STRATEGIC PLAN UPDATE: BIG DECEMBER 2016

Transcription

1 STRATEGIC PLAN UPDATE: BIG DECEMBER 2016

2 AGENDA 1. Recap of BiG 2.0: Rationalization and Optimization mostly finalized Rationalization update Optimization update 2. BiG 3.0: Delivering the growth component of the strategic plan Business model: Capturing the mainstream growth opportunity A portfolio of six pillar brands Other businesses: Sobieski Trade and Private Label Growth across four geographic clusters 3. A compelling investment case 4. Conclusion 2

3 2016 A DECISIVE YEAR FOR MBWS 2016 has been a decisive year in the corporate and business development of Marie Brizard Wine & Spirits MBWS exited its recovery plan at end-june after paying off the entirety of its frozen debt five years ahead of schedule MBWS is now a normalized company vis-à-vis the financial markets Long-term loan of 62.5m (five-year maturity) Positioned for strategic external growth Rationalization and Optimization components of the strategic plan largely completed MBWS is now laser-focused on profitable growth * Excluding impact of IFRS Standard # Guidance Reconfirmed: EBITDA on the order of 20m* 3

4 1 Recap of BiG 2.0: Rationalization and Optimization

5 RATIONALIZATION UPDATE Assets Type Value 2016e EBITDA impact Achieved Disposal Real Estate Distribution: Galeria Alkoholi Production: Augustowianka Restructuring Sobieski Trade (wholesale) 2016 cash-in ~ 13m ~ 30m 2017 cash-in ~ 17m + 3.5m To be Disposed Real Estate Production equipment in Poland Others ~ 5m - Total ~ 35m + 3.5m Rationalization is completed, with Sobeski Trade remaining in the Group (BiG 2.0 target is exceeded pro forma for the preservation of Sobieski Trade) 5

6 OPTIMIZATION PROGRAM ON TRACK Additional EBITDA impact 2016e 2017e 2018e 10 out of the 12 initiatives are now in place Industrial footprint Better sourcing (done) Streamline the business (done) Development of core capabilities (done) ~ 5m ~ 12m Vodka manufacturing ongoing Insource distillation capability in Poland by end 2017 ~ 8m Route To Market in place, strenghtening of the distribution network in several key markets Contribution to Growth as of 2017 Optimization in line with the 25m EBITDA impact of BIG 2.0 ~ 5m of EBITDA impact in 2016e ~ 20m to be delivered in 2017e-2018e 6

7 BIG 3.0: FINANCIAL OVERVIEW Net sales m 2014A 2015A 2016e - Rationalize Optimize Grow 2018e 466,7 451,1 ~ EBITDA m % of net sales Investments m 5,2 11,2 1,1% 2,5% 16, ~20 4,4% Self financed plan; 3-year capex 16 18: 52m % 7

8 2 BiG 3.0: Focus on profitable growth

9 BIG 3.0 BUSINESS MODEL AND ORGANIZATION IN LINE TO DELIVER PROFITABLE GROWTH Growth to be driven along two axes: BiG 3.0 strategic plan enhancements: Branded Business Sobieski Trade Private Label Business Growth strategy built on six pillar brands, including Cognac Gautier, and key local brands Strengthening of distribution networks Four geographic clusters, including Asia Pacific Possibility of returning cash to shareholders Other Businesses BiG 3.0 Business Model: Capturing the mainstream growth opportunity Standard segment of the spirits sector provides the largest absolute growth The standard segment of the market to drive growth in key geographies, given current macroeconomic, regulatory and demographic trends 9

10 CURRENT TRENDS SUPPORT A MAINSTREAM GROWTH MODEL Macroeconomics drive reality: on-going sluggish growth in developed countries and slowing growth in many emerging markets Growth of the middle class across emerging markets. As an example, the middle class in China is forecast to double in size by 2022 to 220m people, with a growing appetite for quality but affordable imported products Advertising in the spirits sector increasingly curtailed by public health policies; ability to convey emotional benefits of premium products significantly constrained Growth of mainstream retailers, with more shelf space allocated to private label and mainstream brands, and limited shelf space available for niche/craft/premium SKUs Generation Y consumption preferences skew toward more personal experiences, and value-formoney 10

