Marie Brizard Wine & Spirits: FY19 ANNUAL RESULTS
Paris, 27 May 2020
2019 Annual Results
§
2019 EBITDA1 improved by €15.1M
compared to 2018 restated to €
-12.1M
€-17.3M before IFRS 16 & IFRS 5 representing a + €10.7M
improvement
- Increase in the profitability of the WEMEA cluster supported by a
strategy of reducing the
unprofitable volumes in France and new distribution partnerships
- Persistent difficulties in Poland (CEE Cluster) in a still very
competitive market
- Net income, Group share 2019: € -65,9M
- Strict measures to control cost in the face of the
Covid-19 crisis
- Suspension of guidance due to the uncertain macro
environment
Note: all net sales growth figures mentioned in
this press release are expressed at constant structure and exchange
rates, unless stated otherwise
Marie Brizard Wine &
Spirits (Euronext: MBWS) today announced its consolidated
results for the financial year 2019, as approved by the Group's
Board of Directors held on May 26th, 2020. Audit procedures have
been completed.
Andrew Highcock, CEO of Marie Brizard
Wine & Spirits, comments: " The improvement in EBITDA
2019 demonstrates the relevance of the choices and execution of our
strategic transformation plan aimed at a return to profitability.
Significant advances will take full effect in 2020: the
implementation of distribution agreements in Spain, the United
States and France with the redeployment of part of the field sales
force, and the adoption of a sales policy focusing on profitable
volumes. Our objective is also to reduce our cost base by focusing
our efforts on value-creating assets, where our differentiation and
innovation pay off. In this unprecedented context of the Covid-19
crisis, cost control remains our priority and we are taking all
necessary measures to limit the impact of this pandemic. The
interim financing agreement that has just been signed with COFEPP
secures our short-term liquidity in this critical period.
Nevertheless, the extent of the effects of this health crisis in
2020 is still uncertain and forces us to remain cautious at this
stage about the outlook. Our teams remain fully committed and
focused on the success of our Group.”
Simplified income statement for FY
2019
|
in M€, except EPS |
2018excl. IFRS5
|
2019excl. IFRS 16 &
IFRS 5 |
Organic Growth
excl.Change |
2018incl. IFRS 5 |
2019incl. IFRS16 & IFRS5
|
Var° incl. IFRS
M€ except % |
Net Sales (excluding excise tax) |
388.9 |
365.0 |
|
280.8 |
275.5 |
-1.9% |
EBITDA |
-28.0 |
-17.3 |
+38.2% |
-27.2 |
-12.1 |
+15.1 |
Recurring Operating Profit (Loss) |
-37.9 |
-31.1 |
|
-35.9 |
-28.4 |
+ 7.5 |
Attributable Net Income (Loss) |
-61.9 |
-66.5 |
|
-61.9 |
-65.9 |
|
Net Income (Loss) from continuing operations |
-61.9 |
-66.5 |
|
-58.9 |
-58.6 |
|
Earnings per share |
-2.12 |
|
|
-2.12 |
-1.60 |
|
RESULTS BY CLUSTER
2019 Net Sales
|
in € M |
2018 |
OrganicGrowth |
Forex Impact |
Activity discontinued IFRS 5 |
2019 |
Organic Growth (excl. FX impact) |
Reported Growth (inc. FX impact) |
Activity discontinued IFRS 5 |
|
|
|
|
|
|
|
|
|
|
BRANDED BUSINESS |
195.7 |
1.4 |
0.4 |
-3.3 |
194.2 |
0.7% |
-0.7% |
-1.7% |
WEMEA |
118.4 |
-11.4 |
0.0 |
0.0 |
106.9 |
-9.6% |
-9.6% |
|
CEE |
57.2 |
12.2 |
-0.4 |
-3.3 |
65.9 |
21.4% |
20.9% |
-5.8% |
Americas |
17.0 |
1.1 |
0.8 |
0.0 |
18.9 |
6.6% |
11.2% |
|
Asia Pacific |
3.1 |
-0.5 |
0.0 |
0.0 |
2.5 |
-17.4% |
-17.4% |
|
Others Businesses |
193.3 |
-25.1 |
-0.7 |
-86.2 |
81.2 |
-13.0% |
-13.3% |
-44.6% |
|
TOTAL MBWS |
388.9 |
-23.7 |
-0.3 |
-89.5 |
275.5 |
-6.1% |
-6.1% |
-23,0% |
|
TOTAL MBWS (restated IFRS5) |
280.8 |
-3.0 |
0.4 |
-2.6 |
275.5 |
-1.1% |
-0.9% |
-0.9% |
2019 sales were down -1.9% compared to the
restated 2018 financial year. The Branded Business generated
revenue of €194.2 million in 2019, representing organic growth of
0.7% compared to 2018, driven by strategic changes and a proactive
sales policy that favours value creation over volume. This increase
is attributable to the Americas and Central Europe regions.
