H1 2018 Results Presentatin 9 May 2018
Disclaimer This dcument has been prepared by Cmpañía de Distribución Integral Lgista Hldings, S. A. ( Lgista Hldings r the Cmpany ) fr infrmatin purpses, and des nt cnstitute an ffer f purchase, sale r exchange, neither an invitatin fr an ffer f purchase, sale r exchange f shares f the Cmpany, r any advice r recmmendatin with respect t such shares. This dcument cntains certain statements that cnstitute r may cnstitute frward lking statements abut the Cmpany, including financial prjectins and estimates and their underlying assumptins, which are nt guarantee f future perfrmance r results, and are subject t risks, uncertainties and ther imprtant factrs beynd the cntrl f Lgista Hldings that culd cause final perfrmance r results materially different frm thse expressed in these statements. These risks and uncertainties include thse discussed r identified in the dcuments filed by Lgista Hldings with the relevant Securities Markets Regulatrs, and in particular, with the Spanish Market Regulatr. Analysts and investrs are cautined nt t place any reliance n such frward lking statements, which reflect knwledge and infrmatin available as f the date f this dcument. The Cmpany des nt undertake t update r revise publicly these frward lking statements in case unfreseen changes r events ccur which culd affect these statements, even if these changes r events make clear that the statements shall nt be realized. Finally, it shuld be nted that this dcument may cntain infrmatin which has nt been audited and may cntain summarized infrmatin. This infrmatin is subject t, and must be read in cnjunctin with, all ther publicly available infrmatin, including if it is necessary, any fuller disclsure dcument published by Lgista Hldings. H1 2018 Results Presentatin / 9 May 2018 / Page 2
Index: Results Highlights Business Review Financial Review Outlk H1 2018 Results Presentatin / 9 May 2018 / Page 3
H1 2018 Results Highlights Sund start f fiscal year 2018 Ecnmic Sales grwing t 545.2m (+6.5%) Revenues decreased by 1.3% t 4,466.5m with Pharma, Cnvenience and Transprt partially ffsetting lwer e-transactins and tbacc vlumes drp (-2.2% cigarettes + RYO). Increasing Ecnmic Sales in all activities in Iberia and Italy Slightly psitive impact frm price/tax mvements in H1 2018 vs. H1 2017 Adjusted EBIT up by +14.1% t 114.1m, excluding H1 2017 nn-recurring cst up by +6.8% Stable Adjusted EBIT margin ver Ecnmic Sales if nt cnsidering that impact: 20.9% Prfit frm Operatins increasing +25.2% t 80.0m Net Incme declined t 71.1m (-7.1%) Nn-recurring financial incme in Q1 2017 frm the sale f an affiliate in Italy Ecnmic Free Cash Flw: 291.6m Calendar effect and price/tax mvements translated int a higher negative wrking capital Dividend per share paid in the semester: 0.75 (+15.4% ver dividend paid in H1 2017) Adjusted EBIT grwing 14.1% n a slid recurring activity perfrmance ver a lw cmparisn base in H1 2017 frm a ne-ff prvisin H1 2018 Results Presentatin / 9 May 2018 / Page 4
Business Review H1 2018 Results Presentatin / 9 May 2018 / Page 5
