Analyst presentation 2018/19 Year ended 31 March 2019 Disclaimer - - PowerPoint PPT Presentation

Analyst presentation 2018/19 Year ended 31 March 2019

Disclaimer

DISCLAIMER THIS PRESENTATION may contain forward looking statements. These statements are based on current expectations, estimates and projections of Lucas Bols’ management and information currently available to the company. Lucas Bols cautions that such statements contain elements of risk and uncertainties that are difficult to predict and that could cause actual performance and position to differ materially from these statements. Lucas Bols disclaims any obligation to update or revise any statements made in this presentation to reflect subsequent events or circumstances, except as required by law. Certain figures in this presentation, including financial data, have been rounded. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures which precede them.

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FY 2018/19 1. Lucas Bols at a glance 2. Operational highlights 3. Financials 4. Outlook

3

Lucas Bols at a glance

4

18.5% 22.7%

EBIT* €m Revenue €m

19.9% 20.0% 13.4% 46.7%

Global brands delivering on strategic target with revenue growth of 3.5%

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18.5% 22.7%

EBIT* €m Revenue €m

19.9% 20.0% 13.4% 46.7%

More than half of the revenue from outside of Western Europe Global revenue split reflects strong growth in the US

6

Highlights FY 2018/19 - Route to market strengthened, credit facility improved and Avandis integration completed

7

Revenue Gross margin Net Profit Dividend Regional performance EBIT The overall gross margin was 59.2% (down 160 bps) as a result of geographic mix with higher shipments to lower margin markets and the introduction of Nuvo Normalised net profit came in at € 12.9 million; reported net profit amounted to € 16.6 million Proposed final dividend of € 0.25 per share, putting total full-year dividend at € 0.60 per share, equal to last year Normalised EBIT amounted to € 20.8 million, a decrease of 7.6% as a result of the lower gross margin. Currencies had a € 1.1 million negative impact on EBIT North America showed strong double-digit growth, driven by 20% revenue growth in the US, while Western Europe saw revenue decline by 3.9%. Asia-Pacific was in line with last year while Emerging Markets returned to growth on the back of a good performance in the second half year Revenue of € 92.5 million, an increase of 1.2% compared to last year (H2: +2.9%) Brand performance The global brands reported revenue growth of 3.5%, mainly driven by strong growth in the US, the UK and China, while the decline in revenue of the regional brands moderated to 5.9% due to improved trends in the second half of the year (H2: global brands +4.2%, regional brands -0.9%)

*The numbers presented on this slide are pre-IFRS and the comparisons are on an organic basis, i.e. at constant currencies and excluding one off items

FY 2018/19 1. Lucas Bols at a glance 2. Operational highlights 3. Financials 4. Outlook

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Clear strategy to capture the growth in the global cocktail market

9

Mission Lucas Bols

We create great cocktail experiences around the world.

Strategic framework Lucas Bols

• To strengthen and grow our global brands in the international cocktail market, aiming for an

average annual revenue growth of 3-4%

• To maintain the competitiveness of our regional brands in regional and local markets

Build the brand equity Lead the development of the cocktail market Accelerate global brand growth Leverage

• perational

excellence

Strengthening our route to market by substantial number of new and renewed contracts with existing and new partners

An important number of contract renewals, including in:

• China, South Korea, Hong Kong and Europe Travel Retail with the Edrington Group
• Japan with Asahi
• Australia and New Zealand with Beam Suntory
• Also in the UK, Ireland, Switzerland and Portugal contracts were renewed
• In Scandinavia and Germany the brands were consolidated with one distributor

Contracts with new distributors include:

• In Spain the portfolio was combined with one new distributor, focused on the on-trade
• In Canada contracts were signed with two new distributors

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Leading the development of the cocktail market

Educating and inspiring the bartender community with the Bols Bartending Academy

• Bols engages with the international bartender community to create new drinks and experiences

for their customers with its wide variety of products and flavours.

