Remy Cointreau SA · EURONEXT:RCO
Remy Cointreau SA — FY2017/18 Earnings Presentation
43 slides from Remy Cointreau SA's earnings presentation, Jun 7, 2018
Slide 1: Full-Year Results 2017/18
Full-Year Results 2017/18 (year ended 31 March 2018) 7 June 2018
Slide 2: Introduction
Introduction MARC HÉRIARD DUBREUIL PRESIDENT Annual results as of 31 March 2018 2
Slide 3: Our ambition: Leader of Exceptional Spirits
Our ambition : Leader of Exceptional Spirits 260 USD50+ spirits segment 240 CAGR2008-2017: +10% 220 200 Index 100 in 2008 180 160 140 Total international spirits 120 CAGR2008-2017: +5% 100 80 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total international spirits market USD50+ segment Source:
Slide 4: Key figures (as of 31 March 2018)
Key figures (as of 31 March 2018) Change Reported Organic • Sales €1,127.0m +2.9% +7.2% • of which Group Brands €1,026.8m +4.4% +9.2% • Current operating profit €236.8m +4.7% +14.1% • Current operating margin 21.0% +0.3pt +1.3pts • Net profit (Group share) €148.2m -22.1% -15.0% • Net profit (excludi
Slide 5: Business review
Business review VALÉRIE CHAPOULAUD-FLOQUET CHIEF EXECUTIVE OFFICER Annual results as of 31 March 2018 5
Slide 6: Excellent annual performance
Excellent annual performance Group Brands sales up 9.2% in organic terms (+4.4% on a reported basis): • The House of Rémy Martin (+13.2%) fully benefitted from its brand elevation strategy • Clear acceleration in the Asia-Pacific region (Greater China, Japan, Singapore) • Remarkable performance of t
Slide 7: CSR: In line with our Plan 2020
CSR: In line with our Plan 2020 Terroirs…(for sustainable agriculture) • Widely engaged with our AFC partners in AHVE certification (64% of land, objective is 100% in 2020) • Rémy Martin Centaurs of the Environment in Cognac (under the aegis of the Minister of Agriculture) …People… (social and socie
Slide 8: Group sales
Group sales €m 2016/17 Organic Currency Perimeter 2017/18 Reported growth: +2.9% 1,094.9 1,127.0 +7.2% -4.5% +0.2% Annual results as of 31 March 2018 8
Slide 9: Sales growth by product division
Sales growth by product division Rémy Martin Liqueurs & Group Partner Group Spirits Brands Brands Total +13.2% 15,0% +9.2% 10,0% +7.2% 5,0% -1.0% 0,0% -5,0% -10,0% -10.4% -15,0% -20,0% Annual results as of 31 March 2018 9
Slide 10: Breakdown of Group Sales (1)
Breakdown of Group Sales (1) By Division by Region €1,127.0m Americas Liqueurs & Partner 39% (-1pt) Spirits Brands 24% (-2pts) 9% (-1pt) Europe/ Asia M. East/ Pacific Africa 31% (+2pts) 30% (-1pt) Rémy Martin 67% (+3pts) Annual results as of 31 March 2018 10
Slide 11: Breakdown of Group Sales (2)
Breakdown of Group Sales (2) Rémy Martin Liqueurs & Spirits €760.0m €266.8m Americas Americas 42% (-2pts) 40% (=) Europe/ Europe/ Asia Asia M. East/ M. East/ Pacific Pacific Africa Africa 11% (+1pt) 42% (+2pts) 49% (-1pt) 16% (=) Annual results as of 31 March 2018 11
Slide 12: Current Operating Profit
Current Operating Profit Reported growth: +4.7% (€m) Currency Scope Volume/ Price/ A&P Others Mix Mix -21.7 236.8 226.1 +50.0 -21.3 -18.5 -2.6 +24.7 Organic +14.1% + €31.8m March 17 March 18 COP/Sales: 20.7% COP/Sales : 21.0% (Org: 22.0%) Annual results as of 31 March 2018 12
Slide 13: Net profit
Net profit (€m) Net profit excluding non-recurring items Net profit Group share Reported +12.0% Reported -22.1% +22.0% organic change -15.0% organic change 190.3 151.3 148.2 135.0 March 17 March 18 March 17 March 18 Annual results as of 31 March 2018 13
Slide 14: House of Rémy Martin
House of Rémy Martin • Organic sales growth of 13.2% (volumes +6.0%) • Asia Pacific: accelerated growth driven by Sales (in €millions) Greater China, Singapore, Japan, and -1.9%* +3.2%* +10.0%* +13.2%* Travel Retail 760.0 707.5 750 647.8 • Americas: Good performance in the United 564.8 600 States, C
Slide 15: Rémy Martin