Business Review Snapsht by segment RSP increases in Q1, declining tbacc vlumes Iberia Very psitive track-recrd in cnvenience Strng perfrmance f Transprt Pharma grwth cntinues Nn-recurring csts in Q1 impacting reprted figures last year Revenues: 1,315.9m (+4.1%) Ec. Sales: 276.8m (+5.7%) Adj. EBIT: 56.5m (+20.8% ) Csts increasing belw activity in reprted and underlying terms France Excise tax increases planning, apprved and started: RSP increases Tbacc vlumes dwn, nt yet reflecting impact n sales t cnsumer Slight ersin n Other Businesses Csts reducing n a lwer underlying activity Revenues: 1,938.0m (-5.0%) Ec. Sales: 125.6m (-7.6%) Adj. EBIT: 26.0m (-15.4%) Italy Tbacc vlumes dwn, RSP increases in H1 2018 vs. stable in H1 2017 Ec. Sales benefiting since last year frm enlarged prtfli f services t manufacturers Duble digit grwth n cnvenience sales Revenues: 1,236.9m (-0.1%) Ec. Sales: 142.1m (+26.4%) Adj. EBIT: 37.8m (+32.9%) Crprate & Others Stable crprate csts N majr changes f perfrmance in Pland Revenues: - 24.3m (-64.7%) Ec. Sales: 0.8m (-55.3%) Adj. EBIT: - 6.2m (-4.2%) H1 2018 Results Presentatin / 9 May 2018 / Page 6
Business Review Iberia Lwer reductin f tbacc vlumes in Spain in Q2 than in Q1 leading H1 t: Tbacc and Related Cigarettes: -2.6% vs. -2.0%; RYO: -1.5% vs. -2.8% RSP increase in Q1: +5 cents vs. +10 cents in H1 2017 Prtuguese business cntinues rganic and nn-rganic grwth Ecnmic Sales f cnvenience prducts strngly up despite fall in Revenues, after the change in billing system frm a client, nt affecting Ecnmic Sales Revenues: 1,108.5m (+2.7%) Ec. Sales: 131.8m (+3.1%) Transprt Healthy perfrmance f the 3 lines f services Lng-distance: benefitting frm NGP s cntract in Italy despite verall tbacc vlumes fall Parcel and Curier: strng general cnsumptin indicatrs adding t grwth in urgent services frm n-line sales Revenues: 184.6m (+8.0%) Ec. Sales: 126.2m (+5.6%) Other Businesses Pharma activity shwing the psitive effect f the incrpratin f new clients and seasnality in the vaccines calendar New value added services in distributin t hspitals and pharmacies Psitive perfrmance f Publicatins n a extremely cmpetitive sectr Revenues: 71.1m (+19.3%) Ec. Sales: 41.4m (+17.2%) Adjusted EBIT Custmary cst cntrl and efficiency imprvement measures Recurring csts (excluding 6.8m ne-ff prvisin last year) grew 5.8%, belw recurring activity Adj. EBIT: 56.5m (+20.8%) H1 2018 Results Presentatin / 9 May 2018 / Page 7
Business Review France Tbacc and Related Tbacc vlumes significantly drpping in H1: Cigarettes: -5.2% vs. -3.0%; RYO: -9.6% vs. -1.3% Excise tax increases planned fr 2018 cmpleted (35 cents and 1 Eur in Nvember and March) and almst cmpletely transferred t RSP. Uneven RSP increases in tbacc in Q2 2017 nt cmpensating fr new excise taxes and increase in tbaccnists cmmissin. Negative impact n inventries valuatin in bth perids, greater in H1 2018 Raise n Sales f cnvenience and tbacc related prducts partially ffsetting a significant drp in e-transactins (telephny tp-ups & cash cards) Revenues: 1,853.6m (-4.9%) Ec. Sales: 105.0m (-8,3%) Imprvement f Ecnmic Sales margin ver Revenues in electrnic transactins, unitary fee increase frm tbacc vlume drp and value added