Remy Cointreau SA · EURONEXT:RCO
Remy Cointreau SA — FY2016-17 Earnings Presentation
41 slides from Remy Cointreau SA's earnings presentation, Jun 8, 2017
Slide 1: Full-year results 2016-17
Full-year results 2016-17 (year ended 31 March 2017) 8 June 2017
Slide 2: Introduction
Introduction FRANÇOIS HÉRIARD DUBREUIL PRESIDENT 2
Slide 3: 3
3
Slide 4: Key figures (as of 31 March 2017)
Key figures (as of 31 March 2017) Change Reported Organic • Sales €1,094.9m +4.2% +4.7% • of which Group Brands €983.8m +6.7% +7.4% • Current operating profit €226.1m +26.7% +13.8% • Current operating margin 20.7% +3.7pts +1.5pts • Net profit (Group share) €190.3m +85.7% +73.5% • Net profit (excludi
Slide 5: Business review
Business review VALÉRIE CHAPOULAUD-FLOQUET CHIEF EXECUTIVE OFFICER 5
Slide 6: Excellent annual performance
Excellent annual performance Group Brands sales up 7.4% in organic terms (+6.7% on a reported basis): • The House of Rémy Martin (+10.0%) benefitted from its focus on its high-end products • Excellent performance in the Americas region (United States, Canada) • Clear acceleration in the Asia-Pacific
Slide 7: Group sales
Group sales €m 2015/16 Organic Currency 2016/17 Reported growth: +4.2% 1,094.9 1,050.7 +4.7% -0.5% 7
Slide 8: Sales growth by product division
Sales growth by product division Rémy Martin Liqueurs & Group Partner Group Spirits Brands Brands Total 15,0% +10.0% +7.4% 10,0% +4.7% 5,0% +1.3% 0,0% -5,0% -10,0% -15,0% -14.2% -20,0% 8
Slide 9: Breakdown of Group Sales (1)
Breakdown of Group Sales (1) By Division by Region €1,094.9m Americas Liqueurs & Partner 40% (+2pts) Spirits Brands 25% (-1pt) 10% (-2pts) Europe/ Asia M. East/ Pacific Africa 29% (+1pt) 31% (-3pts) Rémy Martin 65% (+3pts) 9
Slide 10: Breakdown of Group Sales (2)
Breakdown of Group Sales (2) Rémy Martin Liqueurs & Spirits €707.5m €276.3m Americas Americas 44% (+2pts) 40% (+1pt) Asia Europe/ Asia Europe/ Pacific M. East/ Pacific M. East/ 10% (=) Africa 39% (-1pt) Africa 50% (-1pt) 17% (-1pt) 10
Slide 11: Current Operating Profit
Current Operating Profit Reported growth: +26.7% (€m) Currency Scope Volume/ Price/ A&P Others Mix Mix +44.3 +7.1 -10.6 -16.1 226.1 +23.6 -0.6 178.4 Organic +13.8% + €24.7m March 16 March 17 COP/Sales: 17.0% COP/Sales : 20.7% (Org: 18.5%) 11
Slide 12: Net profit
Net profit (€m) Net profit excluding non-recurring items Net profit Group share Reported +22.3% Reported +85.7% +10.5% organic change +73.5% organic change 190.3 135.0 110.4 102.4 March 16 March 17 March 16 March 17 12
Slide 13: House of Rémy Martin
House of Rémy Martin • Organic sales growth of 10.0% (volumes +4.5%) • Excellent performance in the United States Sales (in €millions) • Greater China: sharp acceleration in private -20.8%* -1.9%* +3.2%* +10.0%* consumption in the second half of the year, 707.5 750 647.8 particularly in high-end qua
Slide 14: Rémy Martin: marketing initiatives
Rémy Martin: marketing initiatives Limited edition New Rémy Martin XO decanter Pop-up store at Paris CDG Carte Blanche à Baptiste Loiseau 14
Slide 15: LOUIS XIII: marketing initiatives
LOUIS XIII: marketing initiatives LOUIS XIII Le Mathusalem Opening of the first LOUIS XIII boutique in Beijing LOUIS XIII Miniature edition Pop-up boutique at Harrod’s in London 15
Slide 16: House of Rémy Martin
House of Rémy Martin Current operating profit (€m) Reported growth: +32.6% Currency Volume/ Price/ Others A&P Mix Mix +8.2 -9.9 +44.5 -15.0 185.2 +17.7 139.7 Organic +19.9% + €27.8m March 16 March 17 COP/Sales: 21.6% COP/Sales: 26.2% (Org: 23.5%)16