Rémy Martin 2nd LIMITED EDITION EPHEMERAL XO “CARTE BLANCHE A BAPTISTE LOISEAU” “REMY MARTIN HOUSES” Annual results as of 31 March 2018 15
Slide 16: LOUIS XIII
LOUIS XIII NEW MERCHANDISING OPENING OF 2nd BOUTIQUE: HARRODS, LONDON NEW SIGNATURE : “THINK A CENTURY AHEAD” 2nd OPUS OF THE “100 YEARS” CAMPAIGN Annual results as of 31 March 2018 16
Slide 17: House of Rémy Martin
House of Rémy Martin Current operating profit (€m) Reported growth: +10.4% Currency Volume/ Price/ Others A&P Mix Mix -15.3 204.4 185.2 +39.3 -23.8 +34.5 -15.6 Organic +18.8% + €34.8m March 17 March 18 COP/Sales: 26.2% COP/Sales: 26.9% Annual results as of 31 March 2018 (Org: 27.5%)17
Slide 18: Liqueurs & Spirits
Liqueurs & Spirits • Organic sales growth of -1.0% (volumes -4.9%) LFL sales +4% adjusted for the deconsolidation of Passoã Cointreau Sales • Growth driven by the US and ‘new frontier’ markets (in €millions) (Greater China and Russia) +7.2%* -1.5%* +1.3%* -1.0%* Metaxa 350 • Excellent annual perform
Slide 19: Liqueurs & Spirits
Liqueurs & Spirits Cointreau: New global campaign « THE ART OF THE MIX » Annual results as of 31 March 2018 Check out the campaign on Youtube: https://www.youtube.com/watch?v=xAhazGOckz8 19
Slide 20: Liqueurs & Spirits
Liqueurs & Spirits Metaxa launched in China New bottle for St-Rémy Number 3 high-end gin (in value) Annual results as of 31 March 2018 20
Slide 21: Liqueurs & Spirits
Liqueurs & Spirits Current operating profit (€m) Reported growth: -25.5% Currency Scope Volume/ Price/ A&P Others Mix Mix 57.5 -2.6 -2.6 42.8 -7.6 -1.0 -11.5 +10.7 Organic -16.4% (-10.7% ex Passoã) - €9.5m March 17 March 18 COP/Sales: 20.8% COP/Sales: 16.1% (Org: 17.6%) Annual results as of 31 March
Slide 22: Partner Brands
Partner Brands • Organic sales decline of 10.4% (volumes -0.5%) • End of the distribution agreement for the Sales (in €millions) Piper-Heidsieck and Charles Heidsieck champagne brands : €12M loss -0.6%* -8.1%* -14.2%* -10.4%* 200 • Consolidation of Passoã as a Partner Brand (in markets where Rémy Co
Slide 23: Partner Brands
Partner Brands • Current Operating Profit: €5.3m • Rebound of the COP linked to changes COP (in €millions) within the portfolio of distributed brands +41.2%* -22.9%* -72.4%* +175.7%* 10 8 7.3 6.1 6 5.3 4 2.0 2 0 March 2015 March 2016 March 2017 March 2018 * Organic figures Annual results as of 31 Ma
Slide 24: Financial results
Financial results LUCA MAROTTA CHIEF FINANCIAL OFFICER Annual results as of 31 March 2018 24
Slide 25: Current Operating Profit
Current Operating Profit Reported Organic (€m) 2017 2018 change change Sales 1,094.9 1,127.0 2.9% 7.2% Gross Profit 730.7 760.7 4.1% 9.1% in % 66.7% 67.5% +0.8pt +1.2pts Sales and marketing expenses (416.7) (432.7) 3.8% 7.9% Administrative expenses (88.5) (91.7) 3.6% 2.6% Other income and expenses 0
Slide 26: Current Operating Margin
Current Operating Margin Reported COP/Sales: +0.3pt +1.2pts -0.3pt +0.4pt -0.7pt -0.3pt 21.0% 20.7% Organic COP/Sales: +1.3pts 2016/17 Gross A&P Distribution/ Currency Scope 2017/18 COP/Sales Margin others COP/Sales Annual results as of 31 March 2018 26
Slide 27: Net profit
Net profit (€m) 2017 2018 Current Operating Profit 226.1 236.8 Other operating income (expenses) (4.8) (13.7) Operating profit 221.3 223.1 Net financial income (charge) (31.9) (22.0) Pre-tax profit 189.4 201.0 Taxes (44.5) (53.5) Tax rate 23.5% 26.6% Share profit (loss) of associated companies (19.6
Slide 28: Non-recurring items
Non-recurring items (M€) 2017 2018 Net profit – Group share 190.3 148.2 Net profit/(loss) from deconsolidated and discontinued operations (65.0) 0.0 Provision for equity interests 19.6 0.0 Impact of tax rate changes on deferred taxes in France and in the US (14.1) (5.8) 3% tax on the payment of divi
Slide 29: Net debt/Cash flow