services mitigated the reductin in Ecnmic Sales Other Businesses Stable cnsumptin envirnment translating int a grwing cmpetitin in the sectr Ecnmic Sales rate f decline mderating Revenues drp, as a result f slightly better margins Revenues: 88.0m (-4.7%) Ec. Sales: 23.5m (-2.0%) Adjusted EBIT Ttal perating csts dwn 5.3% very much in line with underlying activity Restructuring csts well belw preceding year, wait-and-see strategy with respect t vlumes evlutin Adj. EBIT: 26.0m (-15.4%) H1 2018 Results Presentatin / 9 May 2018 / Page 8
Business Review Italy Tbacc and Related Small drp in cigarette vlumes ver a sharp reductin in H1 2017: Cigarettes: -1.0% vs. -7.8% ; RYO: +16.0% vs. +10.9% RSP increase (+10 r +20 cents) but nt significant excise tax update vs. a higher tax impact last year Psitive net effect n inventries valuatin in H1 2018 vs. negative in H1 2017 Ecnmic Sales frm value added services t manufacturers mainly benefitting frm last year s expansin f NGP s factry cntract Revenues: 1,236.9m (-0.1%) Ec. Sales: 142.1m (+26.4%) Grwth clse t 20% in Ecnmic Sales f Cnvenience prducts Adjusted EBIT Ttal perating csts grwing slightly abve recurring activity due t grwing relative weight f lgistic peratins linked t the NGP s factry cntract Efficiency maintained, masked by the margin mix Adj. EBIT: 37.8m (+32.9%) H1 2018 Results Presentatin / 9 May 2018 / Page 9
Financial Review H1 2018 Results Presentatin / 9 May 2018 / Page 10
Financial Review: P&L Sund recurring activity grwth ( m) H1 2018 H1 2017 Δ% Revenues 4,466.5 4,527.0 (1.3)% Ec. Sales 545.2 511.9 +6.5% (-) Distributin Csts (357.5) (338.5) (5.6)% (-) Sales and Marketing Expenses (34.1) (33.2) (2.6)% (-) G&A and Research Expenses (39.6) (40.2) +1.5% Ttal Csts (431.2) (411.9) (4.7)% Adjusted EBIT 114.1 100.0 +14.1% Margin % 20.9% 19.5% +140 b.p. (-) Restructuring Csts (1.7) (5.2) +66.4% (-) Amrt. f Assets Lgista France (26.2) (26.1) (0.3)% Revenues: Grwth in Pharma, Transprt and Cnvenience mitigating drp in tbacc vlumes, nly partially ffset by RSP increases in all gegraphies Ecnmic Sales: All activities grwing in Spain and Italy, mre than ffsetting reductins in France Nt very significant impact n inventries valuatin in H1 in either perid althugh psitive in H1 2018 vs. slightly negative in H1 2017 Ttal csts: Adjusting nn-recurring csts in Iberia ( 6.8millin) in Q1 2017 up +6.4%, almst in line with reprted and recurring activity Recurring Adjusted EBIT: +6.8% implies a stable 20.9% margin ver Ec. Sales Restructuring csts dwn, n relevant measures yet in France (-) Net Lss n Dispsal and Impairments 0.0 0.0 n.r. (-) Share f Results f Cmpanies and Others 0.8 0.8 +5,1%. Prfit frm Operatins 87.0 69.5 +25.2% Psitive perfrmance f Bks distributin H1 2018 Results Presentatin / 9 May 2018 / Page 11
