Remy Cointreau Sa · EURONEXT:RCO
Remy Cointreau Sa — H1 2019/20 Earnings Presentation
33 slides from Remy Cointreau Sa's earnings presentation, Nov 28, 2019
Slide 1: First Half Results 2019/20
First Half Results 2019/20 (ended 30 September 2019) 28.11.19
Slide 2: Introduction
Introduction MARC HERIARD DUBREUIL PRESIDENT 28.11.19 2
Slide 3: Key figures (as of 30 September 2019)
Key figures (as of 30 September 2019) Change Reported Reported Organic* • Sales €523.9m -0.6% -3.6% • of which Group Brands €510.8m +6.1% +2.8% • Current Operating Profit €138.3m +0.0% -4.7% • of which Group Brands €147.9m +5.5% +0.8% • Current operating margin 26.4% +0.2pt -0.3pt • Net profit (Grou
Slide 4: Business review
Business review VALERIE CHAPOULAUD-FLOQUET CHIEF EXECUTIVE OFFICER 28.11.19 4
Slide 5: Good margin resilience
Good margin resilience Group Brands sales (+2.8%*) mitigated by situational factors • Solid performance of Liqueurs & Spirits (+4.9%*) • Slower performance of the cognac division (+2.1%*), due to the HK unrest and slower replenishment in the US Accelerated decline in Partner Brands revenues • Volunt
Slide 6: Group sales
Group sales -3.6% CO J H1 2018/19 Organic Currencies 28.11.19 ) REMY COINTREAU H1 2019/20
Slide 7: Organic sales growth by division
Organic sales growth by division 8% 3% -2% -7% (+2.3% excluding technical factors) -12% -17% -22% -27% -32% (-2.8% excluding 28.11.19 technical factors) 7
Slide 8: Breakdown of Group sales
Breakdown of Group sales By Division By Region €523.9m Partner Americas Liqueurs & Brands 45% (+2pts) Spirits 3% (-6pts) 25% (+2pts) Europe/ Asia M. East/ Pacific Africa House of 31% (+1pt) 24% (-3pts) Rémy Martin 72% (+4pts) 28.11.19 8
Slide 9: Breakdown of Group sales
Breakdown of Group sales Group Brands House of Rémy Martin Liqueurs & Spirits €379.6m €131.2m Americas Americas 46% (-1pt) 46% (+5pts) Asia Asia Europe/ Pacific Europe/ Pacific M. East/ M. East/ 13% (-1pt) 38% (-1pt) Africa Africa 16% (+2pts) 41% (-4pts) 28.11.19 9
Slide 10: Current Operating Profit
Current Operating Profit Reported growth: +0.0% (€m) Currency Scope Volume/ Price / A&P Others Mix Mix +30.9 -7.5 +6.5 0.0 -20.6 -9.3 138.2 138.3 Organic -4.7% 144,7 - €6.5m Sept. 18 Sept. 19 COP/Sales : 26.2% COP/Sales : 26.4% (Org: 25.9%) 28.11.19 10
Slide 11: Net profit
Net profit (€m) Net profit excluding non-recurring items Net profit Group share Reported -5.6% Reported +3.5% -8.2% organic change +0.8% organic change 89.6 87.5 90.5 84.6 87.5 85.4 Sept. 18 Sept. 19 Sept. 18 Sept. 19 28.11.19 11
Slide 12: House of Rémy Martin
House of Rémy Martin • Organic sales growth of 2.1% (volumes -5.0%) Asia Pacific Sales (in €millions) • Ongoing strength in China (excellent MAF) +5.1%* +15.4%* +11.7%* +2.1%* mitigated by declining sales in Travel Retail 450 398.0 Asia (HK unrest) 367.0 359.6 379.6 322.5 Americas 300 • Modest growt
Slide 13: Rémy Martin: a new global campaign
Rémy Martin: a new global campaign Launch of Rémy Martin “Tercet” New global campaign: Team Up for Excellence 28.11.19 13
Slide 14: LOUIS XIII
LOUIS XIII LOUIS XIII limited edition: LOUIS XIII pop-up store in Changi airport (Singapore) Black Pearl André Hériard Dubreuil 28.11.19 14
Slide 15: House of Rémy Martin
House of Rémy Martin Current operating profit (€m) Reported growth: +6.2% Currency Scope Volume/ Price / A&P Others Mix Mix +26.4 -3.4 -7.6 +6.3 0.0 -14.4 126.9 119.5 Organic +0.9% 125,8 + €1.1m Sept. 18 Sept. 19 COP/Sales : 33.2% COP/Sales : 33.4% (Org: 32.8%) 28.11.19 15
Slide 16: Liqueurs & Spirits
Liqueurs & Spirits • Organic sales growth of 4.9% (volumes +1.8%) Cointreau • Strong start to the year, led by double-digit growth in Sales (in €millions) the Americas +5.1%* -4.5%* +0.8%* +4.9%* Metaxa 150 134.8 • Good performance in Asia/Americas (new markets) 129.2 127.1 131.2 121.9 • Weakness in
Slide 17: Liqueurs & Spirits
Liqueurs & Spirits Cointreau: Limited Edition with Metaxa continues its international expansion French designer Vincent Darré in partnership with the Clumsies Bar Octomore reaches its 10th series 28.11.19 17
Slide 18: Liqueurs & Spirits
Liqueurs & Spirits Current operating profit (€m) Reported growth: +1.6% Currency Scope Volume/ Price / A&P Others Mix Mix +4.5 -3.9 20.6 +0.3 0.0 -0.2 -0.3 21.0 Organic +0.3% + €0.1m Sept. 18 Sept. 19 COP/Sales : 16.9% COP/Sales : 16.0% (Org: 16.2%) 28.11.19 18
Slide 19: Partner Brands