As a result, the gross margin rate reached 35%
compared to 33.8% in 2018, an increase of 1.2 points.
The 2019 EBITDA reached €-12.1 million in 2019,
representing an improvement of €15.1million compared to 2018, of
which €+5.2million related to the 1st application of the IFRS 16
accounting standard on January 1, 2019 and of the IFRS 5. This
increase results in particular from the improvement in gross margin
and the almost 20% decrease in external expenses over the year,
particularly marketing expenses.
2019 EBITDA
EBITDA |
31.12.2018 |
Organic Growth |
Forex impact |
31.12.2019 |
|
Organic Growth (excl. FX impact) |
Organic Growth (incl. FX) |
|
IFRS 16 + IFRS 5 |
31.12.2019 |
(in € M) |
excl. IFRS16 |
incl. IFRS 16 + IFRS 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRANDED BUSINESS |
-13.9 |
9.8 |
0.0 |
-4.0 |
|
71.0% |
71.1% |
|
1.9 |
-2.1 |
WEMEA |
|
3.9 |
2.5 |
0.0 |
6.5 |
|
63.8% |
63.8% |
|
0.7 |
7.2 |
CEE |
|
-14.5 |
7.1 |
0.1 |
-7.4 |
|
48.7% |
49.3% |
|
0.9 |
-6.5 |
Americas |
|
-2.4 |
0.1 |
-0.1 |
-2.4 |
|
4.7% |
1.9% |
|
0.2 |
-2.1 |
Asia Pacific |
|
-0.8 |
0.1 |
0.0 |
-0.7 |
|
16.4% |
13.9% |
|
0.0 |
-0.7 |
HOLDING |
-10.8 |
-0.2 |
|
-10.9 |
|
-1.5% |
-1.5% |
|
1.7 |
-9.2 |
TOTAL BRANDED BUSINESS |
-24.6 |
9.7 |
0.0 |
-14.9 |
|
39.3% |
39.4% |
|
3.6 |
-11.3 |
OTHER BUSINESSES |
-3.4 |
1.0 |
0.0 |
-2.3 |
|
30.0% |
30.4% |
|
1.6 |
-0.7 |
TOTAL MBWS |
-28.0 |
10.7 |
0.0 |
-17.3 |
|
38.2% |
38.3% |
|
5.2 |
-12.1 |
In 2019, EBITDA of the Branded Business
excluding the cost of the holding company amounted to €-4.0 million
excluding IFRS16 & IFRS 5 (€-2.1 million after IFRS 16 and IFRS
5), reflecting an improvement of €+9,9 million compared to the
EBITDA for fiscal year 2018. This marked improvement reflects the
commercial policies adopted as part of the strategic plan to better
protect the gross margin of these activities.
The WEMEA cluster benefited
from the selective volume reduction adopted on the French market
and the distribution synergies implemented in Spain and
Scandinavia. This strategy had a favourable impact on the
profitability of the region, with EBITDA excluding IFRS 16 reaching
€6.5 million in 2019 (€+7.2 million after IFRS 16), up 63.8%
compared to the previous year.