Financial Review: P&L Net Incme reductin frm H1 2017 ne-ff capital gain ( m) H1 2018 H1 2017 Δ% Prfit frm Operatins 87.0 69.5 +25.2% (+) Financial Incme 6.1 24.0 (74.4)% (-) Financial Expenses (0.8) (0.7) (15.3)% Prfit befre taxes 92.3 92.8 (0,5)% (-) Crprate Incme Tax (21.2) (16.2) (30.8)% Effective Incme Tax Rate 23.0% 17.5% (550) b.p. (+/-) Other Incme / (Expenses) 0.0 (0.0) n.r. (-) Minrity Interest 0.0 0.1 (49.3)% Net Incme 71.1 76.6 (7.1)% Much lwer reprted Financial Result: Psitive impact frm sale f Italian affiliate in Q1 2017 Same interest rate ver slightly higher average cash psitin Crprate Incme Tax : Cntinues benefiting frm sme deductins applied in Spain in the last tw years Previus year s capital gain in Italy taxable at a very lw rate Net incme up by 21% excluding capital gain in H1 2017 H1 2018 Results Presentatin / 9 May 2018 / Page 12
Financial Review: Investments Investing n differentiatin ( m) H1 2018 H1 2017 Δ% Maintenance 3.1 3.0 3.3% Infrastructure 6.9 5.5 25.5% IT investments (technlgy) 6.3 5.3 18.9% Ttal investments 16.3 13.8 17.9% Increase in infrastructure due t the adaptatin f prcesses t the track & trace cming regulatin Increase in IT linked t the grwth f retailers cnnected t Lgista thrugh their TPS Lgista keeps a substantial part f its investments in technlgy and innvatin in rder t supprt the develpment f new value added services H1 2018 Results Presentatin / 9 May 2018 / Page 13
Financial Review: Free Cash Flw (MM ) H1 2018 H1 2017 Change EBITDA 132.5 117.1 +15.4 Wrking Capital Variatins and Other 192.0 (117.7) +309.7 Seasnality f the business turned arund by calendar effect and RSP/tax mvements in France Crprate Incme Tax Paid (21.9) (45.4) +23.5 Financial Incme and Expenses Flws 5.3 27.6 (22.3) Lwer crprate incme tax paid and better results mre than ffsetting drp in financial results Cash Flw Frm Operating Activities 307.9 (18.4) +326.5 Capex (16.4) (19.8) 3.4 Ecnmic Free Cash Flw 291.6 (38.2) +329.8 % ver EBITDA 220% (33)% Investments: nrmalised level in the absence f nn-recurring divestment (funds frm the sale f the stake in an affiliate in Italy last year) During Q2 2018, final dividends fr FY 2017 were paid: 99m H1 2018 Results Presentatin / 9 May 2018 / Page 14
Financial Review: Cnclusins Recurring perfrmance slightly utperfrming mid-term grwth target despite drp in distributed vlumes Strng Net Prfit grwth excluding last year s psitive impact frm sale f affiliate in Italy Crprate incme tax rate still benefiting frm duble taxatin deductin in Spain Attractive Dividend retributin thrugh 2 dividend payments per year (interim in August and final in March f the fllwing year) H1 2018 Results Presentatin / 9 May 2018 / Page 15
Outlk H1 2018 Results Presentatin / 9 May 2018 / Page 16
Outlk 2018 Adj. EBIT expected t grw duble-digit Current trading envirnment cnfirms management s expectatins: arund duble-digit Adjusted EBIT grwth rate in FY2018 Underlying activity is expected t cntinue perfrming slightly psitively Nn-recurring effects, nt managed by Lgista, will benefit frm a negative cmparisn base, very unlikely t be repeated and uncertain in magnitude Higher restructuring csts, depending n activity evlutin in France If, as requested by the Gvernment, sharp RSP increases are implemented by tbacc manufacturers, tbacc vlumes will prbably plunge Lwer Financial Results as n extrardinary impacts expected Crprate Incme Tax will increase cmpared t FY2017 in the absence f ne-ff effects (nly benefitting frm duble-taxatin deductin in Spain, but much lwer than in previus years) After 2 years recrding duble-digit grwth, Net Prfit in FY2018 will stabilize at a high base, similar t FY2017 H1 2018 Results Presentatin / 9 May 2018 / Page 17