• The Bols Bartending Academy in Amsterdam and On Tour is important in educating and

inspiring bartenders. It strengthens the role of Lucas Bols as a leading authority on cocktails.

• Bols Business Class events were held in various locations in 2018/19. In Poland the event was

live-streamed globally, reaching bar owners and bartenders on a much broader scale.

• The 10th addition of Bols around the World, this year bar teams will compete to become the

world’s Best Bar team with a big finale in Amsterdam in June 2019. Create innovative drink strategies and act on upcoming trends around the world

• Lower alcohol trend: we have created a range of low-alcohol cocktails based on the Bols

Liqueurs range, like the Bols Waterlemon and the Bols Cucumber Tonic. Also Passoã has a great tasting low alcohol alternative with Passoã Fresh.

• Less sweet trend: introduction of the Bols Pink Fizz, made with Bols Pink Grapefruit liqueur.
• The Negroni trend: our own signature cocktail, the Bols Red Light Negroni made with Bols

Genever, the Original Spirit of Amsterdam.

11

Building the Bols brand further by inspiring bartender & bar

• wner events and signature drink strategies

12

The Bols brand with its distinct focus on the bartending community is clearly one of the leading brands in the global cocktail market. Key focus on a number of drink strategies like Bols Low Alcohol Cocktails, Bols Sprizz and our Add flavor to your margarita program. Revenue of the Bols Liqueurs range showed a mixed performance

• Continued growth in the US and accelerated growth in China and South Korea
• A decline in markets such as Japan and Germany

The focus for Bols Genever remains on key US cities

• Activation and expansion of the signature cocktail, the Red Light Negroni

Bols Vodka

• Showing continued growth in the Netherlands; fierce price competition is still negatively impacting the brand in Canada

On-trend activations and social media programs drive awareness and growth of Italian Liqueurs and Damrak Gin

13

Italian Liqueurs returned to growth, driven by both Galliano and Vaccari The Galliano range including Ristretto and L’Aperitivo, is fully on-trend

• Successful social media campaign in combination with expansion of distribution for Galliano

L’Aperitivo and Ristretto in the US

• The popularity of the Galliano Hot Shot is clearly growing in Scandinavia

Vaccari showed growth based on the successful expansion of distribution to new markets

• The new label design, better reflecting Vaccari’s authenticity, was successfully rolled out

Damrak Gin showed double-digit growth in both the Netherlands and the US

• The ongoing Global Gin Tonic trend supports growth of Damrak Gin, distilled in the heart of

Amsterdam and with it’s preferred citrus forward flavor profile

• The social media campaign ‘Ride like an Amsterdammer’ reached over 150,000 consumers in the US
• Damrak Gin was launched in South Korea and was also listed at the Formula 1 Singapore Grand Prix

14

Passoã and Nuvo contributed to the accelerated growth in the US

Passoã performed well, with mid-single-digit revenue growth mainly driven by growth in the UK, the US and the Netherlands

• Driven by distribution expansion to 45 states in the US and growth in the UK and the

Netherlands

• Menu listings at a growing number of on-trade national and regional chains and first retail

listings in the US

• Puerto Rico recovered and also contributed to growth
• Global distribution was expanded to over 50 countries
• The Passoã packaging was renewed with an upgraded design showcasing the natural passion

fruit that forms the base of the liqueur

• Accelerating growth with the signature cocktail, the Passoã Pornstar Martini and tapping into

the trend of low alcohol cocktails with Passoã Fresh Nuvo is successfully launched in the US

• The brand had to be rebuilt from scratch from production to distribution
• Initial focus on 10 states, targeting the Latin community
• A full-blown social media campaign, featuring a number of Latin artists,

resulted in over 300 million views

• First cases shipped to South America

Regional brands: Henkes in Africa back on track Important brand activations Dutch genever portfolio

15

Henkes

• Temporary import restrictions into Togo and Benin impacted Henkes revenue in the first half. After the restrictions were lifted in

the second half the Henkes business normalised again Dutch genever portfolio

• Revenue Dutch domestic genever/vieux portfolio was down in the first half year as a result of the declining market, although with

focused support and activations the trend improved in the second half of the year

