Remy Cointreau Sa · EURONEXT:RCO
Remy Cointreau Sa — Remy Cointreau Sa Ord — H1 2020/21 Earnings Presentation
34 slides from Remy Cointreau Sa's earnings presentation, Nov 26, 2020
Slide 1: 2020/21 First Half Results
2020/21 First Half Results N O V E M B E R 2 6 th, 2 0 2 0
Slide 2: Introduction
Introduction MARC HERIARD-DUBREUIL, PRESIDENT
Slide 3: H1 2020/21 earnings showing resilience despite global pandemic
H1 2020/21 earnings showing resilience despite global pandemic CHANGE Ending September, in €m 2020/21 Reported Organic Sales 430.8 -17.8% -16.4% of which Group Brands 417.5 -18.3% -16.9% Current Operating Profit 106.2 -23.2% -22.5% of which Group Brands 112.2 -24.1% -23.4% Current operating margin 2
Slide 4: Business Review
Business Review E R I C VA L L AT, C H I E F E X E C U T I F O F F I C E R
Slide 5: Good margin resilience
Good margin resilience Sales down 16.4%* amid a global pandemic • Very weak on-trade channel across the world and collapse in global duty free spend, partially offset by strong off-trade consumption in the US and a gradual recovery in China Mainland • Group sales down 4.0%* in Q2 after a 33.2%* decl
Slide 6: Sales Growth by Product Division
Sales Growth by Product Division Cognac Liqueurs & Group Partner Total Spirits Brands Brands Group 5% 0% -5% -10% -15% -20% 6
Slide 7: Breakdown of Group sales
Breakdown of Group sales Total sales: 430.8M€ By Division By Region Liqueurs & Americas Spirits Asia 53% 26% Pacific 27% Partner Brands 3% Europe, Middle Cognac East & Africa 71% 20% 7
Slide 8: Breakdown by region
Breakdown by region Group Brands Cognac Liqueurs & Spirits €305.4M €112.1M Asia Pacific Asia Pacific 33% 12% Americas 51% Americas 57% Europe Middle East & Africa Europe, Middle 10% East & Africa 37% 8
Slide 9: Current Operating Profit
Current Operating Profit Reported decline: -23.2% (€m) Currency Scope Volume/ Price/ A&P Others Mix Mix 138.3 -1.0 0.0 -42.0 +19.5 106.2 -24.3 +15.7 Organic: -22.5% - €31.0m Sept. 19 Sept. 20 COP/Sales: 26.4% COP/Sales: 24.7% 9 (Org: 24.5%)
Slide 10: Net Profit
Net Profit (€m) Net profit excluding non-recurring items Net profit Group share Reported -23.0% Reported -28.1% -23.6% organic change -28.5% organic change 84.6 90.5 65.2 65.0 Sept. 19 Sept. 20 Sept. 19 Sept. 20 10
Slide 11: Cognac
Cognac Organic sales decline of 18.1% (volumes -8.1%) Sales Asia Pacific (in €millions) • Recovery in Mainland China more than offset +15.4%* +11.7%* +2.1% -18.1% by weakness in South East Asia and Travel Retail Asia 450 398.0 • Strong Mid-Autumn Festival 379.6 367.0 359.6 Americas 305.4 • Low-singl
Slide 12: Marketing initiatives: getting stronger during the pandemic crisis
Marketing initiatives Getting stronger during the pandemic crisis Education At home entertainment Leverage e-commerce on product superiority to increase brand relevance 12
Slide 13: Marketing initiatives: investing for the future
Marketing initiatives Investing for the future BUILDING A PROPRIETARY STRENGTHENING NEW BOUTIQUES AND POP UPS E-COMMERCE OFFER OUR CRM 13
Slide 14: Cognac current operating profit
Cognac Current operating profit (€m) Reported decline: -26.3% Currency Scope Volume/ Price/ A&P Others Mix Mix 126.9 -1.5 +0.1 -31.5 -23.2 +15.1 93.6 +7.8 125,4 Organic -25.1% - €31.9m Sept. 19 Sept. 20 COP/Sales: 33.4% COP/Sales: 30.6% (Org: 30.6%) 14
Slide 15: Liqueurs & Spirits
Liqueurs & Spirits Organic sales decline of 13.6% (volumes -18.6%) Cointreau ▪ Slight organic sales decline: robust growth in the US, the UK, Germany, Belgium and Australia was offset by weakness in the rest of Europe, Sales Asia Pacific and Travel Retail (in €millions) Metaxa -4.5%* +0.8%* +4.9% -1
Slide 16: Marketing initiatives: getting stronger during the pandemic crisis
Marketing initiatives Getting stronger during the pandemic crisis Assert our Show agility Leverage e-commerce Cocktail legitimacy To seize opportunities Rémy Cointreau x Drizly: The virtual cocktail studio 16
Slide 17: Marketing initiatives: investing for the future
Marketing initiatives Investing for the future New product launches Investing behind awareness and desirability 17
Slide 18: Liqueurs & Spirits current operating profit
Liqueurs & Spirits Current operating profit (€m) Reported decline: -11.1% Currency Scope Volume/ Price/ A&P Others Mix Mix 21.0 +0.6 -0.1 -10.7 +1.2 18.6 +7.7 -1.1 Organic - 13.4% - €2.8m Sept. 19 Sept. 20 COP/Sales: 16.0% COP/Sales:16.6% (Org: 16.0%) 18