Appendix H1 2018 Results Presentatin / 9 May 2018 / Page 18
Tbacc Vlumes Evlutin Psitive perfrmance Millin units % change 1 Oct. 2017-1 Oct. 2016-1 Oct. 2015-1 Oct. 2017-1 Oct. 2016-31 Mar. 2018 31 Mar. 2017 31 Mar. 2016 31 Mar. 2018 31 Mar. 2017 TOTAL Cigarettes 74,348 76,171 79,963 (2.4)% (4.7)% RYO/MYO 9,951 10,067 9,997 (1.1)% 0.7% Cigars 1,911 1,874 1,869 2.0% 0.3% SPAIN Cigarettes 20,471 21,009 21,449 (2.6)% (2.0)% RYO/MYO 2,952 2,996 3,081 (1.5)% (2.8)% Cigars 925 956 1,001 (3.3)% (4.5)% PORTUGAL Cigarettes 1,073 892 839 20.3% 6.3% RYO/MYO 50 55 71 (9.6)% (22.3)% Cigars FRANCE Cigarettes 20,476 21,605 22,265 (5.2)% (3.0)% RYO/MYO 4,194 4,638 4,701 (9.6)% (1.3)% Cigars 589 603 639 (2.3)% (5.6)% ITALY Cigarettes 32,328 32,665 35,410 (1.0)% (7.8)% RYO/MYO 2,756 2,377 2,144 16.0% 10.9% Cigars 397 315 229 26.1% 37.8% H1 2018 Results Presentatin / 9 May 2018 / Page 19
Revenues Evlutin By segment and activity ( m) H1 2018 H1 2017 Δ% Iberia 1,315.9 1,264.4 +4.1% Tbacc and Related 1,108.5 1,079.3 +2.7% Transprt 184.6 170.9 +8.0% Other Businesses 71.1 59.6 +19.3% Adjustments (48.3) (45.5) (6.3)% France 1,938.0 2,039.4 (5.0)% Tbacc and Related 1,853.6 1,950.2 (4.9)% Other Businesses 88.0 92.3 (4.7)% Adjustments (3.6) (3.1) (18.6)% Italy 1,236.9 1,238.0 (0.1)% Tbacc and Related 1,236.9 1,238.0 (0.1)% Crprate & Others (24.3) (14.8) (64.7)% Ttal Revenues 4,466.5 4,527.0 (1.3)% H1 2018 Results Presentatin / 9 May 2018 / Page 20
Ecnmic Sales evlutin By segment and activity ( m) H1 2018 H1 2017 Δ% Iberia 276.8 261.8 +5.7% Tbacc and Related 131.8 127.7 +3.1% Transprt 126.2 119.5 +5.6% Other Businesses 41.4 35.4 +17.2% Adjustments (22.6) (20.8) (8.5)% France 125.6 135.9 (7.6)% Tbacc and Related 105.0 114.5 (8.3)% Other Businesses 23.5 24.0 (2.0)% Adjustments (2.9) (2.6) (12.0)% Italy 142.1 112.5 +26.4% Tbacc and Related 142.1 112.5 +26.4% Crprate & Others 0.8 1.7 (55.3)% Ttal Ecnmic Sales 545.2 511.9 +6.5% H1 2018 Results Presentatin / 9 May 2018 / Page 21
Adjusted EBIT Evlutin By segment ( m) H1 2018 H1 2017 Δ% Iberia 56.5 46.8 +20.8% France 26.0 30.8 (15.4)% Italy 37.8 28.5 +32.9% Crprate & Others (6.2) (6.0) (4.2)% Ttal Adjusted EBIT 114.1 100.0 14.1% H1 2018 Results Presentatin / 9 May 2018 / Page 22
Balance Sheet ( m) 31 March 2018 30 September 2017 PP&E and ther Fixed Assets 205.8 206.0 Net Lng Term Financial Assets 6.8 6.1 Net Gdwill 920.8 925.7 Other Intangible Assets 528.2 547.8 Deferred Tax Assets 19.0 19.9 Net Inventry 1,121.5 1,122.6 Net Receivables and Others 1,908.0 1,791.0 Cash & Cash Equivalents 2,215.2 1,923.6 Ttal Assets 6,925.3 6,542.7 Grup Equity 469.2 500.6 Minrity Interests 1.8 1.9 Nn Current Liabilities 39.3 41.6 Deferred Tax Liabilities 285.6 299.0 Shrt Term Financial Debt 34.5 34.4 Shrt Term Prvisins 12.2 13.7 Trade and Other Payables 6,082.7 5,651.5 Ttal Liabilities 6,925.3 6,542.7 H1 2018 Results Presentatin / 9 May 2018 / Page 23
H1 2018 Results Presentatin 9 May 2018