• Two important brand activations in the second half of the year, targeting new consumer groups to gradually compensate for the

decline in the traditional young genever and vieux segment:

• The relaunch of the Dutch Bols genevers with ‘BOLS komt met een biertje’
• A restyling of the Bokma packaging and launch of Bokma 5-year-old Bourbon Cask

Strong performance US and China

Strong growth further strengthened market position in the US

• More than 20% growth in the US compared to last year
• Mainly driven by Passoã, Damrak Gin and the introduction of Nuvo
• Bols Liqueurs achieved low single-digit growth in a stable market

Positive market trends translated into significant growth in China

• Accelerated revenue and profit growth for Bols Liqueurs in China,
• utperforming the market
• Bols Liqueurs are in the top 3 of the liqueurs market in China
• The cocktail market in China is clearly developing with more and more

modern outlets popping up.

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Modernised headquarters supporting new way of working

At Lucas Bols we believe that strong brands are built by strong, healthy and motivated people. This means that

• ur top priority is to provide a culture of vitality and a

dynamic working environment.

• We have translated our new way of working principles into

the architecture and interior design of our new office.

• A flexible and agile way of working, with the latest

communication technology facilitating seamless cooperation around the world.

• An inspiring and stimulating working environment for

employees and young talent, fully equipped to conquer the world with a small team.

• The new office makes efficient use of space and is fit for

growth.

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Improved credit facility and successful integration Avandis

New credit facility at more favourable terms

• In the third quarter of the 2018/19 financial year Lucas Bols entered into a new € 130 million syndicated credit facility agreement
• Annual interest costs to be reduced by around € 0.4 million
• Leverage ratio covenant improved from 3.0x to 4.0x
• Increased operational flexibility to support the expected development of the business

Strengthening of Avandis through integration of Distillery Cooymans

• Operations of former Distillery Cooymans fully integrated into the Avandis operations in Zoetermeer
• All operational activities in Tilburg were terminated in December 2018 and the building was sold for

an attractive price in March 2019

• Ongoing modernisation of the Zoetermeer plant is supported, including the addition of a new can line
• Creating a leading North European spirits blending and bottling plant, safeguarding the production of

Lucas Bols products for years to come

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FY 2018/19 1. Lucas Bols at a glance 2. Operational highlights 3. Financials 4. Outlook

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Revenue up 1.2%

Highlights

Revenue amounted to € 92.5 million, up 1.2% up versus last year at constant currencies. Organically gross margin declined by 160 bps as a result of the geographical mix and the introduction of Nuvo. Normalised EBIT came in at € 20.8 million (€ 23.6 million in 2017/18), a decrease of 7.6% at constant currencies as a result of the lower gross margin. Currencies had a negative impact of € 1.1 million on EBIT. The normalised EBIT margin came in at 22.5% compared to 25.6% in 2017/18.

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* Excluding the impact of IFRS 15 and 16 Organic growth: at constant currencies, excluding one-off items

Reported (* €mil) FY 2018/19* FY 2017/18 Revenue 92,5 92,2 Cost of sales

• 37,8
• 35,1

GROSS PROFIT 54,7 57,1

Gross margin % 59,2% 62,0%

D&A expenses

• 36,1
• 34,5

% of revenues

• 39,0%
• 37,4%

OPERATING PROFIT 18,6 22,6

Operating margin % 20,1% 24,6%

Share of profit of JVs, net of tax

1,0 1,0 EBIT 19,6 23,6

EBIT margin % 21,2% 25,6%

Finance costs

• 3,7
• 3,5

PROFIT BEFORE TAX 15,9 20,1

Income tax

0,7 0,3 PROFIT FOR THE PERIOD 16,6 20,4

Earnings per share

1,33 € 1,64 €

59.2%

Global brands up 3.5%

Revenue development (in €m)

