MBWS: Strategic Plan 2019 - 2022
Paris, 25th March 2019
Strategic Plan 2019 -
2022
- Building the foundations for a sustainable return to
profitable growth in the medium term
- 2022 EBITDA objective in a range of €13m to
€19m
- Supplement to the Prospectus available (in
French)
- COFEPP will exercise €15m of its Short-Term Stock
Warrants, as agreed previously
- Production has begun at Lancut
Marie Brizard Wine & Spirits (Euronext:
MBWS) today published its new strategic plan for the years 2019
-2022.
With the publication of this strategic plan,
Marie Brizard Wine & Spirits has disclosed the organization and
business model that will drive the creation of a profitable and
sustainable Group in the wine and spirits markets. In order
to achieve this objective, the Group will pursue a transformation
based on six strategic priorities:
- Focus the recovery measures and investments on value-creating
assets;
- Redefine the Group’s international footprint;
- Develop value-creating partnerships;
- Simplify the operating model and reduce the cost base;
- Strengthen synergies and collaboration with COFEPP;
- Engage the Group’s employees and provide them with the
necessary tools for planning and control.
This transformation will take place in
two stages:
- In the short-term (2019 and 2020),
confirm the strategic direction according to each activity’s
contribution to profitability improvement, leading to a gradual
return to positive EBITDA.
- In the medium-term (2021 and 2022), set
the conditions for future growth by reinvesting the cash flow
generated, with the objective of delivering EBITDA in a range of
€13m to €19m in the year 2022.
Andrew Highcock, Chief Executive Officer of
Marie Brizard Wine & Spirits, declared, “With this strategic
plan, we have reassessed Marie Brizard Wine & Spirits’ business
model, by pragmatically addressing our industrial and geographic
footprint, as well as our organization. The strategic
analysis carried out since I joined MBWS as CEO has exposed the
need to return to the fundamentals of our business in order to
build a sustainable Group, capable – as a result of this strategic
plan – of generating profitable growth. Instead of volumes,
we will prioritize value growth, profitability and the cash flow
generation that should come from our strategic decisions. The
closer collaboration with COFEPP, which was authorized less than a
month ago, opens a number of different kinds of
opportunities. We have identified several of these
opportunities and they will be implemented gradually. We
understand the challenges facing our business and our roadmap is
clear. We thus face the coming years with agility and
ambition.”
Strategic priorities for 2019 to
2022
- Focus the recovery efforts and investment on
value-creating brands and assets
With a portfolio of leading brands that generate
in-store traffic, and an attractive price positioning in its key
geographies, Marie Brizard Wine & Spirits has a solid base from
which to turn its business around, and from which to develop a
sustainable business. To this end, the Group’s strategy
consists of concentrating its resources on the brands that have the
greatest value-creating capacity in the long-term.
At the same time, the Group is establishing a
systematic assessment of its assets in light of their financial,
tactical and strategic importance, and of their capacity to create
value in the long term. Within this context, choices could be
made to ensure the coherence of the Group’s portfolio of assets and
greater latitude to implement change, to enable more significant
investment in strategic and profitable activities.
As indicated previously, the complete
implementation of this strategic plan remains subject to reaching
an agreement with MBWS’ banking partners within the framework of
ongoing discussions. In addition to the commitment made by
COFEPP to exercise €15m of its Short-Term Stock Warrants, if the
contribution by shareholders resulting from the exercise of their
Stock Warrants is deemed insufficient, the Group may find itself in
the position – after March 2020 – of needing to sell assets or
brands that are non-contributive to EBITDA, or to reestablish lines
of credit.
- Redefine the Group’s international
footprint
A pragmatic and case-by-case approach is
currently being implemented to assess and redefine the Group’s
international footprint, based on the potential for long-term value
creation. Each of the affiliates has a roadmap and a concrete
action plan, with the objective of sustainable profitability in
each case. Thus, the strategy for the Group’s main markets is
as follows:
France: maximize value via a targeted
commercial strategy
In France, MBWS’ recovery will depend on
increasing the revenue generated by its products, in partnership
with the Group’s customers. This pro-active financial
rationalization strategy could, in the short-term, have a negative
impact on volumes. The strategy will rely on the strength of
the brands, the brand loyalty demonstrated by customers, and the
effectiveness of the value-for-money proposition.
