Emperador Inc. · PSE:EMI
Emperador — H1 2020 Earnings Presentation
16 slides from Emperador's earnings presentation, Aug 5, 2020
Slide 1: Emperador, Inc. 1H 2020 Results Briefing
EMPERADOR, INC. 1H 2020 Results Briefing 1
Slide 2: Agenda
Agenda 1 1H 2020 Backdrop 2 1H 2020 Financials 2
Slide 3: Agenda
Agenda 1 1H 2020 Backdrop 2 1H 2020 Financials 3
Slide 4: 1H 2020 Backdrop – Challenges
1H 2020 Backdrop – Challenges Liquor Tax Increase COVID-19 Pandemic • A new liquor tax took • Global lockdown effect January 2020 • Liquor ban and dry law • EDI passed on increase implementation through a price • Closure of restaurants, adjustment in February bars, hotels • Restricted air travel 202
Slide 5: Backdrop – COVID-19 in the Philippines
1H 2020 Backdrop – Challenges COVID-19 in the Philippines • Strict community quarantine beginning March 16 • Implementation of liquor ban • Easing of quarantine beginning May 16; partial lifting of liquor ban • Currently, some areas still under community quarantine and liquor ban 5
Slide 6: Worldwide COVID-19 Pandemic Challenges
1H 2020 Backdrop – Challenges Worldwide COVID-19 Pandemic Challenges Restricted Global Travel Lockdown Liquor ban Closure of on-premise outlets Impacted travel retail sales 10% of Philippine sales Liquor ban in the Philippines 14% W&M Revenues 10% of W&M UK 2 months out of 6 in 1H 45% of Spain 6
Slide 7: Agenda
Agenda 1 1H 2020 Backdrop 2 1H 2020 Financials 7
Slide 8: Highlights
1H 2020 Financials – Highlights Despite the challenges, EMP recorded positive 1H revenue growth YoY +0.4% P 3.3 billion P 21.5 Revenue Growth Net Income* billion 69% Brandy 31% Whisky +15% Revenue Net Income Margin* Revenue Breakdown *Attributable to parent 8
Slide 9: 1H 2020 Financials
1H 2020 Financials Net income in 2Q20 up 24% YoY amid pandemic challenges 2Q20 YoY 1H19 1H20 YoY Commentary Robust international whisky sales offset single- Revenue 10,882 +4% 21,456 21,540 +0.4% digit decline (-4%) in brandy sales despite 2 months hard lockdown Lower blended gross profit margin due
Slide 10: 1H 2020 Financials
1H 2020 Financials Revenues Gross Profit & Margin 34.80% 21,456 21,540 33.20% 35.30% +0% 33.40% 7,323 6,987 -5% 10,431 10,882 +4% 3,635 3,578 -2% 2Q19 2Q20 1H19 1H20 2Q19 2Q20 1H19 1H20 EBITDA & Margin Net Income & Margin 22.10% 22.40% 15.10% 15.40% 24.00% 17.20% 4,731 4,827 14.50% 3,250 3,327 21.00
Slide 11: 1H 2020 Financials – Segment Breakdown
1H 2020 Financials – Segment Breakdown Net income segment breakdown unchanged with brandy delivering about 70% of net earnings Revenues Gross Profit EBITDA Net Income 1H19 1H20 1H19 1H20 1H19 1H20 1H19 1H20 15,349 14,901 4,786 4,755 3,452 3,465 2,253 2,310 Brandy (72%) (69%) (65%) (68%) (73%) (72%)
Slide 12: 1H 2020 Financials – Brandy Segment
1H 2020 Financials – Brandy Segment Net income sustained in 2Q20 YoY despite liquor ban across the Philippines 2Q20 YoY 1H19 1H20 YoY Commentary Only -4% down in spite of liquor ban across Revenue 7,321 -4% 15,349 14,901 -3% the Philippines Gross Profit 2,390 4,786 4,755 Gross profit dropped but mar
Slide 13: 1H 2020 Financials – Whisky Segment
1H 2020 Financials – Whisky Segment Net income doubled YoY in 2Q20 despite closure of on-trade channels and travel retail 2Q20 YoY 1H19 1H20 YoY Commentary £41.4 37% £90.4 £103.9 15% Sales growth driven by UK, USA, China, Revenue 3,561 29% 6,107 6,639 9% USA, Russia, Sweden Gross Profit 1,187 2,537
Slide 14: 1H 2020 Financials – Cash Position
1H 2020 Financials – Cash Position EMP improves net debt position Net Net Cash Debt Debt to Commentary Debt Equity Lower net debt to equity due to 1H20 6,153 32,945 26,793 41% reduction in equity-linked securities (ELS) to P3.4b from P5.2b previously with the conversion of 2019 7,741 37,220 29,479 4
Slide 15: 2Q 2020 Solid Performance
2Q 2020 Solid Performance “ EMP delivered solid revenue and net income (+24% YoY) in 2Q 2020 despite lockdowns, liquor bans, closure of on-trade sales channels and restricted travel retail 15
Slide 16: 2Q 2020 Delivered Better Than Expected Results
2Q 2020 Delivered Better Than Expected Results Underlying corporate strengths allow EMP to rise to the crisis Ability Brand Cost to Execute Strength Management • Quick response • Brands are sought • Optimize cost • Risk mitigation after by consumers • Rationalize • Optimize areas of • Exhibiting str