H1 2016 Restated |
Organic Growth |
Currency impact |
H1 2017 |
Organic growth (excl. Currency impact) |
Organic growth (incl. Currency impact) |
Branded Business |
|
|
|
|
|
|
Western Europe, Middle East & Africa |
3.6 |
-0.6 |
0.0 |
3.0 |
-16.5% |
-16.5% |
Central and Eastern Europe |
2.3 |
-0.1 |
0.0 |
2.2 |
-3.6% |
-3.8% |
Americas |
0.8 |
0.3 |
0.0 |
1.1 |
31.2% |
28.6% |
Asia Pacific |
-0.3 |
-0.4 |
0.0 |
-0.7 |
-117.6% |
-117.6% |
Sub-Total Branded Business |
6.4 |
-0.8 |
0.0 |
5.6 |
-12.4% |
-12.8% |
Corporate expenses |
-5.5 |
-0.6 |
0.0 |
-6.1 |
-10.3% |
-10.3% |
Total Branded Business |
0.8 |
-1.4 |
0.0 |
-0.6 |
NM |
NM |
Other Businesses |
-0.4 |
-0.9 |
0.0 |
-1.3 |
-223.9% |
-234.4% |
Disposed Assets |
-0.1 |
0.0 |
0.0 |
-0.1 |
35.4% |
33.9% |
TOTAL MBWS |
0.4 |
-2.2 |
-0.1 |
-1.9 |
NM |
NM |
* H1 2016 EBITDA
restated to reflect the cancellation of the Mateus and Ferreira
distribution contracts in WEMEA, the reclassification of Pulco in
Spain to Private Label activity, and the sale of the Augustowianka
water brand in Poland.
For the first half of 2017, the
Branded business generated net sales of €122.2m, a -1.0% decrease
versus the previous year. Net sales growth of 2.8% and 34.5%
in the CEE and Asia Pacific clusters respectively was offset
by -12.1% and -1.9% sales decreases in the
Americas and WEMEA clusters. Other businesses posted
net sales growth of +11.3%.
The €3m increase in A&P
expense led to an EBITDA decrease in most clusters.
Consequently, the EBITDA reported by the Branded business in H1
2017 totalled -€0.6m, compared to the €0.8m reported in H1
2016. With the exception of the Americas region, which
generated EBITDA growth of 31.2% to €1.1m in the first half of the
year, all other clusters reported EBITDA decreases versus the
year-ago period.
Other Businesses generated an
EBITDA loss of -€1.3m in H1 2017, versus -€0.4m in the year-ago
period.
Western Europe, Middle East and
Africa: Higher advertising expense and one-off profit-sharing
charge
H1 2017 net sales in the Western
Europe, Middle East and Africa cluster (WEMEA) totalled €66.4m, a
-1.9% decrease versus the previous year. EBITDA in the WEMEA
region totalled €3.0m in H1 2017, a decrease of -16.5% compared to
the first semester of 2016.
Most of the pillar brands
delivered market share gains in the first half of the year.
In France, MBWS' spirits brands confirmed their dynamism in a
sluggish market: William Peel further consolidated its leadership
of the scotch whisky market with share growth of +0.4 points.
Sobieski also expanded its share of the market to reach a 15.7%
share. Fruits and Wine continued to strengthen its leadership
position in the flavored wine category, growing its market share by
+0.5 pts to 30.2%. (Sources: Nielsen YTD P06
2017; IRI P6 2017).
H1 2017 EBITDA was constrained by
a one-off charge of €0.5m related to employee profit-sharing in the
sale of Marie Brizard's historical headquarters in Fondaudège,
Bordeaux, and by increased advertising and promotion expense across
the cluster.
Central and Eastern Europe: EBITDA
decrease, but improving product mix and cost optimization in
Poland
Top-line growth in the Central and
Eastern Europe cluster (CEE) reached €43.0m in H1 2017, +2.8%
versus the previous year. The CEE cluster generated H1 2017
EBITDA of €2.2m, a decrease of -3.6% versus year ago.
The H1 2017 EBITDA decrease was
concentrated in Poland in the first quarter of the year.
Despite the EBITDA decrease, MBWS-Poland reported positive earnings
dynamics with an improvement in product mix driven by the
double-digit growth of Krupnik flavored vodka and lower cost of
goods sold resulting from production cost optimization. These
positive trends were offset primarily by higher trade support,
advertising and promotion in response to very strong competitive
pressure in the vodka market.
The results in Lithuania and
Bulgaria partially offset the performance in Poland due to positive
price mix and optimized cost of goods sold (fuelled by the new
alcohol rectification facility in Lithuania which was finalized in
mid-2016). The cluster's export markets also contributed to
growth.