63.4% 44.5% 62.0%

Reported gross margin

Group revenue structure (FY 2018/19)

2.4 FY 2018/19

• 1.3

FY 2017/18 Δ Global Brands Δ Regional Brands

• 0.8

Δ FX 92.2 92.5 +0.3%

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* Excluding the impact of IFRS 15 and 16

Organic growth: at constant currencies, excluding one-off items

77% 23%

Global brands Regional brands

Revenue (* €m) FY 2018/19* FY 2017/18 Reported growth % Organic growth % Global brands 71,6

69,9

2,5% 3,5% Regional brands 20,9 22,3

• 6,4%
• 5,9%

Total

92,5 92,2

0,3% 1,2%

Revenue by region

Revenue development at constant currencies (in €m)

Western Europe

• Revenue down 3.9% organically
• For Global brands the UK and the Netherlands

achieved strong growth off-set by challenging retail environment in France, Belgium and Germany

• Regional brands were also impacted by

challenging retail markets in the Benelux and France

• Domestic genever/vieux portfolio trends returned

to normal levels in H2

49.6%

Western Europe

Asia-Pacific

• At constant currencies revenue was in line with

last year

• Mainly driven by accelerated growth in China
• Japan is showing a decline due to challenging

market conditions and related stock reductions

• Australia/New Zealand: low single-digit growth in

a stable market environment

Asia-Pacific

16.5%

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FY 2017/18 Δ Emerging Markets Δ North America

• 1.9

Δ Western Europe 0.6

• 0.1

Δ Asia- Pacific FY 2018/19 2.4

• 0.8

Δ FX 92.2 92.5 * Excluding the impact of IFRS 15 and 16

Organic growth: at constant currencies, excluding one-off items

Revenue (* €m) FY 2018/19* FY 2017/18 Reported growth % Organic growth % Western Europe 45,9 48,0

• 4,4%
• 3,9%

Asia - Pacific 15,3 16,2

• 5,7%
• 0,4%

North America 19,5 16,6 17,2% 15,0% Emerging Markets 11,8 11,3 4,5% 5,6% Total 92,5 92,2 0,3% 1,2%

Revenue by region

Revenue development at constant currencies (in €m) North America

• Positive growth trend continues with 15% organic growth
• 20% revenue growth in the US, mainly driven by Passoã

and Damrak Gin as well as by the introduction of Nuvo

• Bols Liqueurs continues to gain market share
• Lower revenue in Canada more than offset by growth of

Passoã in Puerto Rico North America Emerging Markets

• Revenue growth of 5.6% organically
• Continued growth in depletions in Russia and Poland at lower

shipment levels; rest of Eastern Europe in line with last year

• South America is showing growth. Positive impact of change

in route to market more than compensates the decline in Argentina

• The Caribbean recovered from last year’s hurricane impact
• Regional brands impacted by (temporary) import restrictions

In Western Africa which were lifted in the second half Emerging Markets

21.1%

12.8%

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* Excluding the impact of IFRS 15 and 16

Organic growth: at constant currencies, excluding one-off items

FY 2017/18 FY 2018/19 Δ FX

• 1.9

Δ Western Europe

• 0.1

Δ Asia- Pacific 2.4 Δ North America 0.6 Δ Emerging Markets

• 0.8

92.2 92.5

Revenue (* €m) FY 2018/19* FY 2017/18 Reported growth % Organic growth % Western Europe 45,9 48,0

• 4,4%
• 3,9%

Asia - Pacific 15,3 16,2

• 5,7%
• 0,4%

North America 19,5 16,6 17,2% 15,0% Emerging Markets 11,8 11,3 4,5% 5,6% Total 92,5 92,2 0,3% 1,2%

Gross profit margin influenced by country mix

55.1% 59.0% 71.5%

Gross profit development (in €m)