Partner Brands • Organic sales decline of 71.4% (volumes -74.1%) Sales (in €millions) • Accelerated withdrawal from Partner Brands’ distribution contracts -3.1%* -14.3%* -4.5%* -71.4%* 80 • In H1 2019/20, termination of the Partner Brands distributed in Czech Republic/ 60 56.0 Slovakia and Piper Son
Slide 20: Financial results
Financial results LUCA MAROTTA CHIEF FINANCIAL OFFICER 28.11.19 20
Slide 21: Current Operating Profit
Current Operating Profit Reported Organic (€m) Sept. 2019 Sept. 2018 change change Net Sales 523.9 527.0 -0.6% -3.6% Gross Profit 348.3 329.1 +5.8% +2.5% in % 66.5% 62.5% +4.0pts +3.9pts Sales and marketing expenses (159.0) (147.9) +7.5% +4.7% Administrative expenses (50.8) (43.0) +18.1% +17.8% Othe
Slide 22: Current Operating Margin
Current Operating Margin Reported COP/Sales : +0.2 pt +3.9 pts -1.9 pts -2.3 pts +0.5 pt 0.0 pt 26.4% 26.2% Organic COP/Sales: -0.3 pt Sept. 2018 Gross A&P Distribution/ Currency Scope Sept. 2019 COP/Sales Margin others COP/Sales 28.11.19 22
Slide 23: Net profit
Net profit (€m) Sept. 2019 Sept. 2018 Current Operating Profit 138.3 138.2 Other operating income (expenses) (0.6) 2.0 Operating profit 137.7 140.3 Net financial income (charge) (14.4) (16.7) Pre-tax profit 123.3 123.6 Taxes (39.1) (36.1) Tax rate 31.7% 29.2% Share profit (loss) of associates and mi
Slide 24: Non-recurring items
Non-recurring items (€m) Sept. 2019 Sept. 2018 Net profit – Group share 90.5 87.5 Other operating income and expenses 0.6 (2.0) Expense on vendor loan (financial charge) - 5.2 Taxes on “Other operating income and expenses” and associated with (0.2) (1.1) expense on vendor loan Net profit (net loss)
Slide 25: Net debt/Cash flow
Net debt/Cash flow (€m) Sept. 2019 Sept. 2018 Change Opening net financial debt (1 April) (343.3) (282.8) (60.5) Gross operating profit (EBITDA) 155.8 154.8 1.0 WCR of eaux-de-vie and spirits in ageing process 2.5 (28.6) 31.1 Other working capital items (77.1) (163.1) 86.0 Capital expenditure (26.1)
Slide 26: Net financial expenses
Net financial expenses (€m) Sept. 2019 Sept. 2018 Gross debt servicing costs (6.3) (7.2) Net currency gains (losses) (2.4) 0.6 Other financial expenses (net) (5.7) (10.1) - o/w accrued interest and expense on vendor loan - (5.2) Net financial income (charges) (14.4) (16.7) 28.11.19 26
Slide 27: Foreign exchange: hedging impact
Foreign exchange: hedging impact 1.19 1.19 1.18 1.16 1.18 1.17 1.16 Hedged rate €/$ 1.11 Average rate €/$ 1.12 1.10 2016/2017 2017/2018 2018/2019 2018/2019 2019/2020 March March Sept. March Sept. 28.11.19 27
Slide 28: Currency impact on Sales and COP
Currency impact on Sales and COP ➢ 2019/20 guidance: + €25-30m on sales (vs. - €20m previously) and + €9-10m on COP (vs. €0.0m prev.) 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20E Average EUR/USD exchange rate 1.27 1.10 1.10 1.17 1.16 1.11 Average EUR/USD hedged rate 1.30 1.23 1.11 1.19 1.18 1.16
Slide 29: Balance sheet at 30 September 2019
Balance sheet at 30 September 2019 Assets Liabilities (€m) Sept in % Sept in % Sept in % Sept in % 2019 2018 2019 2018 Non- Shareholders’ 932 36% 914 36% 1 383 54% 1 455 57% current equity assets Current 1 523 59% 1 494 58% Current and assets Non-current 613 24% 621 24% liabilities o/w inventories 1
Slide 30: Key events during the half-year
Key events during the half-year • 1 April 2019 Disposal of the Group’s distribution subsidiaries in the Czech Republic and Slovakia to Jägermeister. Concurrently with this sale, the Group signed an agreement with Mast-Jägermeister SE for the distribution, by the latter, of Rémy Cointreau’s spirits i
Slide 31: Post-closing events
Post-closing events • 15 October 2019 Rémy Cointreau was ranked 1st by Gaia Rating, EthiFinance’s ESG rating agency, which measures the most performing European mid-cap companies (with turnover > €500m) with regards to Corporate, Social and Environmental Responsibility. • 26 Nov. 2019 Rémy Cointreau
Slide 32: FY2019/20 and mid-term outlook
FY2019/20 and mid-term outlook FY2019/20 outlook: Against the backdrop of H1 earnings and an uncertain geopolitical environment, Rémy Cointreau expects: • Slight organic growth in Group Brands’ Current Operating Profit, fueled by solid gross margin gains • Stable Current Operating Profit for the Gro
Slide 33: REMY COINTREAU
REMY COINTREAU Tie ok | 33 Sane 7 RR = Gaba Ye UMUine Ae, | om: “, em Ochdamb-mir | VeIUmMone AOI Bihovos | 28.11.19