Americas: EBITDA growth
The Americas cluster reported H1
2017 net sales of €11.2m, a decrease of -12.1% as compared to the
first half of the previous year, with the decline concentrated more
heavily in the first quarter of this year.
In the United States, Sobieski
out-performed the imported vodka segment in some states (those
measured by NABCA), although it has not been immune to the impact
of the strong competition in the vodka market. Sobieski
weakness was partially offset by the dynamic growth of MBWS pillar
brands Marie Brizard and Cognac Gautier. MBWS' pillar brand
sales also continued to grow significantly in Canada.
The cluster generated EBITDA of
€1.1m in H1 2017, an increase of 31.2% vs the previous year,
attributable to cost optimization and payment at the Corporate
level of a portion of the cluster's advertising and promotion
expenses. The positive results in the United States also offset
ongoing losses in Brazil, resulting from continuing macroeconomic
volatility.
Asia-Pacific: investing in
growth
The Asia-Pacific cluster reported
net sales of €1.6m in H1 2017, representing 34.5% growth versus the
previous year, and driven primarily by the ramp-up of William Peel
distribution in China. Sales of Marie Brizard in Australia
and Fruits & Wine in Japan also contributed to top-line growth
during the period.
EBITDA in the Asia-Pacific cluster
was -€0.7m during the period, compared to -€0.3m in H1 2016.
This loss is a result of significant brand investment in China
primarily, in keeping with MBWS' growth strategy for the
Asia-Pacific cluster, as well as the ongoing strengthening of MBWS'
Asian management teams.
Other Businesses
Other Businesses generated an
EBITDA loss of -€1.3m in H1 2017, versus -€0.4m in the year-ago
period, due primarily to the impact of the ongoing competitive
pricing pressure in the vodka market in Poland over the first half
of the year, which in turn had a significant impact on the results
of Sobieski Trade.
Corporate Expenses
Corporate expenses grew by 10.3%
in the period, as compared to H1 2016, and totalled €6.1m.
This is due in part to an increase in advertising and promotion
expense, a portion of which is recorded (in some cases, such as the
United States business) at the corporate level. The higher
expenses also reflect the ongoing strengthening of MBWS' management
team in the second half of last year, and the impact of an IFRS 2
charge related to employee compensation.
These expenses were partially
offset by lower consultant fees as the company continued to
internalize a number of functions.
H1 2017 Balance
Sheet and Cashflow
At 30 June 2017 the company had
shareholders' equity of €233.8m, essentially flat as compared to 31
December 2016.
In
€m
Cash position at
31 December 2016 |
Chge in WC 1 |
Chge in WC2 |
Taxes Paid |
Capex |
Change in bank loans |
Share buybacks |
Sold
Assets |
Non-controlling interest buybacks |
Others |
Cash position at 30 June 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49.9 |
33.0 |
-24.2 |
-1.2 |
-14.2 |
5.3 |
-1.5 |
13.5 |
-0.9 |
-2.0 |
57.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
MBWS' cash positon increased by
€7.8.m in H1 2017, from €49.9m at 31 December 2016 to €57.7m at 30
June 2017.
The company's cash position has
improved primarily due to an improvement in Working Capital 1
driven by more favorable payment terms to suppliers, particularly
in France. The establishment of a Sales and Operations
Planning system (a best practice within operations management) has
also enabled improved inventory management, with inventory levels
down slightly. Working Capital 2 was negatively affected by a
decrease in tax payables in Lithuania and Poland.
Capex during the period increased
by €14.2m and was used for the construction of a distillation
facility in Lancut, Poland.
The sale of Marie Brizard's
historical headquarters in Fondaudège, Bordeaux produced
extraordinary income of €13.5m.
The company's financial debt was
€59.6m at 30 June 2017, an increase compared to €52.0 at 31
December 2016. This is due primarily to bank debt of €62.5m,
in place since May 2016, with €45m drawn down at 30 June 2017.
Outlook
For the second half of 2017, MBWS
expects ongoing pricing pressure in the vodka markets in Poland and
the United States, with a potential short-term negative impact on
the company's margin. In the longer term, the trend toward
lower priced spirits provides further evidence of the pertinence of
MBWS' mainstream business model, and encourages the company in the
execution of its strategic plan for growth to 2020.
Financial
Agenda
MBWS will report its Q3 2017 net
sales on 7th November
2017.