In the CEE cluster, sales grew
by a +21.4% in 2019, benefiting in particular in Poland from the
windfall effect in the 4th quarter ahead of the change in taxation
(10% increase in excise duties applied as of January 1,
2020). However, in a still highly competitive vodka market
and despite a determination to better control sales budgets and
refocus the portfolio on profitable ranges in Lithuania, the
cluster's EBITDA at the end of 2019, up €7.1 million compared with
2018, remained negative at €-7.4 million before IFRS 16 (€-6.5
million after IFRS 16).
In the Americas cluster,
revenue growth (+6.6%) in both Brazil and the US market made it
possible to absorb the cost of inventory clean-up and
reorganization in the United States, following the implementation
of the partnership with Sazerac. The cluster's EBITDA thus remains
stable at €-2.4 million in 2019 (€-2.1 million after IFRS 16 &
IFRS 5).
The decline in EBITDA of the
Asia-Pacific cluster was limited to €-0.1 million,
amounting to €-0.7 million at the end of 2019.
Sales of Other Businesses
(Private Label in particular) are down 5.3% in fiscal year 2019, as
the Group favoured profitability over volumes in a difficult
context in France. Negative EBITDA improved by €1 million to €-2.3
million (€-0.7 million including IFRS 16& IFRS 5).
Holding costs remained
relatively stable compared to 2018.
After taking into account other net
non-operating expenses related to the Group's financial
restructuring (€-23.2 million) and the financial result of €-6.6
million, mainly corresponding to the cost of financial debt, the
Group's share of net income was €-65.9 million for fiscal year
2019.
Balance sheet
At December 31, 2019, taking into account the
results of the period, the Group's shareholders' equity amounted to
€93.7 million compared to €103.3 million at the end of
2018.
Net financial debt amounted to €46.7 million at
the end of December 2019, a decrease of €22.3 million compared to
2018. At the end of December 2019, gross financial debt consisted
mainly of the senior loan drawn down for €45 million. In accordance
with the agreements announced on December 20, 2019, this loan was
sold to COFEPP, with sale of the receivables realized in January
2020.
The certification reports on the consolidated
and annual financial statements are in the process of being issued
and will contain a paragraph to draw the reader's attention to the
significant uncertainty related to events or circumstances likely
to affect the continuity of operations mentioned in the notes to
the financial statements, as well as an observation on the first
application of IFRS 16 relating to leases and IFRIC 23 on
uncertainties about tax treatments.Covid-19 –
Outlook
More than ever, the Group's strategy remains
focused on implementing the strategic initiatives, defined in March
2019, in terms of their contribution to improving operating
profitability.
Significant progress in the execution of the
Group's strategic plan was announced in 2019 and early 2020,
including new distribution agreements with partners in Spain and
the United States, the disposals of Porto Pitters and Sobieski
Trade and the redeployment of part of the field sales force in
France.
Since March 2020, the global fight against
Covid-19 has imposed restrictions that are currently impacting
Marie Brizard Wine & Spirits' activities in some of its
markets. With the extension of the containment measures, these
significant effects are expected to last at least through the
second quarter of 2020.
Even if it is too early to assess the impact of
Covid on the 2020 financial year, both the commercial results at
the end of Q1 2020 (as published in the press release of 29 April
last) and those at the end of April, with Group net sales of €85.9
million (-3% compared to 2019 on a constant scope and exchange rate
basis), in line with our estimates, partly due to the bulk
business, demonstrate to date the resilience of Marie Brizard Wine
& Spirits' business.
A great deal of effort is made to ensure
business continuity while ensuring the health of employees. Since
the beginning of the crisis and the containment measures, the
Group's stakeholders have been meeting three times a week to review
the activity in each of the Group's entities, ensure the
implementation and monitoring of best practices, and implement any
measures required by the situation.
In this context, management is taking the
necessary initiatives to limit the effects of the pandemic on its
cash position and to ensure that its resources are allocated to the
Group's priority needs, through a weekly review. In addition to the
measures taken as part of the strategic plan, it is working to
achieve reductions in fixed costs and overheads, which are reviewed
and adjusted according to the anticipated impact on the business.