11 2018 GUIDANCE CONFIRMED BIG Group BIG branded business BIG 3.0 Other businesses BIG Group Scope Group excluding Sobieski Trade Pillar and local brands and branded wines Sobieski Trade and private label Group including Sobieski Trade and private label Sales 450m - 500m 360m - 400m 230m - 260m 590m - 660m EBITDA 67m - 75m 61m - 69m 7m - 8m 68m - 77m EBITDA margin 15% 17% 3% 12% 11

12 ORGANIC GROWTH OUTLOOK FOR PILLAR BRANDS: MOMENTUM SET TO INCREASE Growth of six pillar brands 3,4 1 0,5 2,7 1,8 0, % 4,1 1 0,5 2,9 1,9 0, ,0 1,5 1,0 3,4 3,0 0,1 BIG e CAGRs 7% 13% 26% 6% 14% 48% 2015 Achievements: o All pillar brands outperformed their respective categories*: William Peel fastest growing top 10 Scotch Whisky Krupnik 5th fastest growing top 100 spirits 2016 Achievements: o In France**: MBWS largest contributor to spirits market growth YTD WP Double Maturation spirit sector innovation generating the highest turnover for the off-trade YTD o In the US***: MBWS is fastest growing supplier to the on-premise spirits segment o Globally: Relaunch of Marie Brizard and Gautier Growth Drivers: o Strengthening of RTM o Consistent growth of A&P o Innovation and category management capitalizing on leading market share o Continued expansion internationally o Rejuvenation of strong local franchises Source: *Impact databank **Nielsen YTD P *** Nielsen CGA MAT 8/

13 SIX PILLAR BRANDS: WILLIAM PEEL, SOBIESKI, KRUPNIK, MARIE-BRIZARD, FRUITS AND WINE & GAUTIER Positioning: Accessible, quality Scotch whisky at an affordable price. Pricing: 10% below standard category leader. Primary markets: France, Spain, Poland, Baltics, China. Latest innovation: Double Maturation. #8 volume whisky brand in the world. Positioning: Iconic, pioneering liqueur brand, dating from mid-18 th century; Aromatic intensity / Mixologist recognition as a premium liqueur at an affordable price. Pricing: ~20% below premium sector leader. Primary markets: Spain, France, UK, Asia. Latest innovation: packaging, re-branding. Positioning: Authentic vodka, deeply rooted in Poland, distilled from 100% pure Rye. Pricing: in-line with standard segment peers. Primary markets: USA, Poland, France & Lithuania. #2 vodka brand in France. Positioning: Leading aromatized wine-based drink Pricing: Index 115 vs main competitors. Primary markets: France, USA, Spain, Japan. Latest innovation: Floral range & Mandarin. #1 in France in volume and value. Positioning: Traditional Polish vodka, distilled from 100% grain, with a broad flavor range. Pricing: in-line with standard segment peers. Primary markets: Poland. Latest innovation: 4 new seasonal flavors. #5 fastest growing brand of the WW Top100 in Positioning: Cognac born in 1755, credentials above premium cognacs; privileged aging facility that provides unique humidity conditions for optimal quality. VS, VSOP and XO offers at affordable prices. Pricing: ~10% below premium category leader. Primary markets: Canada, USA, China, Europe. Recognized twice as the world s Best Cognac. 13

14 STEADY MARKET SHARE GAINS France William Peel Sobieski Fruits and Wine Change in Volumes 2016 YTD Market MBWS +1.3% +5.4% 24.4% +2.0% +27.2% 14.7% -12.5% -9.8% 29.3% Market Share MBWS YTD change +1.0 pts +2.9 pts +0.9 pts Poland Krupnik Clear Krupnik Flavored Total Krupnik Brand +2.7% +3.7% 15.7% +5.8% +43.4% 4.6% +3.4% +6.1% 13.1% +0.2 pts +1.2 pts +0.3 pts Source: Nielsen P : FR Spirits IRI P : FR Wines Nielsen P Poland 14

15 OTHER BUSINESSES Other businesses Of Which: Sobieski Trade Financial Summary & Targets 2015 Net Sales ( m) 2018e Net Sales ( m)* 15-18e Sales CAGR* % % Private label % * mid-point of estimate range Sobieski Trade: a tactical tool for strengthening MBWS branded business in the Polish traditional trade Sobieski Trade will be EBITDA positive from 2016 on Provides MBWS with an additional tool to reach the traditional trade in Poland (~50% of Polish spirits market) Recently-signed deal with Coca-Cola HBC Polska expands Sobieski Trade s distribution reach, and provides access to new accounts in the traditional trade Complementary to MBWS strategic partnership with Eurocash Private Label: optimizes production and facilitates business development Enables MBWS to optimize the capacity utilization of its production facilities As purveyors of private label wines to the large retailers in some key markets, MBWS maintains stronger ties with key players for the distribution and sale of its strategic pillar brands 15

