Full-Year Results 2018/19 (year ended 31 March 2019) 6 June 2019
Introduction MARC HÉRIARD DUBREUIL PRESIDENT 2 Annual results as of 31 March 2019
2018/19: a record year Key figures ending March 2019 Proforma Proforma Change Pre-IFRS Post-IFRS Reported Organic* 15, 16 & 9 15, 16 & 9 €1,216.5m €1,125.9m • 7.9% 7.8% Sales €1,128.6m €1,038.8m • 9.9% 9.8% of which Group Brands €263.6m €264.1m • 11.3% 14.2% Current Operating Profit 21.7% +0.7pt +1.3pts 23.5% Current operating margin • 11.5% Net profit (Group share) €157.1 6.0% €159.2m • €167.8m €169.9m • 10.9% 16.3% Net Profit (excluding non-recurring items) €3.14 5.4% - €3.18 • Net earnings per share (Group share) Net earnings per share • €3.35 10.2% - €3.39 (excluding non-recurring items) 1.08 -0.40pt - 1.19 Net debt / EBITDA ratio: • 3 Annual results as of 31 March 2019 (*) Organic growth is calculated at constant currency and scope (proforma Pre-IFRS 15, 16 & 9)
Business review VALÉRIE CHAPOULAUD-FLOQUET CHIEF EXECUTIVE OFFICER 4 Annual results as of 31 March 2019
Excellent annual performance Group Brands sales up 9.8% in organic terms (+9.9% on a reported basis): • The House of Rémy Martin (+11.9%) fueled by remarkable growth across all geographical areas • Asia-Pacific continued strong growth in Greater China and the countries of Southeast Asia • Americas confirmed strong momentum, led by value share gains in the US • Total Group sales up 7.8% in organic terms (+7.9% on a reported basis) COP up 14.2% in organic terms (+11.3% on a reported basis): • Strong increase of the gross margin (+1.2pts*), led by the value strategy (solid price/mix gains) • Significant increase in strategic A&P and distribution costs (+10%) • Controlled increase in overhead • Negative currency effects • Current operating margin up 0.7pt to 21.7% (+1.3pts in organic terms) Reported net profit (ENRI) up 16.3% organically (+10.9% in reported terms) 5 Annual results as of 31 March 2019 (*) Organic growth is calculated at constant currency and scope (proforma Pre-IFRS 15, 16 & 9)
Sustainability : accelerating ! Terroirs… • Sustainable agriculture: A record year for Rémy Martin : over 94% of AFC’s winegrowing area engaged in HEV (High Environmental Value) programme, 42% have highest HVE 3 status. AFC represents over 90% of Charentes’s HVE 3 certified growers Sustainable agriculture also a priority for whiskies : Bruichladdich distillery & Domaine des Hautes Glaces are EU biodynamic certified, & for Cointreau an Orange certification process has been initiated with our suppliers • Biodiversity : We continue to work on Pedunculate Oak with the French ONF & on Quercus garyana with Westland in the US …People… • Responsible consumption: We reinforce our industry’s efforts in France by supporting the new “National Prevention plan against harmful alcohol consumption,” and we remain active, across ASEAN, with professional association APIWSA • Transparency: We just co- signed spiritsEUROPE’ s self– regulatory MOU with EU Health Commissioner Andriukaitis, committing to provide on-label nutritional & online ingredients information for enhanced transparency • Responsible employees: Our second worldwide “We Care Day” will take place next June 20th …and Time • Our global Eco-design programme is up and running, enabling us to monitor the environmental footprint of all new packages owing to a specific “Performance Index” • No plastic Policy : Just introduced a “No Plastic” policy on a worldwide basis • Awards: Rémy Cointreau was listed “GC Advanced” with UN’s Global Compact for the 5 th year; also 2019 winner of “Most Ethical Corporate Supply Chain” prize and ranked third in Ethifinance’ s Gaia classification 6 Annual results as of 31 March 2019
Group sales €m 1,216.5 1,127.0 1,125.9 7 Annual results as of 31 March 2019
Sales growth by product division 20% 15% 10% 5% 0% -5% -10% -15% -20% 8 Annual results as of 31 March 2019
Breakdown of Group Sales (1) By Division By Region €1,216.5m (proforma pre-IFRS) Americas 39% (=) Liqueurs & Partner Spirits Brands 23% (-1pt) 7% (-2pts) Europe/ Asia M. East/ Pacific Africa 34% (+3pts) 27% (-3pts) Rémy Martin 70% (+3pts) 9 Annual results as of 31 March 2019
Breakdown of Group sales Group Brands Rémy Martin Liqueurs & Spirits €851.9m €276.6m (proforma (proforma Pre-IFRS) Pre-IFRS) Americas Americas 40% (=) 42% (=) Europe/ Europe/ Asia M. East/ Asia M. East/ Pacific Africa Pacific Africa 13% (+2pts) 47% (-2pts) 44% (+2pts) 14% (-2pts) 10 Annual results as of 31 March 2019