62.0% 59.2%

Reported gross margin

Gross margin development at constant currencies

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59.2% 1,3

• 0,6

Δ Asia- Pacific

• 1,7

Δ Emerging Markets

• 1,0

Δ FX FY 2018/19 Normalized Gross profit Δ North America

• 0,2

Δ Western Europe 57,1 55,3 54,7 FY 2017/18 One-offs

• 0,1
• 3,1%

46.2% 20.0% 21.0% 12.8%

Western Europe Asia Pacific North-America Emerging Markets

Group gross profit structure (FY 2018/19)

Total

• 160 bps

Western Europe

• 140 bps

Asia-Pacific

• 130 bps

North America

• 80 bps

Emerging Markets

• 450 bps

59.8%

21.2%

EBIT

EBIT development (in €m)

25.6%

Reported EBIT margin

30.6% 69.4%

Highlights Normalised EBIT came in at € 20.8 million, down 7.6% at constant currencies as a result of the lower gross margin. Currencies had a negative impact of € 1.1 million

• n EBIT.

The one-off items comprise:

• € 0.6 million net restructuring charge

at Avandis

• € 0.6 million advisory costs

The normalised EBIT margin came in at 22.5% compared to 25.6% in 2017/18.

• Excl. currency effects the decline was 220 bps.

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38.5%

• 0.7

Δ Global Brands

• 0.2

Δ Regional Brands

• 0.8

Δ Unallocated 23.6 19.6 Normalized EBIT

• 1.1

Δ FX 20.8

• 1.2

FY 2017/18 FY 2018/19 Δ One-offs

• 11.9%

39.7% 22.5%

Global brands

Highlights

At constant currencies the global brands were up 3.5%.

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* Excluding the impact of IFRS 15 and 16 Organic growth: at constant currencies, excluding one-off items

Gross profit came in at € 45.4 million. The gross margin was down 270 bps on an organic basis, impacted by negative geographic mix and the introduction of Nuvo with a lower than average gross margin. EBIT was down 2.3% year-on-year at constant currencies and excluding the one-off costs related to Avandis, while the EBIT margin came in at 38.5%. Currencies had a negative impact of € 0.9 million.

Regional brands

Highlights

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* Excluding the impact of IFRS 15 and 16 Organic growth: at constant currencies, excluding one-off items

Revenue of regional brands was down 5.9%, H2 showed improved trends. Gross profit decreased to € 9.3 million from € 10.2 million in 2017/18, in line with the revenue development. Organically the gross margin increased by 40 bps as a result of price increases in Africa. Excluding the one-off restructuring charge at Avandis and at constant currencies, EBIT was down 2.7% in 2018/19, while the EBIT margin was up 140 bps

• rganically.

Reported (* €m) FY 2018/19* FY 2017/18* Reported growth Organic growth Revenue 20,9 22,3

• 6,4%
• 5,9%

Cost of sales

• 11,6
• 12,1

GROSS PROFIT 9,3 10,2

• 9,2%
• 5,0%

Gross margin % 44,5% 45,9%

• 140bps

+40bps

D&A expenses

• 1,8
• 2,0
• 12,1%
• 12,1%

% of revenues

• 8,6%
• 9,1%

OPERATING PROFIT 7,5 8,2

• 8,5%
• 3,3%

Operating margin % 35,9% 36,8%

• 80bps

+100bps

Share of profit of JVs, net of tax

0,8 0,8 EBIT 8,3 9,0

• 7,5%
• 2,7%

EBIT margin % 39,7% 40,2%

• 50bps

+140bps

Reported (* €mil) FY 2018/19* FY 2017/18 Revenue 92,5 92,2 Cost of sales

• 37,8
• 35,1

GROSS PROFIT 54,7 57,1

Gross margin % 59,2% 62,0%

D&A expenses

• 36,1
• 34,5

% of revenues

• 39,0%
• 37,4%

OPERATING PROFIT 18,6 22,6

Operating margin % 20,1% 24,6%

Share of profit of JVs, net of tax

1,0 1,0 EBIT 19,6 23,6

EBIT margin % 21,2% 25,6%

Finance costs

• 3,7
• 3,5

PROFIT BEFORE TAX 15,9 20,1

Income tax

0,7 0,3 PROFIT FOR THE PERIOD 16,6 20,4

Earnings per share

1,33 € 1,64 €

Stable dividend to 2017/18 at € 0.60 per share

Highlights

The effective tax rate, excluding the one-off tax benefit, was 26.4% for the 2018/19 financial year (2017/18: 26.5%), above the Dutch nominal tax rate as profits of Passoã are taxed at a higher rate in France.