The Group also intends to deploy a dedicated
commercial strategy, as well as targeted investments in support of
the brands, accounts and regions that are deemed to be the most
value-creating. This strategy and related investments will be
carried out both in the off-trade (large retailers) and in the
on-trade segments.
Poland: accelerate the strategy for
returning to profitability; production at Lancut has begun
As in France, the commercial strategy in Poland
is now based on the search for value creation. The Group
intends to base its plans on:
- The growth and strengthening of the distribution agreements
finalized in H2 2018;
- On-going strategy to broaden the client base;
- Commercial activities and marketing investment in brands,
focused on higher-margin products and formats;
- The improvement of production costs linked to the beginning
of production and advantages delivered by the Lancut distillery,
which will be the subject a press release in April.
United States: achieve critical
mass
In the American market, the Group must develop a
business model with the objective of ensuring the sustainable
profitability of its operations. Marie Brizard Wine &
Spirits is evaluating several options, and in the short-term the
Company plans to establish an active strategy aiming to grow the
top-line of its American subsidiary. The commercial strategy
will be based on two main levers:
- A prioritization of the commercial efforts and investments,
focused on growing regions: New York state and the control states;
- Improvement in the product mix via strengthening and activation
of the higher margin brands, and those with higher growth
potential, in particular Marie Brizard and Cognac
Gautier.
- Establish value-creating
partnerships
Marie Brizard Wine & Spirits has set an
objective for all of its subsidiaries to be profitable by the end
of this strategic plan. In keeping with the best practices of
all global spirits companies, the Group will assess each of its
local partnerships, with a view to strengthening its strategic
positioning or financial profile. This review will also take
into account commercial and manufacturing considerations, in line
with the critical mass of operations in the different markets.
- Simplify the operating model and reduce the cost
base
One of the priorities of the strategic plan is
to adapt the strategy and cost base to the size of operations, and
to ensure the ability to generate profit and cash flow. In
addition to the ongoing cost structure adaptation efforts, cost
savings plans will be launched with a view to optimizing the
Group’s manufacturing, commercial and support function costs.
This strategic priority is expected to generate
results that are strongly correlated to the strategic options that
will be chosen in terms of the Group’s international footprint and
its partnership choices.
- Strengthen the synergies and collaboration with
COFEPP
Marie Brizard Wine and Spirits’ closer
collaboration with COFEPP makes sense from an operational point of
view, assuming that the pooling of resources between the two groups
achieves benefits for both entities. In addition to the
strong complementarity of the two group’s brand portfolios, several
opportunities have been identified within the context of this
strategic plan, particularly in terms of cost and revenue
synergies.
Nevertheless, the possibility of open and
complete collaboration between leadership teams and sharing of
information between the two Groups only became possible as of 28
February 2019 when the French anti-trust Authorities allowed the
closer collaboration between them. Consequently, the complete
quantified analysis of the benefits expected has not yet been
finalized.
- Engage the Group’s employees and provide them with
the necessary tools for planning and control
Employee engagement with the new strategic plan
will be one of the keys to its success. A pragmatic approach
is being taken, based on what exists already, and the following
areas of development:
- Increase the capabilities of employees to strengthen
operational execution;
- Enable greater mobility within the Group;
- Build an organization in line with the new operating model.
The Group is currently developing projects in
order to ensure the availability of tools that will enable it to
drive its strategy, both in terms of manufacturing and financial
activities. The project to deploy an ERP system (Enterprise
Resource Planning) is on schedule with the planned timeframe.
It is expected to be operational during H2 2019.
Financial impact
Estimated EBITDA for FY 2018 is -€28m[1].
The Group has established as its objective to
improve its EBITDA between the years 2018 and 2022 via the
combination of the following:
- A value and product mix strategy;
- Optimization of the cost base;
- Synergies with COFEPP, estimated on a first view in a range of
€3m and €6m annually, beginning in 2020.
