Arcus ASA — Q2 2019 Earnings Presentation
22 slides from Arcus ASA's earnings presentation, Aug 15, 2019
Slide 1: Second quarter results 2019
Second quarter results 2019 Kenneth Hamnes, Group CEO Sigmund Toth, CFO 15 August 2019
Slide 2: Q2: Revenue growth in two of three business segments
Q2: Revenue growth in two of three business segments Amounts in NOK million 2018 2019 Operating Revenues EBITDA (adj.) +3.7% RG +3.9% OG1 2019 EBITDA (adj.) is 59.4 698 82.6 MNOK when excluding 23.2 673 MNOK effect from IFRS16 61.6 Q2 Q2 • Wine: Positive sales trend continued in Q2, but negative imp
Slide 3: Q2: Sixth consecutive quarter with organic growth
Q2: Sixth consecutive quarter with organic growth Organic growth1 overall and by reporting segment Percent Q2 June YTD Arcus ASA 3.9% Arcus ASA 2.4% Wine -0.9% Wine 0.0% Spirits2 14.6% Spirits2 7.1% Distribution 5.4% Distribution 5.0% 1Reported growth adjusted for currency translation effects and st
Slide 4: Q2 Wine: Increased market share in Norway
Q2 Wine: Increased market share in Norway Amounts in NOK million 2018 2019 Operating revenues EBITDA (adj.) EBITDA (adj.) margin (%) -0.9% OG1 436 431 44 44 10.1 10.1 Q2 Q2 Q2 • Norway: Market share continued to grow due to own brand bestsellers and new products • Sweden: Lower sales due to producer
Slide 5: Q2 Spirits: Strong growth in period and YTD
Q2 Spirits: Strong growth in period and YTD Amounts in NOK million 2018 2019 Operating revenues1 EBITDA (adj.) EBITDA (adj.) margin (%) +14.6% OG2 214 21 9.9 195 9.1 18 Q2 Q2 Q2 • Norway, Sweden: Sales at the monopolies grew less than the markets. Somewhat reduced market shares • Denmark: Strong sal
Slide 6: Q2 Distribution: Increased volume and revenue
Q2 Distribution: Increased volume and revenue Amounts in NOK million 2018 2019 Operating revenues EBITDA (adj.) EBITDA (adj.) margin (%) +5.4% OG1 78 82 4 5.5 2 2.5 Q2 Q2 Q2 • Volume increased by 5.2 %, while Vinmonopolet’s total volume was up 4.3 % vs Q2 last year • Volume share of deliveries to Vi
Slide 7: Financial performance
Financial performance Sigmund Toth, CFO 7
Slide 8: Q2 Group P&L: In line with last year when adjusting for IFRS 16
Q2 Group P&L: In line with last year when adjusting for IFRS 16 and other income and expenses Amounts in NOK million Profit and Loss This quarter Year-to-date 2019 IFRS 16 2019 2018 2019 2018 as reported restatement restated1 restated1 Operating revenues 698.0 0 698.0 673.2 1250.1 1230.2 EBITDA (adj
Slide 9: Organic growth slightly offset by negative FX-effect
Organic growth slightly offset by negative FX-effect Q2-19 Operating revenue growth Percent; NOK million +3,7% 698,0 -0,2% +0,0% +3,9% 673,2 Operating revenues Organic growth1 FX Structural Changes Operating revenues Q2-18 Q2-19 1Reported growth adjusted for currency translation effects and structur
Slide 10: Still negative FX effects in Q2, and currently weak (N)SEK vs EUR
Still negative FX effects in Q2, and currently weak (N)SEK vs EUR significantly affects estimated full year FX effects Currency rate effects1 (Q2 2019 actuals vs. Q2 2018 actuals) Currency rate effects1 (2019F currency rate3 vs. 2018 actuals) +1,7% Revenues (MNOK) EBITDA (MNOK) +0,3% Revenues (MNOK)
Slide 11: Cash flow negatively impacted by higher net working capital at end of Q2
Cash flow negatively impacted by higher net working capital at end of Q2, as is normal for the season Q2-19 Cash Flow from Operations1 Increase in net working capital is Amounts in NOK million normal for the season. In addition, with period end on Sunday this year compared to Saturday last year, one
Slide 12: Gearing above target at the end of Q2 due to seasonal effects
Gearing above target at the end of Q2 due to seasonal effects Net Interest Bearing Debt (NIBD) / R12M Adjusted EBITDA by quarter (Excluding IFRS16 effects) 3,0 2,7 2,6 2,5 Target < 2,5x 2,0 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 12
Slide 13: Kenneth Hamnes, Group CEO
Kenneth Hamnes, Group CEO 13
Slide 14: Arcus' brands consistently win international awards
Arcus’ brands consistently win international awards 14
Slide 15: Arcus' brands continuously innovate and adapt
Arcus’ brands continuously innovate and adapt 15
Slide 16: Atlungstad Brenneri – Norway's oldest distillery
Atlungstad Brenneri – Norway’s oldest distillery • Established 1855 • Located at Stange • Guided tours with tastings • Owned by Arcus, but stand- alone operation • Small scale innovation and hand craft center • Ultra premium products Visitors 2016: 5.945 2017: 6.095 2018: 10.774 YTD19: 12.600 16
Slide 17: Make your own aquavit or gin at Arcus
Make your own aquavit or gin at Arcus • Guided tour in the distillery • Make your own aquavit • Make your own gin • Attend wine courses • Unique conference facilities Visit www.destilleriveien.no
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Slide 19: Condensed statement of income
Condensed statement of income MNOK Second quarter Year to date Full Year Note 2019 2018 2019 2018 2018 Sales 2,9 685.5 658.6 1 227.5 1 204.4 2 672.6 Other revenue 2 12.4 14.6 22.6 25.8 50.6 Total operating revenue 2,9 698.0 673.2 1 250.1 1 230.2 2 723.2 Cost of goods -417.4 -398.3 -731.9 -714.0 -1 5
Slide 20: Condensed statement of financial position
Condensed statement of financial position MNOK Second quarter Full Year Note 30.06.2019 30.06.2018 31.12.2018 Intangible assets 6 1 848.5 1 840.4 1 883.9 Tangible assets 5 1 195.6 321.9 315.8 Deferred tax asset 117.7 135.4 110.4 Financial assets 60.4 55.2 63.1 Total fixed assets 3 222.2 2 352.9 2 37
Slide 21: Historic quarterly distribution of top-/bottom-line last three years
Historic quarterly distribution of top-/bottom-line last three years 2016-2018, average 47% Operating revenues Adj. EBITDA 32% 27% 25% 23% 20% 20% 6% Q1 Q2 Q3 Q4 Average 2016 – 2018 Arcus ASA, rounded numbers 21
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