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Earnings per share (pre-IFRS 16) of € 1.33 (post-IFRS 16: € 1.32). Excluding one-off costs the earnings per share came in at € 1.03. Proposed final dividend of € 0.25 per share putting total full-year dividend at € 0.60 per share, equal to last year. A payout ratio of 58% Number of shares outstanding are 12,477,298

* Excluding the impact of IFRS 15 and 16 Organic growth: at constant currencies, excluding one-off items

Given the upcoming reduction in the Dutch corporate tax rate, a significant one-off gain of € 5.3 million was recognized in the second half of the year, related to the deferred tax liability. 2017/18 included a similar one-off tax benefit of € 5.6 million.

Reconciliation – profit for the period

Reported (* €mil) FY 2018/19* PROFIT FOR THE PERIOD 16,6

One-offs

• restructuring charge Avandis

0,6

• advisory costs

0,6

• amortiz. financing costs

0,4

• tax benefit
• 5,3

NORMALIZED PROFIT FOR THE PERIOD 12,9

Finance costs impacted by one-off of € 0.4 million accelerated depreciation of fees.

Reported (* €m) FY 2018/19 REPORTED IFRS 15 & 16 ADOPTION IMPACT FY 2018/19 PRE-IFRS Property, plant and equipment 10,4

• 7,1

3,3 Other non-current assets 315,0

• 315,0

NON-CURRENT ASSETS 325,4

• 7,1

318,3 CURRENT ASSETS 39,8

• 39,8

TOTAL ASSETS 365,2

• 7,1

358,1 Funded by equity and liabilities EQUITY 192,2 0,1 192,3 Loans and borrowings 47,6

• 47,6

Employee benefits 0,3

• 0,3

Deferred tax liabilities 40,0 0,0 40,0 Other non-current liabilities 76,4

• 6,6

69,9 NON-CURRENT LIABILITIES 164,4

• 6,5

157,9 Loans and borrowings 7,6

• 7,6

Other current liabillities 1,1

• 0,6

0,4 CURRENT LIABILITIES 8,6

• 0,6

8,0 TOTAL LIABILITIES 173,0

• 7,2

165,9 TOTAL EQUITY AND LIABILITIES 365,2

• 7,1

358,1 Reported (* €mil) FY 2018/19 REPORTED IFRS 15 & 16 ADOPTION IMPACT FY 2018/19 PRE-IFRS Revenue 87,0 5,5 92,5 Cost of sales

• 37,7
• 0,1
• 37,8

GROSS PROFIT 49,3 5,4 54,7

Gross margin % 56,6% 59,2%

D&A expenses

• 30,6
• 5,5
• 36,1

% of revenues

• 35,2%
• 39,0%

OPERATING PROFIT 18,6 0,0 18,6

Operating margin % 21,4% 20,1%

Share of profit of JVs, net of tax 1,0 0,0 1,0 EBIT 19,6 0,0 19,6

EBIT margin % 22,6% 21,2%

Net finance costs

• 3,9

0,2

• 3,7

PROFIT BEFORE TAX 15,7 0,1 15,9 Income tax 0,7 0,0 0,7 PROFIT FOR THE PERIOD 16,5 0,1 16,6

IFRS 15 and 16 impact

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Balance sheet

Highlights

30

Other non-current liabilities include an assumed debt of € 69.3 million related to the call/put option related to Passoã The net debt to EBITDA ratio is 3.4. The net debt to EBITDA ratio including assumed debt was 4.8 Net working capital € 18.5 million, given temporary higher inventories and receivables