Based on the six strategic priorities
detailed in this document, the Group has set as its FY 2022
objective to reach EBITDA in a range of €13m to
€19m.
A detailed presentation of this strategic plan
is on the Group’s website, (www.mbws.com) under “Financial
Presentations.”
Availability of the Supplement to the
Prospectus
The Company has also announced that the French
Financial Markets Authority (“AMF“)has
affixed visa n° 19-114 on the Supplement (the
”Supplement”) to the Prospectus, which
received visa n°19-066 from the AMF on 28 February 2019,
regarding:
- the issue and admission to trading on the
regulated market of Euronext Paris of 37,762.312 stock warrants,
which can be exercised for a period of one month (the
“Short-Term Stock Warrants”) and allocated
free of charge to shareholders (including the shares held by COFEPP
after the reserved issue of shares), which could potentially lead
to the issue of 16,418,396 new shares at a price of €3 each
(including issue premium);
- the issue and admission to trading on the
regulated market of Euronext Paris of 37,762.312 stock warrants,
which can be exercised for a period of 42 months (the
“Long-Term Stock Warrants”) and allocated
free of charge to shareholders (including the shares held by COFEPP
after the reserved issue of shares), which could potentially lead
to the issue of 16,418,396 new shares at a price of €3 each
(including issue premium); and
- the admission to trading on the regulated
market of Euronext Paris of 32,836,792 new shares from the
exercising of the Short-Term Stock Warrants and Long-Term Stock
Warrants.
The prospectus (the
“Prospectus”) is comprised of:
- The Company’s Registration Document, submitted to the AMF on 10
January 2019 under the number D.19-0010 ;
- The Transaction Note, under the visa number 19-066 provided by
the AMF on 28 February 2019 (the ”Transaction
Note”);
- The Prospectus summary (included in the Transaction Note);
and
- The Supplement to the Prospectus which includes the supplement
to the summary of the Prospectus.
Copies of the Prospectus (in French) are
available free of charge at the Company’s headquarters, on the
Company’s website (www.mbws.com), and on the AMF’s website
(www.amf-france.org). Investors are urged to read carefully
the detailed risks outlined in point 2.3 of the management report
included in the Company’s Registration Document, and in Chapter 2
of the Transaction Note.
Timeframe for allocation and
exercising of the Short-Term Stock Warrants and Long-Term Stock
Warrants
In keeping with the indicative timeframe
mentioned in section 5.1.3 of the Transaction Note, the allocation
of Short-Term Stock Warrants and Long-Term Stock Warrants will take
place on 29 March 2019, for the benefit of the Company’s registered
shareholders as of 28 March 2019. The period for exercising
the Short-Term Stock Warrants and the Long-Term Stock Warrants will
close on 29 April 2019 for the Short-Term Stock Warrants, and on 29
September 2022 for the Long-Term Stock Warrants.
The free Stock Warrants allocated to
shareholders will be submitted for admission to trading on the
regulated market of Euronext Paris. The Short-Term Stock
Warrants will be admitted for trading under ISIN code FR0013404936,
and the Long-Term Stock Warrants will be admitted to trading under
ISIN code FR0013404944.
The new shares created by the exercising of the
Stock Warrants will be submitted periodically for admission to
trading on Euronext Paris (Compartment C) and will be tradable on
the same terms as existing MBWS shares.
Marie Brizard Wine &
Spirits produces and sells a range of wine and spirits
across four geographic clusters: Western Europe, Middle East &
Africa, Central and Eastern Europe, the Americas, and Asia-Pacific.
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 1755, to
the launch of Fruits and Wine in 2010, MBWS 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 has a broad portfolio of leading
brands in their respective market segments, most notably William
Peel scotch whisky, Sobieski vodka, Krupnik vodka, Fruits and Wine
flavored wine, Marie Brizard liqueurs and Cognac Gautier. MBWS 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.