About Marie
Brizard Wine & Spirits (MBWS)
Marie Brizard Wine & Spirits produces and sells a range of wine
and spirits primarily in Europe and the United States. MBWS
has distinguished itself for its know-how, the range of its brands,
and a long tradition and history of innovation. From the
inception of Maison Marie Brizard in Bordeaux, France in the year
1755, to the launch of Fruits and Wine in 2010, Marie Brizard Wine
& Spirits has successfully developed and adapted its brands to
make them contemporary while respecting their origins. MBWS
is committed to providing value by offering its customers bold,
trustworthy, flavorful and experiential brands. The company
currently has a broad portfolio of leading brands in their
respective market segments, most notably William Peel scotch
whisky, Sobieski vodka, Krupnik vodda, Fruits and Wine flavored
wine, Marie Brizard liqueurs and Cognac Gautier. Marie
Brizard Wine & Spirits is listed on the regulated market of
Euronext Paris, Compartment B (ISIN code FR0000060873, ticker MBWS)
and is included in the EnterNext© PEA-PME 150 index, among
others.
Press:
Stéphane Pedrazzi
stephane.pedrazzi@mbws.com
Tel: +33 1 76 28 40 71
Investors:
Raquel Lizarraga
raquel.lizarraga@mbws.com
Tel: +33 1 43 91 50 18
Simon Zaks, Image
Sept
szaks@image7.fr
Tel: +33 1 53 70 74 63
Appendix 1: H1 2017 Consolidated
Income Statement
(in thousands of euros) |
30.06.2017
(6 months) |
30.06.2016
(6
months) |
|
|
|
Net Sales |
212,495 |
205,012 |
Cost of Goods Sold |
(139,995) |
(132,571) |
External expenses |
(35,908) |
(34,788) |
Salary expenses |
(34,370) |
(32,366) |
Taxes and duties |
(4,141) |
(4,664) |
Depreciation and Amortization |
(4,095) |
(3,175) |
Other operating income |
4,348 |
4,262 |
Other operating expenses |
(4,391) |
(3,407) |
Recurring operating
profit |
(6,058) |
(1,697) |
Extraordinary income |
12,850 |
8,227 |
Extraordinary expenses |
(1,012) |
(4,704) |
Operating profit |
5,780 |
1,826 |
Interest income |
65 |
124 |
Interest expense |
(3,594) |
(957) |
Net cost of debt |
(3,529) |
(833) |
Other interest income |
5,283 |
1,382 |
Other interest expense |
(5,067) |
(17,679) |
Net interest expense |
(3,313) |
(17,130) |
Pre-tax income |
2,467 |
(15,304) |
Income tax/credit |
(254) |
1,662 |
Income from ongoing operations |
2,213 |
(13,642) |
Attributable net income |
2,160 |
(13,529) |
Earnings per share |
0.08 |
-0.50 |
Appendix 2: H1 2017 Consolidated
Balance Sheet
(in thousands of euros) |
30.06.2017 |
31.12.2016 |
|
(in thousands of euros) |
30.06.2017 |
31.12.2016 |
Long-term
assets |
|
|
|
Total shareholders' equity |
236,072 |
238,525 |
Goodwill |
28,581 |
28,408 |
|
Employee benefits |
5,676 |
5,470 |
Intangible assets |
111,194 |
110,065 |
|
Long-term provisions |
1,317 |
1,385 |
Property, plant and equipment |
71,414 |
61,868 |
|
Long-term loans |
5,133 |
4,082 |
Financial assets |
4,749 |
4,602 |
|
Deferred tax liabilities |
14,323 |
15,493 |
Long-term derivative instruments |
253 |
633 |
|
Other long-term liabilities |
2,387 |
2,391 |
Deferred taxes |
5,535 |
6,087 |
|
Long-term derivative instruments |
1,156 |
587 |
Total long-term assets |
221,727 |
211,662 |
|
Total long-term liabilities |
29,993 |
29,408 |
|
|
|
|
Short-term provisions |
3,504 |
3,913 |
Current assets |
72,858 |
75,931 |
|
Short-term portion of long-term debt |
47,795 |
45,418 |
Trade receivables |
75,715 |
103,140 |
|
Short-term debt |
6,682 |
2,535 |
Tax receivables |
1,177 |
699 |
|
Supplier and other payables |
73,449 |
70,993 |
Other short-term assets |
31,506 |
28,881 |
|
Tax liabilities |
920 |
806 |
Short-term derivative instruments |