Working capital requirements are also strictly controlled. The
Group is also taking all necessary steps to benefit from the
government measures implemented in Europe, aimed at enabling
companies to adjust their personnel costs to a level of activity
that deteriorated during the crisis, while protecting jobs.
Even if the first outcomes of the execution of
the strategic plan are encouraging, the uncertainty and the
duration of the global Covid-19 pandemic do not allow Marie Brizard
Wine & Spirits to assess precisely the impact of the Covid-19
crisis on its 2020 forecast activity to date. As a result, the
Group cannot confirm at this stage its previously announced EBITDA
objective for 2022.
POST CLOSURE EVENTS
Agreement to sell to COFEPP all the receivables of
MBWS's bank lenders
In accordance with this agreement, COFEPP signed
a tripartite agreement on January 17, 2020 between MBWS, COFEPP and
MBWS' bank lenders to acquire the receivables resulting from the
€45 million credit agreement signed on July 26, 2017 and the
overdrafts drawn. The effective sale of the aforementioned
receivables took place at the end of January 2020.
In this context, COFEPP has confirmed that it
will grant MBWS a waiver on the payment of all bank claims acquired
to be capitalized in the context of the planned capital increase.
This waiver has been renewed on 20 May 2020, expiring on 26 January
2021, in order to take into account a possible delay in the
implementation of the planned capital increase.
Implementation of a 1Bis Advance in May
2020
In accordance with the agreement signed on
December 20, 2019 (the "Initial Agreement"), COFEPP entered into a
first current account advance with MBWS and MBWS France in the
amount of €15 million which was put in place during the first
quarter of 2020 (see press release dated January 17, 2020).
As a reminder, the Initial Agreement also
provided for a second current account advance in the amount of € 17
million, which was to be made available to MBWS during the first
quarter of 2020 (the "Advance No. 2"), subject to certain
conditions. As the conditions precedent of the Advance n°2 have not
yet been lifted to date, and the fulfilment in particular of the
condition to amend the Scotch Whisky bulk supply contract remains
uncertain, it was decided to amend the Initial Agreement in order
to secure the Group's immediate cash needs, through a new agreement
entered into on May 13, 2020 (see press release of May 13,
2020).
In the framework of this amended agreement,
COFEPP made available on 25 May 2020 a current account advance of €
6 million (remunerated at the annual capitalised rate EURIBOR 3
months with a floor at zero + 425 bps) in favour of MBWS. An
additional current account advance for a maximum amount of € 4
million is also provided for to meet the cash requirements of the
MBWS Group until 15 July 2020, subject to the approval of the
COFEPP and upon proof of the cash requirements concerned. The
amount of these advances will be deducted from the initially
planned amount of Advance No. 2, in the event that the conditions
for the implementation of the latter are lifted.
The Group's 2019 annual and consolidated
financial statements have been prepared in accordance with the
going concern principle, taking into account the known situation at
the closing date of the financial statements, in particular taking
into account the latest post-closing events as described above, the
latest estimates of cash requirements made in the context of the
evolving health crisis related to Covid-19 and on the assumption
that the conditions precedent to Advance No. 2 in the amount of €17
million would be lifted in the coming months, thus enabling the
recapitalisation of the Group.If the above assumptions were not to
be met, the Group might not be able to realise its assets and repay
its debts in the normal course of business, and the valuation and
classification of assets and liabilities could be significantly
impacted.
Financial Calendar
- Availability of the Universal Registration Document, including
the annual financial report: 2 June 2020
- General Meeting of Shareholders on July 31, 2020, in the
presence of the members of the Board of Directors and
shareholders
About Marie Brizard Wine & Spirits Marie
Brizard Wine & Spirits is a wine and spirits group based in
Europe and the United States. Marie Brizard Wine & Spirits
stands out for its know-how, a combination of brands with a long
tradition and a spirit resolutely turned towards innovation. From
the birth of the Maison Marie Brizard in 1755 to the launch the
Fruits and Wine in 2010, the Marie Brizard Wine & Spirits Group
has been able to develop its brands in a modern way while
respecting their origins. Marie Brizard Wine & Spirits'
commitment is to offer its customers trustworthy, bold and full of
flavors and experiences. The Group now has a rich portfolio of
leading brands in their market segments, including William Peel,
Sobieski, Krupnik, Fruits and Wine, Marie Brizard and Cognac
Gautier.