16 FOUR GEOGRAPHIC CLUSTERS Central and Eastern Europe Cluster Juozas Daunys Central and Eastern Europe Primary market: Poland Other markets: Lithuania, Bulgaria Asia Pacific Cluster Americas Cluster Nicolas Guillant Americas Primary market: United States Other markets: Brazil, Canada Western European, Middle East & Africa cluster Xavier Penas (France) Nikolaos Smyrnof (rest of cluster) Western Europe, ME, Africa Primary market: France Other markets: Spain, UK, Denmark, Morocco Henriette Holmgreen Asia Pacific Primary market: China Other markets: Japan, Australia 16

17 WESTERN EUROPE, MIDDLE EAST & AFRICA Financial Summary & Targets 15-18e Vol. CAGR* 2015 Net Sales ( m) 2018e Net Sales ( m)* 15-18e Sales CAGR* Cluster 4% % Of which: France 3% % Other 11% % * mid-point of estimate range Achievements Ongoing market share growth for all pillar brands, becoming the fastest growing and the largest contributor to growth in France Commercial excellence in place with strengthened sales team in France & Spain Creation of customer marketing team in France to lead category management with trade Launch of successful innovations with William Peel Double Maturation, San José Margarita Secured new third party brands to reinforce portfolio relevance (Sazerac, Choya) Key Brands Growth Drivers Pillars Local * Consistency of ATL investments Full benefit from Marie Brizard relaunch in Spain & France Full deployment of innovation Category management leadership in key categories Strengthening of RTM in the UK and Morocco * * * * * Third party brands 17

18 CENTRAL & EASTERN EUROPE 15-18e Vol. CAGR* 2015 Net Sales ( m) 2018e Net Sales ( m) 15-18e Sales CAGR* Cluster 14% % Of Which: Poland 15% % Rest of CEE 13% % * mid-point of estimate range Financial Summary & Targets Key Brands Achievements Strengthening of RTM in Poland with Eurocash Launch of William Peel, Fruits and Wine in main markets (Poland, Lithuania and Bulgaria) Successful relaunch of Krupnik clear and rejuvenation of Biala Dama in Poland Launch of successful innovations with Krupnik flavored New management team in Poland and in Bulgaria Growth Drivers Pillars Local Growth of pillars brands Full benefit of Krupnik flavored launch Growth of export markets within the cluster Distribution gains driven by new RTM 18

19 AMERICAS 15-18e Vol. CAGR* 2015 Net Sales ( m) 2018e Net Sales ( m)* 15-18e Sales CAGR* Cluster 18% % * mid-point of estimate range Financial Summary & Targets Achievements Strengthening of RTM in the US with SGWS & Empire Launch of Fruits & Wine at Publix (3rd largest grocery chain in the US) MBWS among fastest growing suppliers to the on-premise segment of spirits in the US (5.9% 12-mo. growth, compared to sector average of 1.7%) per Nielsen On- Premise Measurement Service New management team in Brazil Pillars Key Brands * Local Growth Drivers Distribution drive for Sobieski in the US Distribution of Marie Brizard and Cognac Gautier distribution in the US taken in-house. Expansion of Fruits and Wine nationwide New customers in Brazil as well as new listings in Canada * Third party brands 19

20 ASIA PACIFIC Financial Summary & Targets 15-18e Vol. CAGR* 2015 Net Sales ( m) 2018e Net Sales ( m)* 15-18e Sales CAGR* Cluster 14% % * mid-point of estimate range Strategic review and plan Achievements New RTM in China with (i) COFCO for William Peel & Sobieski and (ii) HLX for Cognac Gautier Professionalized management at cluster level as well as in Japan and in China Pillars Key Brands Growth Drivers Mainstreamization and cocktails are growing trends in China Cognac market cleaned and back to growth in China Launch of new Marie Brizard platform in Japan from Q

