Arcus ASA — Q2 2020 Earnings Presentation
21 slides from Arcus ASA's earnings presentation, Aug 18, 2020
Slide 1: Second quarter results 2020
Second quarter results 2020 Kenneth Hamnes, Group CEO Sigmund Toth, CFO 18 August 2020
Slide 2: Q2: Best second quarter in Arcus' history
Q2: Best second quarter in Arcus’ history Amounts in NOK million 2019 2020 Operating Revenues EBITDA (adj.) +9.9% RG +1.2% OG1 767 119.3 698 82.6 Q2 Q2 • Wine: Strong growth, especially in Norway • Spirits: Growth in all monopoly markets • Logistics: Increased revenues, driven by higher sales to Vin
Slide 3: Q2: Organic growth significantly impacted by COVID-19
Q2: Organic growth significantly impacted by COVID-19 Organic growth1 overall and by reporting segment Percent Q2 June YTD Arcus ASA 1.2% Arcus ASA 3.9% Wine 4.4% Wine 5.4% Spirits2 -8.5% Spirits2 -1.7% Logistics 10.8% Logistics 11.9% 1Reported growth adjusted for currency translation effects and st
Slide 4: Q2 Wine: Strong growth, flat indirect costs
Q2 Wine: Strong growth, flat indirect costs Amounts in NOK million 2019 2020 Operating revenues EBITDA (adj.) EBITDA (adj.) margin (%) 4.4% OG1 497 66.6 13.4 431 10.1 43.5 Q2 Q2 Q2 • Norway: Revenue growth of 53.3 %, 11th quarter in a row with increased market share • Sweden: Revenues excluding lost
Slide 5: Q2 Spirits: Strong growth in EBITDA
Q2 Spirits: Strong growth in EBITDA Amounts in NOK million 2019 2020 Operating revenues1 EBITDA (adj.) EBITDA (adj.) margin (%) -8.5% OG2 237 30.5 12.9 214 9.9 21.1 Q2 Q2 Q2 • Norway, Sweden, Finland: Revenue increased in the double digits. Reduced market share in Norway • Denmark: Decreased revenue
Slide 6: Q2 Logistics: Strong revenue and EBITDA growth
Q2 Logistics: Strong revenue and EBITDA growth Amounts in NOK million 2019 2020 Operating revenues EBITDA (adj.) EBITDA (adj.) margin (%) +10.8% OG1 91 82 4.9 5.4 2.1 2.5 Q2 Q2 Q2 • Distributed volume in Q2 was 17.1 million liters, an increase of 4.0 million liters from Q2 last year • Sales to Vinmo
Slide 7: Financial performance
Financial performance Sigmund Toth, CFO 7
Slide 8: Q2 Group P&L: EBITDA significantly higher than last year
Q2 Group P&L: EBITDA significantly higher than last year Amounts in NOK million Profit and Loss This quarter Year-to-date 2020 2019 2020 2019 Operating revenues 767.2 698.0 1 378.3 1 250.1 EBITDA (adj.) 119.3 82.6 185.9 128.7 Depreciation, Amortization and Write- downs -31.5 -26.5 -62.9 -53.2 EBIT (
Slide 9: Organic growth, FX-effect and structural changes increased operating revenues
Organic growth, significant positive FX-effect and structural changes all contributed to increased operating revenues Q2-20 Operating revenue growth Percent; NOK million +9,9% 767 +1,0% +7,7% 698 1,2% Operating revenues Organic growth1 FX Structural Changes Operating revenues Q2-19 Q2-20 1Reported g
Slide 10: Stronger SEK and EUR vs NOK results in positive FX-effect on revenues
Stronger SEK and EUR vs NOK results in positive FX-effect on revenues, less negative effect on EBITDA with SEK vs EUR in line with last year Currency rate effects1 (Q2 2020 actuals vs. Q2 2019 actuals) Currency rate effects1 (2020F currency rate3 vs. 2019 actuals) +13,6% Revenues (MNOK) EBITDA (MNOK
Slide 11: Cash flow above last year due to increased EBITDA and lower net working capital
Cash flow above last year due to increased EBITDA and significant reduction in net working capital Q2-20 Cash Flow from Operations Amounts in NOK million Net working capital decreased as accounts -10 -1 518 payables, alcohol tax and -11 VAT were fueled by the significant sales growth, but without th
Slide 12: Kenneth Hamnes, Group CEO
Kenneth Hamnes, Group CEO | woRDIC ony ee AGERME
Slide 13: Short-term changes, overall consumption likely stable
Short-term changes, overall consumption likely stable Shopping patterns: Consumer occacions: Monopolies grow In-home and staycation Product mix: Brand choices: Wine outgrows spirits Familiar brands win 13
Slide 14: Bag-in-Box: Significantly higher sales during COVID-19
Bag-in-Box: Significantly higher sales during COVID-19 Arcus’ year-to-date sales of Bag-in-Box at Vinmonopolet vs. same period last year Liters million 14
Slide 15: Examples Norway: More green packaging on best-sellers and tender wins
Examples Norway: More green packaging on best-sellers and tender wins 15
Slide 16: Q2: Concluding remarks
Q2: Concluding remarks Best Q2 result in Arcus’ history, both in terms of revenue and EBITDA Strong COVID-19 effects as most tax-free and border-trade sales moved to monopoly stores across Nordics Very high demand handled well by a strong and flexible organization, supportive suppliers/partners and
Slide 17: Q&A
Q&A Financial calendar, 2020 18 August Quarterly report Q2 6 November Quarterly report Q3 17
Slide 18: Condensed statement of income
Condensed statement of income CONDENSED STATEMENT OF INCOME MNOK Second quarter Year to date Full Year Note 2020 2019 2020 2019 2019 Sales 2,9 759,0 685,5 1 354,1 1 227,5 2 710,4 Other revenue 2 8,1 12,4 24,2 22,6 52,4 Total operating revenue 2,9 767,2 698,0 1 378,3 1 250,1 2 762,8 Cost of goods -45
Slide 19: Condensed statement of financial position
Condensed statement of financial position CONDENSED STATEMENT OF FINANCIAL POSITION MNOK Second quarter Full Year Note 30.06.2020 30.06.2019 31.12.2019 Intangible assets 6 2 023,6 1 848,5 1 923,2 Tangible assets 5 1 402,1 1 195,6 1 431,2 Deferred tax asset 72,1 117,7 86,1 Financial assets 69,0 60,4
Slide 20: Historic quarterly distribution of top-/bottom-line last four years
Historic quarterly distribution of top-/bottom-line last four years 2016-2019, average 46% Operating revenues Adj. EBITDA 32% 25% 26% 24% 20% 20% 8% Q1 Q2 Q3 Q4 Average 2016 – 2019 Arcus ASA, rounded numbers 20
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