Investor ContactRaquel
Lizarraga raquel.lizarraga@mbws.comTél :
+33 1 43 91 50 |
Press ContactSimon Zaks, Image
Septszaks@image7.frTél : +33 1 53 70 74
63 |
Important information
No communication and no information in respect
of this transaction may be distributed to the public in any
jurisdiction where a registration or approval is required. No steps
have been or will be taken in any jurisdiction (other than France)
where such steps would be required. The issue, the subscription for
or the purchase of MBWS’ shares and/or warrants may be subject to
specific legal or regulatory restrictions in certain
jurisdictions.
This announcement is not a prospectus within the
meaning of Directive 2003/71/EC of the European Parliament andthe
Council of November 4th, 2003, as amended, in particular by
Directive 2010/73/EU (together, the “ProspectusDirective”).
No securities offering will be opened to the
public in France before the delivery of the visa on a prospectus
prepared in compliance with the Prospectus Directive, as approved
by the French Autorité des marchés financiers.
With respect to the member States of the
European Economic Area which have implemented the Prospectus
Directive (each, a “relevant member State”), other than France, no
action has been undertaken or will be undertaken to make an offer
to the public of the securities requiring publication of a
prospectus in any relevant member State. As a result, the new
shares and/or warrants of MBWS may only be offered in relevant
member States (i) to qualified investors, as defined by the
Prospectus Directive; or (ii) in any other circumstances, not
requiring MBWS to publish a prospectus as provided under Article
3(2) of the Prospectus Directive.
The distribution of this press release is not
made, and has not been approved, by an “authorized person” within
the meaning of Article 21(1) of the Financial Services and Markets
Act 2000. As a consequence, this press release is directed only at
persons who (i) are located outside the United Kingdom, (ii) have
professional experience in matters relating to investments within
the meaning of Article 19(5) of the Financial Services and Markets
Act 2000 (FinancialPromotions) Order 2005 (as amended), (iii) are
persons falling within Article 49(2)(a) to (d) (high net worth
companies, unincorporated associations, etc.) of the Financial
Services and Markets Act 2000 (Financial Promotions)Order 2005 (as
amended) or (iv) are persons to whom this press release may
otherwise lawfully be communicated (all such persons mentioned in
paragraphs (i), (ii), (iii) and (iv) collectively being referred to
as “Relevant Persons”). The securities are directed only at
Relevant Persons and no invitation, offer or agreements to
subscribe, purchase or acquire 6the securities may be proposed or
made other than with Relevant Persons. Any person other than a
Relevant Person may not act or rely on this document or any
provision thereof. This press release is not a prospectus which has
been approved by the Financial Conduct Authority or any other
United Kingdom regulatory authority within the meaning of Section
85 of the Financial Services and Markets Act 2000.
This press release does not constitute or form a
part of any offer or solicitation to purchase or subscribe for
securities in the United States. Securities may not be offered,
subscribed or sold in the United States absent registration under
the U.S. Securities Act of 1933, as amended (the “U.S. Securities
Act”), except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements thereof. The warrants
and the shares of MBWS and rights in respect thereof have not been
and will not be registered under the U.S. Securities Act and MBWS
does not intend to make a public offer of its securities in the
United States.
The distribution of this document in certain
countries may constitute a breach of applicable law. The
informationcontained in this document does not constitute an offer
of securities for sale in the United States, Canada, Australia or
Japan.
This press release may not be
published, forwarded or distributed, directly or indirectly, in the
United States (including its territories and dependencies and any
state of the United States), Canada, Australia or
Japan.
Forward-looking
statements
This press release contains forward-looking
statements regarding objectives and the strategy of the MBWS
Group. MBWS’ management believes that this forward-looking
information is based on reasonable assumptions, however these
assumptions do not constitute a guarantee regarding the future
performance of MBWS. The actual results could differ
materially from these forward-looking statements, due to a number
of possible risks and uncertainties, most of which are not under
the control of MBWS. These risks include particularly risks
related to the carrying out of the strategic plan and the risks
described in the documents submitted by MBWS to the AMF, including
those outlined in section 2.3 of the management report reproduced
in the Company’s Registration Document.
[1] Non-audited number.
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