21 3 A compelling investment case

22 A DISCOUNTED EV/EBITDA VS. PEERS EV/2018E EBITDA MBWS - BiG 3.0 6,1x MBWS - Consensus 7,6x Campari Diageo Pernod Ricard 12,5x 13,6x 14,0x Remy Cointreau 16,4x Stock Spirits 8,8x Core Average 13,6x Small-Cap French Spirits 14,9x Source: Bloomberg Consensus at 08/12/2016 Note: Small-Cap French Spirits include: Advini, Lanson, Laurent Perrier and Vranken-Pommery 22

23 DESPITE SUPERIOR EBITDA GROWTH 2015A-2018E EBITDA CAGR MBWS - BiG ,3% MBWS - Consensus 71,5% Campari Diageo Pernod Ricard Remy Cointreau Stock Spirits Core Average 8,2% 8,1% 4,2% 12,0% 0,4% 6,6% Small-Cap French Spirits 9,2% Source: Bloomberg Consensus at 08/12/2016 Note: Small-Cap French Spirits include: Advini, Lanson, Laurent Perrier and Vranken-Pommery 23

24 HIGHER RETURN ON CAPITAL EMPLOYED 2018E Return on Capital Employed MBWS - BiG ,1% MBWS - Consensus 15,5% Campari 10,2% Diageo 15,9% Pernod Ricard 9,2% Remy Cointreau 12,1% Stock Spirits 8,6% Core Average 11,2% Small-Cap French Spirits 5,5% Source: Bloomberg Consensus at 08/12/2016 Note: Small-Cap French Spirits include: Advini, Lanson, Laurent Perrier and Vranken-Pommery; Return on Capital Employed calculated based on consensus EBIT and latest reported balance sheet 24

25 AND HIGHER EXPECTED RETURN ON EQUITY 2018E Return on Equity MBWS - Consensus 19,2% Campari 12,3% Diageo 28,0% Pernod Ricard Remy Cointreau 10,6% 12,0% Stock Spirits 7,0% Core Average 14,0% Small-Cap French Spirits 6,7% Source: Bloomberg Consensus at 08/12/2016 Note: Small-Cap French Spirits include: Advini, Lanson, Laurent Perrier and Vranken-Pommery 25

26 DISCIPLINED CAPITAL ALLOCATION MBWS is in a position to offer new options for disciplined capital allocation Organic Growth Innovation & new products Further modernization of plants Digital platforms Generating free cash flow Selective M&A Bolt-on acquisitions Strengthen the current RTM or add new outputs to the brand s portfolio Relutive to EBITDA margin Acquisition EBITDA multiples below sector average Return to Shareholders Back to dividend distribution in the mid-term Share buyback program Balance sheet prudence Strict financial discipline 26

27 4 Conclusion

28 CONCLUSION Rationalization and Optimization components largely completed and contributing to EBITDA Growth model: Capturing the mainstream opportunity in the spirits market Tools in place to deliver profitable growth 6 pillar brands with strong multi-regional recognition 4 geographic clusters Complementary businesses Strong RTM agreements in key geographies to secure the 2018 growth targets Confirmation of 2018 targets 28

29 Q & A

30 APPENDICES 30

31 BUSINESS REPORTING STRUCTURE 21% 18% MBWS 2015 Sales* 61% 2015 Net Sales TOTAL Marie Brizard Wine & Spirits Branded Business Western europe, Middle East & Africa Central & Eastern Europe 95.6 Americas 27.1 Asia Pacific 3.6 Other businesses Sobieski Trade 92.7 Branded business Private Label Wine Sobieski Trade * Excluding assets sold in in the amount of 5.6m Private label 80.9 Assets sold in Objective: provide greater visibility into top-line and profit drivers Prior period results will be restated to fit new reporting structure; to be communicated with FY 2016 results 31

32 EXTERNAL REPORTING BY GEOGRAPHIC CLUSTER Geographic clusters Volume Volume Growth Net Sales Net Sales Growth EBITDA 1. Western Europe & MEA France Balance of WEMEA 2. Central and Eastern Europe Poland Balance of CEE 3. Americas 4. Asia Pacific A. SUB-TOTAL BRANDED BUSINESS B. OTHER BUSINESSES Sobieski Trade Private Label C. HOLDING TOTAL = A + B + C 32

33 EXTERNAL REPORTING BY BRAND Volume Growth Net Sales Net Sales Growth Marketing Spend Pillar Brands William Peel Sobieski Krupnik Cognac Gautier Marie Brizard Fruits and Wine Others Total 33