579 |
356 |
|
Other short-term liabilities |
63,523 |
82,110 |
Cash and cash equivalents |
57,657 |
49,928 |
|
Short-term derivative instruments |
861 |
650 |
Total current assets |
239,492 |
258,936 |
|
Total current liabilities |
196,735 |
206,425 |
Assets held for disposal |
1,557 |
3,760 |
|
Liabilities held for disposal |
|
|
TOTAL ASSETS |
462,775 |
474,359 |
|
TOTAL LIABILITIES |
462,755 |
474,359 |
Appendix 3: H1 2017 Consolidated
Cashflow Statement
(in thousands of euros) |
30.06.2017 |
30.06.2016 |
|
|
|
Total consolidated net profit |
2,213 |
(13,642) |
Amortization and provisions |
1,500 |
(1,379) |
Revaluation gains/losses (fair value) |
77 |
33 |
Impact of discounting |
|
14,615 |
Difference between fair value and cash obtained on transfer of
treasury shares |
(140) |
34 |
Gains/losses on
disposals and dilution |
(8,154) |
(4,929) |
Operating cash flow after net cost of debt and
tax |
(4,505) |
(5,269) |
Income tax charge (credit) |
254 |
(1,662) |
Net
cost of debt |
3,529 |
833 |
Operating cash flow before net cost of debt and
tax |
(721) |
(6,098) |
|
|
|
Change in working capital 1 (inventories, trade receivables and
payables) |
32 955 |
9,953 |
Change in working capital 2 (other items) |
(24,185) |
(77,839) |
Taxes paid |
(1,216) |
(3,917) |
Cash flow from operating activities |
6,832 |
(77,902) |
|
|
|
Purchase of property, plant and equipment and intangible
assets |
(14,028) |
(6,470) |
Increase in loans and advances granted |
(313) |
(2,997)) |
Decrease in loans and advances granted |
147 |
257 |
Disposal of property, plant and equipment and intangible
assets |
13,548 |
3,430 |
Impact of change in consolidation scope |
(925) |
(792) |
Cash flow from investing activities |
(1,571) |
(6,572) |
|
|
|
Capital increase |
34 |
35,192 |
Share buybacks |
(1,500) |
(3,282) |
New
loans |
1,551 |
43,801 |
Loan
repayment |
(349) |
(1,379) |
Net
interest paid |
(1,332) |
(693) |
Net
change in short-term debt |
4,149 |
572 |
Cash flow from financing activities |
2,552 |
74,211 |
|
|
|
Impact from changes in foreign exchange rates |
(84) |
(239) |
Change in cash and cash equivalents |
7,729 |
(10,501) |
Appendix 4: H1 2017 Net Sales by
Cluster
H1 2017 Net Sales
by Cluster
|
H1 2016 Restated |
Organic Growth |
Currency impact |
H1 2017 |
Organic growth (excl. Currency impact) |
Organic growth (incl. Currency impact) |
WEMEA |
67.7 |
-1.3 |
0.0 |
66.4 |
-1.9% |
-1.9% |
France |
56.3 |
-0.9 |
0.0 |
55.4 |
-1.7% |
-1.7% |
Rest of WEMEA |
11.4 |
-0.4 |
0.0 |
11.0 |
-3.2% |
-3.2% |
CEE |
41.2 |
1.2 |
0.6 |
43.0 |
2.8% |
4.4% |
Poland |
27.6 |
-0.8 |
0.6 |
27.5 |
-2.8% |
-0.5% |
Rest of CEE |
13.5 |
1.9 |
0.0 |
15.5 |
14.3% |
14.3% |
Americas |
12.1 |
-1.5 |
0.6 |
11.2 |
-12.1% |
-7.4% |
Asia
Pacific |
1.2 |
0.4 |
0.0 |
1.6 |
34.5% |
34.5% |
Sub-Total Branded Business |
122.2 |
-1.2 |
1.2 |
122.2 |
-1.0% |
0.0% |
Other
Businesses: |
|
|
|
|
|
|
Sobieski Trade |
41.1 |
6.9 |
1.1 |
49.2 |
16.9% |
19.6% |
Private Label |
39.0 |
2.1 |
0.0 |
41.1 |
5.4% |
5.4% |
Sub-Total Other Businesses |
80.1 |
9.1 |
1.1 |
90.3 |
11.3% |
12.7% |
TOTAL MBWS |
202.3 |
7.9 |
2.3 |
212.5 |
3.9% |
5.0% |
* H1 2016 net
sales restated to reflect the cancellation of the Mateus and
Ferreira contracts in WEMEA, the reclassification of Pulco in Spain
to Private Label activity ,the sale of the Augustowianka water
brand in Poland (Sobieski Trade), and the cancellation of the
Kerrygold contract in the US.
MBWS H1 2017 Results
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Marie Brizard Wine & Spirits via
Globenewswire
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