Marie Brizard Wine & Spirits is listed on
Euronext Paris Compartment B (FR0000060873 - MBWS) and is part of
the EnterNext© PEA-PME 150 index
ContactImage
Sept Claire Doligezcdoligez@image7.frPhone: +33 (0)1 53 70
74 70 |
APPENDIX
FY 2019 Consolidated Financial Statements
INCOME STATEMENT
(in €000) |
31.12.2019 |
31.12.2018 Restated (1) |
NET
SALES |
483,485 |
472,855 |
Excices tax |
(207,999) |
(192,102) |
NET SALES
EXCl TAX |
275,486 |
280,753 |
Cost of goods
sold |
(179,178) |
(185,929) |
External
charges |
(44,852) |
(55,517) |
Salary
expenses |
(56,450) |
(59,556) |
Taxes and
Duties |
(3,957) |
(4,837) |
Depreciation and
Amortization |
(21,389) |
(9,704) |
Other operating
income |
10,135 |
10,805 |
Other operating
expenses |
(8,161) |
(11,882) |
RéCURRING
OPERATING PROFIT |
(28,366) |
(35,867) |
Extraordinary
income |
3,307 |
1,196 |
Extraordinary
expenses |
(26,461) |
(12,860) |
OPERATING
PROFIT |
(51,520) |
(47,531) |
Interest
income |
26 |
42 |
Interest
expenses |
(6,127) |
(5,834) |
net COST
OF DEBT |
(6,101) |
(5,792) |
Other interest
income |
3,388 |
7,448 |
Other interest
expenses |
(3,881) |
(7,567) |
NET
INTEREST EXPENSES |
(6,594) |
(5,911) |
PRE-TAX
INCOME |
(58,114) |
(53,442) |
Income
tax/credit |
(512) |
(5,560) |
INCOME
FROM ONGOING OPERATIONS |
(58,626) |
(59,002) |
INCOME
FROM DISCONTINUED OPERATIONS (1) |
(7,295) |
(2,997) |
NET
INCOME |
(65,921) |
(61,999) |
Attributable net
income |
(65,926) |
(61,904) |
Of which net
income from ongoing operations |
(58,631) |
(58,907) |
O which net
income from discontinued operations(1) |
(7,295) |
(2,997) |
Non-controlling
interests |
5 |
(95) |
Of which net
income from ongoing operations |
5 |
(95) |
O which net
income from discontinued operations |
|
|
Attributable Net
income per share (in €) |
-1.42€ |
-2.23 € |
Attributable net
income from ongoing operations per share fully diluted (in €) |
-1.42 € |
-2.23 € |
Net income per
share (in €) |
-1.60 € |
-2.12 € |
Net income per
share diluted (in €) |
-1.60€ |
-2.12 € |
Weighted average
number of outstanding shares |
41 249 151 |
27 751 313 |
Weighted average
diluted number of outstanding shares |
41 249 151 |
28 224 513 |
|
|
|
(1) The financial statements (income statement) at December 31,
2018 have been restated for the effects of the application of IFRS
5 - Discontinued operations. BALANCE SHEET
Assets
(in €000) |
31.12.2019 |
31.12.2018 (2) |
Long term
assets |
|
|
Goodwill |
15 039 |
15 036 |
Intangible
assets |
88 031 |
88 622 |
Property, plant
and equipment |
56 180 |
69 451 |
Financial
assets |
2 387 |
2 298 |
Long-term
derivative instruments |
|
58 |
Deferred
taxes |
1 328 |
4 315 |
Total
long-term assets |
162 965 |
179 780 |
Current
assets |
|
|
Inventory |
53 991 |
64 558 |
Trade
receivables |
46 669 |
61 905 |
Tax
receivables |
1 735 |
1 987 |
Other short-term
assets |
32 686 |
29 782 |
Short-term
derivative instruments |
157 |
94 |
Cash and cash
equivalents |
26 193 |
21 832 |
Total
current assets |
161 431 |
180 158 |
Assets held for
disposal |
|
138 |
TOTAL
ASSETS |
324 396 |