Net debt/Cash flow (M€) 2017 2018 Change Opening net financial debt (1 April) (458.2) (390.1) 68.1 Gross operating profit (EBITDA) 248.6 261.5 12.9 WCR of eaux-de-vie and spirits in ageing process (33.6) (35.1) (1.5) Other working capital items (5.5) 26.6 32.1 Capital expenditure (36.9) (33.6) 3.3 F
Slide 30: Net financial expenses
Net financial expenses (€m) 2017 2018 Gross debt servicing costs (21.5) (14.5) Investment income 0.0 0.0 Sub-total (21.4) (14.4) Net currency gains (losses) (5.4) (2.9) Other financial expenses (net) (5.1) (4.8) Net financial income (charges) (31.9) (22.0) Annual results as of 31 March 2018 30
Slide 31: Foreign exchange: hedging impact
Foreign exchange: hedging impact 1.30 Hedged rate €/$ Average €/$ 1.23 1.27 1.19 1.11 1.17 1.10 1.10 2014/2015 2015/2016 2016/2017 2017/2018 March March March March Annual results as of 31 March 2018 31
Slide 32: Currency impact on Sales and COP
Currency impact on Sales and COP 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19E Average EUR/USD exchange rate 1,34 1,27 1,10 1,10 1,17 1,18 Average EUR/USD hedged rate 1,31 1,30 1,23 1,11 1,19 1,23 Total sales impact (in €m) -33,9 30,3 82,7 -5,7 -48,9 -10,0 Total COP impact (in €m) 5,0 1,0 12,9 23
Slide 33: Balance sheet at 31 March 2018
Balance sheet at 31 March 2018 Assets Liabilities (€m) March in % March in % March in % March in % 2017 2018 2017 2018 Non- Shareholders’ 983 40% 959 38% 1,304 53% 1,408 55% current equity assets Current 1,381 57% 1,396 55% Current and assets Non-current 670 28% 664 26% liabilities o/w inventories 1
Slide 34: ROCE
ROCE 34.8% 32.6% 23.1% 24.1% 21.3% 21.2% 21.9% 6.5% Rémy Martin Liqueurs & Partner Group Spirits Brands 2017 2018 Annual results as of 31 March 2018 34 33
Slide 35: Changes in Capital Employed
Changes in Capital Employed (€M) Liqueurs & Partner Spirits Brands Rémy Martin (+9.2%) (-44.5%) (+2.4%) +15.1 -13.9 +10.7 -18.9 +21.1 1,087.0 1,078.8 1,064.7 +€22.3M +2.1% March- 17 Rémy Liqueurs & Partner March- 18 Scope Currency March- 18 Reported Martin Spirits Brands Organic Reported Annual resu
Slide 36: Key events during the year
Key events during the year • 25 July 2017 Approval of an ordinary dividend of €1.65 per share to the AGM (with an option allowing a full payment in shares). 70% of the rights were exercised by the shareholders in favor of a payment in shares. Payments of the dividend were made on September 4, 2017.
Slide 37: Dividends
Dividends A dividend of 1.65 euro per share (unchanged compared to last year), with an option to receive the dividend in cash or in shares (for all dividends distributed), will be put to a shareholders’ vote at the general assembly on 24 July 2018. Shares will trade ex-dividend on 31 July 2018 and d
Slide 38: Outlook
Outlook VALÉRIE CHAPOULAUD-FLOQUET CHIEF EXECUTIVE OFFICER Annual results as of 31 March 2018 38
Slide 39: Contribution of Exceptional Spirits
Contribution of Exceptional Spirits Contribution of Exceptional Spirits (>USD50) to the Group’s total sales 45% 49% 51% 53% 60-65% >USD50 <USD50 55% 51% 49% 47% 35-40% 2014/15 2015/16 2016/17 2017/18 Medium-Term Annual results as of 31 March 2018 39
Slide 40: 2019/20 Outlook
2019/20 Outlook New objective to improve the organic(*) COP margin FY2018-2020 (pre-IFRS): +240-300bps vs. +80-180bps previously Change in basis points 0 50 100 150 200 250 300 +80 +180 Initial objective: organic increase of the margin over 3 years ending March 2020 Organic increase of the margin in
Slide 41: IFRS 15, 16 & 9
IFRS 15, 16 & 9 IFRS 15: Methodology • IFRS 15 will be applied from fiscal Q1 2018/19 (a pre-IFRS set of figures will be reported as well) • Reclassifications of some A&P expenses will reduce sales and gross profits IFRS 15: Estimated impacts (pro-forma 2018/19) • Neutral impact on COP; COP Margin u
Slide 42: 2018/19 full-year outlook
2018/19 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 20
Slide 43: Questions & Answers
Questions & Answers Annual results as of 31 March 2018 43