Current Operating Profit Reported growth: +11.3% (€m) Volume/ Price/ Currency Others A&P Mix Mix +35.0 -19.6 -26.8 +44.9 263.6 264.1 -6.8 236.8 Organic +14.2% + €33.6m March 19 March 19 March 18 proforma Post IFRS COP/Sales: 21.0 % COP/Sales: 21.7% COP/Sales: 23.5% (Org: 22.3%) 11 Annual results as of 31 March 2019
Net profit (€m) Net profit Net profit Group share excluding non-recurring items Reported +10.9% Reported +6.0% +16.3% organic change +11.5% organic change 159.2 169.9 157.1 167.8 148.2 151.3 March 18 March 19 March 18 March 19 March 19 March 19 Post IFRS Proforma Post IFRS Proforma 12 Annual results as of 31 March 2019
House of Rémy Martin Organic sales growth of 11.9% (volumes +6.0%) • Sales Asia Pacific (in €millions) Strong growth, led by Greater China, • +3.2%* +13.2%* +11.9%* +10.0%* Southeast Asia and Travel Retail Asia 900 851.9 774.4 760.0 Americas 707.5 750 647.8 Strong momentum across the region; • 600 value gains in the US 450 EMEA 300 Russia, the United Kingdom, the Middle • East, Switzerland and France contributed to 150 the House’s performance 0 March March March March March 2016 2017 2018 2019 2019 Post Proforma IFRS * Organic growth (proforma Pre-IFRS 15) 13 Annual results as of 31 March 2019
Marketing initiatives Rémy Martin LOUIS XIII Limited Edition VSOP And App “ ARt by Rémy Martin” “Think a Century Ahead” campaign and With Matt W. Moore Smart Decanter Brand awareness and image “100 YEARS” parties around the world The ephemeral Houses of Rémy Martin Brand Education 14
House of Rémy Martin Current operating profit (€m) Reported growth: +15.3% Price/ Volume/ Currency Others A&P Mix Mix +27.0 -13.3 -21.5 +44.4 235.6 235.6 -5.3 204.4 Organic + 17.9% + €36.6m March 19 March 19 March 18 proforma Post IFRS COP/Sales: 26.9 % COP/Sales: 27.7% COP/Sales: 30.4% (Org: 28.3%) 15 Annual results as of 31 March 2019
Liqueurs & Spirits Organic sales growth of 4.0% (volumes -1.6%) • Cointreau Sales • Steady progress throughout the year, with “The Art of the (in €millions) Mix” campaign starting to bear fruit in H2 -1.5%* +1.3%* -1.0%* +4.0%* Metaxa 350 Slight decline in 2018/19, due to the brand’s accelerated • move upmarket; investments focused on Metaxa 12 Stars 276.3 276.6 300 273.9 266.8 264.4 St-Rémy 250 Good year, driven by the success of the “Cask Finish • 200 Collection” and the focus on its XO quality 150 Mount Gay • Mixed performance due to current brand repositioning 100 The Botanist 50 Double-digit growth across all regions; Success of • 0 #BeTheBotanist campaign March March March March March 2016 2017 2018 2019 2019 Post Whiskies Proforma IFRS • Excellent year thanks to the new #WeAreIslay marketing * Organic growth (proforma Pre-IFRS 15) campaign and the success of the new Port Charlotte bottle 16 Annual results as of 31 March 2019
Marketing initiatives: Cointreau LIMITED EDITION IN COLLABORATION WITH “THE MARGARITA LOVES COINTREAU” THE DESIGN LABORATORY OF CENTRAL CAMPAIGN SAINT MARTINS COLLEGE 17 Annual results as of 31 March 2019
Marketing initiatives New Port Charlotte bottle and St-Rémy METAXA #WEAREISLAY campaign French Chardonnay Cask Finish AEN CASK No2 18 Annual results as of 31 March 2019
Liqueurs & Spirits Current operating profit (€m) Reported decline: -9.4% Volume/ Price/ Currency A&P Others Mix Mix -5.5 +8.0 -7.2 42.8 +2.1 -1.4 38.8 38.8 Organic -6.0% - €2.6m March 18 March 19 March 19 proforma Post IFRS COP/Sales: 16.1 % COP/Sales: 14.0% COP/Sales: 14.7% (Org: 14.5%) 19 Annual results as of 31 March 2019
Partner Brands • Organic sales decline of -12.7% (volumes -19.7%) Sales decline mainly due to termination of • Sales (in €millions) new partner brand distribution contracts (€15M impact) -8.1%* -14.2%* -10.4%* -12.7%* 150 129.0 • In line with Group’s strategy of gradually refocusing on its proprietary brands 111.0 100.2 100 87.9 87.2 50 0 March March March March March 2016 2017 2018 2019 2019 Post Proforma IFRS * Organic growth (proforma Pre-IFRS 15) 20 Annual results as of 31 March 2019
Partner Brands • Current Operating Profit : €4.9m • COP decline is the consequence of the COP (in €millions) revenue evolution -72.4%* +175.7%* -7.2%* -22.9%* 8 6.1 6 5.3 4.9 4.9 4 2.0 2 0 March March March March March 2016 2017 2018 2019 2019 Proforma Post IFRS * Organic growth (proforma Pre-IFRS 15) 21 Annual results as of 31 March 2019
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