Slide 17: Liqueurs & Spirits
Liqueurs & Spirits • Organic sales growth of 1.3% (volumes +0.1%) Cointreau Sales (in €millions) • Solid year, underpinned by the main markets (United States and France), and promising +3.3%* +7.2%* -1.5%* +1.3%* emerging markets (Greater China et Russia) 350 276.3 273.9 Metaxa 300 240.4 262.9 • Exc
Slide 18: Liqueurs & Spirits: marketing initiatives
Liqueurs & Spirits: marketing initiatives Cointreau #1Orange1Tree: New packaging design for Tree reforestation project in Senegal METAXA 12 Stars 18
Slide 19: Acquisition of Single Malt whiskies
Acquisition of 2 Single Malt whiskies Acquisition of Domaine des Hautes Glaces and Westland Distillery 19
Slide 20: Liqueurs & Spirits
Liqueurs & Spirits Current operating profit (€m) Reported growth: +19.9% Currency Scope Volume/ Price/ A&P Others Mix Mix +5.2 -1.1 -1.3 +1.8 57.5 +5.5 -0.6 48.0 Organic +9.7% + €4.6m March 16 March 17 COP/Sales: 17.5% COP/Sales: 20.8% (Org: 19.0%) 20
Slide 21: Partner Brands
Partner Brands • Organic sales decline of 14.2% (volumes -0.9%) • End of the distribution agreement for the Sales (in €millions) Piper-Heidsieck and Charles Heidsieck champagne brands in France, Belgium and +6.1%* -0.6%* -8.1%* -14.2%* 300 Travel retail 240.0 • Strong momentum of other partner brand
Slide 22: Partner Brands
Partner Brands • Current Operating Profit: €2.0m (-72.4% in organic terms) • Decline in current operating profit linked to ROC (in €millions) the change in the portfolio of Partner Brands +123.7%* -22.9%* -72.4%* +41.2%* during the Financial Year 10,0 9.0 8,0 7.3 6.1 6,0 4,0 2.0 2,0 0,0 March March
Slide 23: Financial results
Financial results LUCA MAROTTA CHIEF FINANCIAL OFFICER 23
Slide 24: Current Operating Profit
Current Operating Profit Reported Organic (€m) 2016 2017 change change Sales 1,050.7 1,094.9 4.2% 4.7% Gross profit 665.8 730.7 9.7% 6.9% in % 63.4% 66.7% +3.3pts +1.3pts Sales and marketing expenses (406.7) (416.7) 2.5% 3.3% Administrative expenses (81.6) (88.5) 8.4% 8.8% Other income and expenses
Slide 25: Current operating margin
Current operating margin Reported COP/Sales: +3.7pts +2.3pts -0.1pt 20.7% +1.3pts +0.1pt +0.1pt 17.0% Organic COP/Sales: +1.5 pts 2015-16 Gross A&P Distribution/ Currency Scope 2016-17 COP/Sales Profits others COP/Sales 25
Slide 26: Net profit
Net profit (€m) 2016 2017 Current Operating Profit 178.4 226.1 Other operating income (expenses) 0.3 (4.8) Operating profit 178.7 221.3 Net financial income (charge) (27.3) (31.9) Pre-tax profit 151.4 189.4 Taxes (44.1) (44.5) Tax rate 29.1% 23.5% Share profit (loss) of associated companies and Mino
Slide 27: Non-recurring items
Non-recurring items (€m) 2016 2017 Net profit – Group share 102.4 190.3 Provision for impairment on Dynasty Fine Wines Group shares 3.7 18.8 Provision for reorganisation of the distribution network 2.4 3.7 Deferred Tax Liability (tax rate in France at 28.9% versus 34.4%) - (14.1) Net profit/(loss) f
Slide 28: Net debt/Cash flow
Net debt/Cash flow (M€) 2016 2017 Change Opening net financial debt (1 April) (466.6) (458.2) 8.4 Gross operating profit (EBITDA) 199.6 248.6 49.0 WCR of eaux-de-vie and spirits in ageing process (42.6) (33.6) 9.0 Other working capital items 0.0 (5.5) (5.5) Capital expenditure (30.8) (36.9) (6.1) Fi
Slide 29: Net financial expenses