Slide 19: Partner Brands
Partner Brands Organic sales growth of 2.1% (volumes -6.5%) • Growth in H1 was driven by a 26.5% rebound Sales (in €millions) in Q2, helped by the strong performance of key Belgium market during the summer -14.3%* -4.5%* -71.4% +2.1% • Thanks to cost-cutting measures and 48.2 improved value per case
Slide 20: Financial Results
Financial Results L U C A M A R O T TA , C H I E F F I N A N C I A L O F F I C E R
Slide 21: Current Operating Profit
Current Operating Profit CHANGE Ending September, in €m 2020/21 2019/20 Reported Organic Net Sales 430.8 523.9 -17.8% -16.4% Gross Profit 278.6 348.3 -20.0% -19.1% • in % 64.7% 66.5% -1.8pp -2.1pp • Sales and marketing expenses (128.6) (159.2) -19.2% -17.6% • Administrative expenses (43.8) (50.8) -1
Slide 22: Current Operating Margin
Current Operating Margin Reported COP/Sales : -1.7 pts 26.4% -2.1 pts +0.6 pt -0.4 pt +0.2 pt 0.0 pt 24.7% Organic COP/Sales: -1.9 pts Sept. 2019 Gross A&P Distribution/ Currency Scope Sept. 2020 COP/Sales Margin others COP/Sales 22
Slide 23: Net profit
Net profit CHANGE Ending September, €m 2020/21 2019/20 Reported Organic Current Operating Profit 106.2 138.3 -23.2% -22.5% Other operating income (expenses) (0.2) (0.6) - - Operating profit 106.0 137.7 -23.0% -22.1% Net financial income (charge) (8.0) (14.4) - - Pre-tax profit 98.0 123.3 -20.5% -21.
Slide 24: Non-recurring items
Non-recurring items Ending September, €m 2020/21 2019/20 Net profit – Group share 65.0 90.5 Other operating income and expenses 0.2 0.6 Taxes on “Other operating income and expenses” (0.1) (0.2) Net profit (net loss) from discontinued operations 0.0 (6.3) Net profit excluding non-recurring items – G
Slide 25: Net debt/ Cash Flow
Net debt/ Cash Flow Ending September, in €m 2020/21 2019/20 Change Opening net financial debt (1 April) (450.9) (343.3) (107.6) Gross operating profit (EBITDA) 123.8 155.8 (32.0) WCR of eaux-de-vie and spirits in ageing process 23.4 2.5 21.0 Other working capital items (64.5) (77.1) 12.6 Capital exp
Slide 26: Net financial expenses
Net financial expenses Ending September, €m 2020/21 2019/20 Gross debt servicing costs (6.1) (6.3) Net currency gains (losses) (0.6) (2.4) Other financial expenses (net) (1.3) (5.7) Net financial income (charges) (8.0) (14.4) 26
Slide 27: Foreign exchange: hedging impact
Foreign exchange Hedging impact 1.19 1.18 1.16 1.16 1.16 1.17 1.11 1.16 1.14 Hedged rate €/$ 1.12 Average €/$ 1.11 1.10 2016/2017 2017/2018 2018/2019 2019/2020 2019/2020 2020/2021 March March March September March September 27
Slide 28: Foreign exchange: hedging impact
Foreign exchange Hedging impact 2015/ 2016/ 2017/ 2018/ 2019/ 2020/ 16 17 18 19 20 21E Average EUR/USD exchange rate 1.10 1.10 1.17 1.16 1.11 1.16 Average EUR/USD hedged rate 1.23 1.11 1.19 1.18 1.16 1.16 Total sales impact (in €m) 82.7 (5.7) (48.9) 1.5 24.5 (40.0) Total COP impact (in €m) 12.9 23.6
Slide 29: Balance sheet at 30 September 2020
Balance sheet at 30 September 2020 (€m) Sept. in % Sept. in % Sept. in % Sept. in % 2020 2019 2020 2019 Non-current Shareholders’ assets 864 33% 932 36% equity 1,466 56% 1,383 54% Current and Current 1,662 64% 1,523 59% Non-current assets 634 24% 613 24% liabilities o/w inventories 1,379 53% 1,269 4
Slide 30: Key events during the half-year
Key events during the half-year • 30 April 2020 Acquisition of the cognac House J.R. Brillet The House of Rémy Martin integrated around fifty hectares of vineyards located in Grande Champagne and Petite Champagne and will welcome the cognac brand J.R Brillet within its portfolio. Belle de Brillet, w
Slide 31: Post closing events
Post closing events • 16 October 2020 Acquisition of the champagne House J. de Telmont The Rémy Cointreau Group announced the acquisition of a majority stake in Champagne J. de Telmont, including its brands, inventory, production facilities and property assets on its estate as well as vineyards in t
Slide 32: 2020/21 Outlook
2020/21 Outlook E R I C V A L L AT, C H I E F E X E C U T I F O F F I C E R
Slide 33: 2020/21 Outlook
2020/21 Outlook A year of two halves, largely impacted by the Covid-19 pandemic THE REMY COINTREAU GROUP ANTICIPATES: • A strong recovery in H2 2020/21, starting in Q3, largely driven by the US and Greater China • Current Operating Profit to grow organically in the full-year 2020/21 • Currencies and
Slide 34: Q&A
Q&A ©) REMY COINTREAU
Remy Cointreau Sa Ord — H1 2020/21 Earnings Presentation on 6ix