360 076 |
Liabilities
(in €000) |
31.12.2019 |
31.12.2018 (2) |
Total
Shareholders’ equity |
93, 737 |
103,347 |
Total
long-term liabilities |
|
|
Employee
benefits |
5,533 |
5,776 |
Long-term
provisions |
3,238 |
705 |
Long-term loans |
9,689 |
11,812 |
Other long-term
liabilities |
1,855 |
1,889 |
Long-term derivative
instruments |
|
201 |
Deferred tax
liabilities |
16,424 |
19,652 |
Total
long-term liabilities |
36,739 |
40,036 |
Current
liabilities |
|
|
Short-term
provisions |
10,178 |
4,053 |
Short-term portion
of long-term debt |
50,933 |
48,897 |
Short-term debt |
12,292 |
30,115 |
Supplier and other
payables |
63,719 |
67,888 |
Tax liabilities |
481 |
811 |
Other short-term
liabilities |
56,315 |
64,48 |
Short-term
derivative instruments |
2 |
580 |
Total
current liabilities |
193,920 |
216,692 |
Liabilities held for
disposal |
|
|
TOTAL
LIABILITIES |
324,396 |
360,076 |
CONSOLIDATED CASH FLOW STATEMENT
(in €000) |
31.12.2019 |
31.12.2018 (2) |
Total
consolidated net profit |
(65,921) |
(61,999) |
Eliminations
: |
|
|
Amortization and
provisions |
31,407 |
8,515 |
Revaluation gains
/ losses (fair value) |
279 |
(90) |
Gains/losses on
disposals and dilution |
8,550 |
(44) |
Operating
cash flow after net cost of debt and tax |
(25,685) |
(53,618) |
Income tax charge
(credit) |
512 |
5,826 |
Net cost of
debt |
6,101 |
6,078 |
Operating
cash flow before net cost of debt and tax |
(19,072) |
(41,713) |
Change in working
capital 1 (inventories, trade receivables and payables) |
19,922 |
3,337 |
Change in working
capital 2 (other items) |
(17,524) |
(20,176) |
Tax paid |
(301) |
1,179 |
Cash flow
from operating activities |
(16,975) |
(57,372) |
Acquisition of
minority interests |
(1,102) |
|
Purchase of
property, plant and equipement and intangible assets |
(9,056) |
(22,488) |
Purchase of
financial assets |
187 |
|
Increase in loans
and advances granted |
(117) |
(312) |
Decrease in loans
and advances granted |
435 |
16,659 |
Disposal of
property, plant and equipement and intangible assets |
2,429 |
5,040 |
Impact of change
in consolidation scope |
(238) |
|
Cash flow
from investing activities |
(7,462) |
(1,101) |
Capital
increase |
58,576 |
51 |
Share
buybacks |
13 |
(306) |
New loans |
235 |
11,885 |
Loans
repayment |
(5,356) |
(6,216) |
Net interest
paid |
(6,877) |
(6,667) |
Net change in
short-term debt |
(17,933) |
22,080 |
Cash Flow
from financing activites |
28,658 |
20,826 |
Impact from
changes in foreign exchange rates |
140 |
(252) |
Change in
cash and cash equivalents |
4,361 |
(37,899) |
Opening cash
position |
21,832 |
59,731 |
Closing cash
position |
26,193 |
21,832 |
Change in
cash and cash equivalents |
4,361 |
(37,899) |
(2) As the Group has opted to apply the simplified retrospective
method, the financial statements at December 31, 2018 have not been
restated for the effects of applying IFRS16.
1 EBITDA = EBIT - provisions for current assets
- depreciation and amortization - pension obligations.
- MBWS_PR_2019FYRESULTS_EN_FV
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