Net financial expenses (€m) 2016 2017 Gross debt servicing costs (24.1) (21.5) Investment income 0.1 0.0 Sub-total (24.0) (21.4) Net currency gains (losses) 0.8 (5.4) Other financial expenses (net) (4.1) (5.1) Net financial income (charges) (27.3) (31.9) 29
Slide 30: Foreign exchange: hedging impact
Foreign exchange: hedging impact 1.34 Average €/$ 1.30 Hedged rate €/$ 1.31 1.23 1.27 1.11 1.10 1.10 2013/2014 2014/2015 2015/2016 2016/2017 March March March March 30
Slide 31: Balance sheet at 31 March 2017
Balance sheet at 31 March 2017 Assets Liabilities (€m) March in % March in % March in % March in % 2016 2017 2016 2017 Non- Shareholders’ 875 38% 983 40% 1,113 49% 1,304 53% current equity assets Current 1,360 60% 1,381 57% Current and assets Non-current 664 29% 670 28% liabilities o/w inventories 1
Slide 32: ROCE
ROCE 34.8% 30.1% 21.3% 21.2% 16.8% 17.3% 14.6% 6.5% Rémy Martin Liqueurs & Partner Group Spirits Brands 2016 2017 32 33
Slide 33: Changes in capital employed
Changes in capital employed Rémy Martin Liqueurs & Partner (€m) (+4.6%) Spirits Brands (+3.6%) (-26.1%) +38.4 +5.7 -11.0 1,064.7 1,031.5 + € 33.2m +3.2% March-16 Rémy Martin Liqueurs & Spirits Partner Brands March-17 33 33 34
Slide 34: Key events during the year (1 / 2)
Key events during the year (1 / 2) • 14 June 2016 Vigeo Eiris prize: 2016 Top Performers award ‘Responsible supply chain management: sustainable supplier relations’ • 31 August 2016 Exit from Lixir joint-venture in France • 1 September 2016 Distribution agreement with Bollinger Distribution in the F
Slide 35: Key events during the year (2 / 2)
Key events during the year (2 / 2) • 3 January 2017 The Progressive Hebridean Distillers are now also distributed by Bollinger Diffusion in France • 5 January 2017 Acquisition of Domaine des Hautes Glaces which crafts a range of Single Malt whiskies made in the French Alps • 6 January 2017 Acquisiti
Slide 36: Post-year events
Post-year events • 25 July 2017 A dividend of 1.65 euro per share, with an option in cash or in shares (for the entire dividend distributed), will be proposed at the shareholders’ vote during the 25 July 2017 general assembly In € 2012/13 2013/14 2014/15 2015/16 2016/17 Dividend 1,40 1,27 1,53 1,60
Slide 37: CSR: First year of our 2020 Plan
CSR: First year of our 2020 Plan The Group’s policy and commitments: • Aligning our CSR objectives with the United Nations’ Sustainable Development Goals (SDG) • Presidency of the Global Compact Advanced French club • Creation of the Rémy Cointreau Foundation Environmental responsibility: • Increase
Slide 38: 2019-20 full-year outlook (1)
2019-20 full-year outlook (1) Exceptional Spirits (>USD50) to account for 60-65% of the Group’s sales in 2019-20 45% 49% 51% 60-65% >USD50 <USD50 55% 51% 49% 35-40% 2014-15 2015-16 2016-17 2019-20E 38
Slide 39: 2019-20 full-year outlook (2)
2019-20 full-year outlook (2) New target for the Current Operating Margin in 2019-2010 : 21.5 - 22.5% (vs. 18.0% - 20.0%) Organic increase 2015-2020: +3.2-4.2 pts (vs. +1.8-3.8pts) Initial target 2019/20 (June 2015) New target 2019-20 (June 2017) Based on a USD/EUR rate of 1.30 Based on a USD/EUR ra
Slide 40: 2017-18 full-year outlook
2017-18 full-year outlook • Due to its unique business model and its portfolio of exceptional spirits, the Rémy Cointreau Group pursues its long-term strategy of focusing on its high-end products, founded on the excellence of terroirs, the mastery of savoir-faire and the importance of time • For 201
Slide 41: Questions & Answers
Questions & Answers 41