Reported (* €m) FY 2018/19 FY 2017/18

Intangible assets 306,8 306,9 Investments in joint ventures 7,6 7,4 Other 11,0 2,6 NON-CURRENT ASSETS

325,4 316,9

Cash and cash equivalents 21,2 12,4 Net working capital 18,5 14,4 Inventories Trade and other receivables Other 0,0 0,1 TOTAL CURRENT ASSETS

39,8 26,9

TOTAL

365,2 343,8

Funded by equity and liabilities EQUITY

192,2 183,6

Loans and borrowings 47,6 43,9 Employee benefits Deferred tax liabilities 40,0 43,1 Other 77,4 68,8 NON-CURRENT LIABILITIES

165,0 155,8

Loans and borrowings 7,6 4,0 Trade and other payables Derivative financial instruments 0,4 0,4 CURRENT LIABILITIES

8,0 4,4

TOTAL LIABILITIES

173,0 160,2

TOTAL

365,2 343,8

Reported (* €m) FY 2018/19 FY 2017/18

Deferred tax assets 3,3 5,3 Deferred tax liabilities

• 43,2
• 48,4

Total deferred tax

• 40,0
• 43,1

Highlights

31

1.2

CAPEX FOCF FY 18/19 Operating profit FY 2018/19*

0.7

Depreciation

• 1.9
• 2.9
• 0.2

Income tax

• 4.4

Working capital Dividends from JVs

18.6 11.0 18.7

Other FOCF FY 17/18

• 41.0%

Cash flow development (in €m)

Cash flow was temporarily impacted by catch up on income tax payable in France (€ 1.7 million), one-

• ffs € 1.2 million as well as CAPEX investments in
• ur headquarters (€ 1.4 million)

Cash flows were used to pay dividends (€ 7.5 million)

* Excluding the impact of IFRS 15 and 16 18.7

• 1.4
• 1.2

FOCF FY 17/18 Δ EBITDA (recurring) One-offs

• 1.4

FOCF 18/19* Δ CAPEX Other Δ Income tax

• 2.7

Δ Working capital

0.7

FX

• 1.1

11.0

• 0.6

Cash flow

Cash conversion FOCF vs last year

32 JPY exchange rate USD exchange rate AUD exchange rate GBP exchange rate

• 53.1% of revenue is denominated in foreign

currencies in FY 2018/19 (compared to 49.7% in FY 2017/18)

• Lucas Bols has a policy of hedging 60 - 80% of its

net cashflows in foreign currencies at the start of the financial year

• In FY 2018/19, as a result of the stronger euro,

foreign currencies had a negative impact of € 0.8 million on revenue and € 1.1 million on EBIT

• Taking into account the foreign currency positions

already hedged and assuming the current level of the euro, foreign currencies are expected to have a broadly neutral impact on EBIT in the 2019/20 financial year

Important aspects of Lucas Bols’ currency effects

FY 2018/19 1. Lucas Bols at a glance 2. Operational highlights 3. Financials 4. Outlook

33

Outlook

• Despite the geopolitical uncertainty and volatility that characterises current times, the underlying market dynamics in the global

cocktail market remain healthy.

• At Lucas Bols we want to add flavour to the world and to provide great cocktail experiences. We will continue to activate and

grow our global brands in line with our strategy, with innovative drink concepts and by acting on upcoming trends around the

• world. We will further capitalise on the growth of our global brands in the US and China by further strengthening our market

position.

• The retail markets in Western Europe are likely to remain challenging, continuing to impact the performance of the regional

brands.

• We see upward pressure in our raw material and logistics costs, which we aim to offset by premiumisation and revenue

management initiatives while prudently managing the indirect cost base.

• Foreign currencies are expected to have a broadly neutral impact on EBIT in the 2019/20 financial year.
• Operating free cash flow and Capex are expected to return to normal levels, effective tax rate expected to be around 25%.
• We will continue to monitor potential add-ons of brands which can be integrated into our production and distribution platform.

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