Analyst presentation H1 2017/18 Half year ended 30 September 2017, 16 November 2017
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. 2
1. Lucas Bols at a glance 2. Highlights H1 2017/18 3. Operational review 4. Financials H1 2017/18 5. Outlook 3
Lucas Bols at a glance Over 1 1 0 countries, 5 3 % Am sterdam 1 5 7 5 revenue outside W estern margin Europe 80.5 Emerging Markets Western Europe 13.4% 18.5% 23% 46.7% North 20.0% America 22.7% 19.9% 18.2 Asia-Pacific Revenue EBIT* €m > 2 5 brands €m 4 6 Bols liqueur FY 2 0 1 6 / 1 7 flavours % of total FY 2016/ 17 revenue Note *: EBIT is defined as ‘operating profit’ including ‘share of profit of joint ventures, net of tax’ 4
Strong offering of global brands and regional brands Revenue structure Regional brands Global brands Bols Liqueurs range Liqueurs Regional brands 29,8% 28.2% 70,2% Dutch Jenever portfolio White Spirits Italian Liqueurs 71.8% Global brands Passoã Value brands FY 2016/17 5
World-wide presence offers ample room for expansion in existing and new markets Group revenue per geographical segment based on FY 2016/17 North America Western Europe 20% 46,7% Asia-Pacific Emerging markets 19,9% 13,4% 6
Lucas Bols’ mission & strategic framework Mission Lucas Bols We create great cocktail experiences around the world . Strategic framework Lucas Bols Leverage Lead the Build the Accelerate global operational development of brand equity brand growth excellence the cocktail market • To strengthen and grow our global brands in the international cocktail market • To maintain the competitiveness of our regional brands in regional and local markets 7
1. Lucas Bols at a glance 2. Highlights H1 2017/18 3. Operational review 4. Financials H1 2017/18 5. Outlook 8
Highlights H1 2017/18 Revenue of € 48.8 million, an increase of 23.8% compared to last year (+0.5% organically) driven by Revenue Passoã which is performing well, in line with expectations Brand Global brands reported 34.8% higher revenue in H1 2017/18, with organic growth of 1.6%, while revenue performance at the regional brands was down 2.2% Emerging Markets showed good revenue growth (+9.8%) and North America was up 4.8%; Western Regional Europe reported 50.8% growth in revenue on the back of Passoã as well as organic growth of 4.0% performance Revenue in Asia-Pacific was down 3.3% as a result of phasing of shipments to Asia while the in-market depletions in the region showed growth Overall gross margin was up 190 bps to 62.2%, driven by Passoã and margin growth of the other global Gross margin brands EBIT EBIT increased 21.4% to € 13.8 million as a result of the inclusion of Passoã Net profit, excluding a one-off gain in H1 2016/17 was up 23.5% to € 8.7 million (reported net profit up Net Profit 12.4%) Dividend Interim dividend set at € 0.35 per share in cash (+12.9% compared to last year) 9
1. Lucas Bols at a glance 2. Highlights H1 2017/18 3. Operational review 4. Financials H1 2017/18 5. Outlook 10
Operational highlights H1 2017/18 Bols Liqueurs: low single digit revenue growth • Strong performance in retail markets Germany and UK • Market share growth in the USA • Implementation of drink strategies Bolsini (Bols liqueurs with sparkling wine) and Add Flavor to your Margarita • Continued expansion of distribution of new flavours Bols Genever and Damrak Gin: continued the positive growth trend • Bols Genever new brand identity and drink strategy finalized • Damrak Gin recorded strong growth in the USA and Italy • Bols Vodka negatively impacted by competition in Canada, while in Argentina and the Netherlands double digit growth was recorded 11
Operational highlights H1 2017/18 - continued Italian Liqueurs performed in line with last year • Galliano L’Aperitivo launched in around 20 markets • Introduction Galliano range in various new markets • Galliano Hot Shot is gaining momentum again in Sweden • New brand identity and label improvement Vaccari was launched in July The Passoã brand performed well, in line with expectations • Continued strong performance in the UK • Listings in 5 additional states in the USA • Strong promotional retail program implemented in core markets 12
Bols Genever – new brand identity and drink strategy The next level in building the Bols Genever brand with bartenders and consumers Bols Genever 100% Malt Spirit – launched in September 2017 Red Light Negroni – signature drink Bols Genever Ambassadors promoting Bols Genever in key cities around the world 13
Successful incorporation of Passoã • Successful incorporation of Passoã into Lucas Bols with the joint venture now fully operational • The commercial organization has taken over all distribution contracts and new agreements were signed • Lucas Bols USA has taken over Passoã from RC and will expand the distribution from 15 states to 35 states at the end of March 2018 • Strong new visual identity and campaign has been developed and implemented • Passoa results to date in line with expectations with strong growth in the UK and overall stabilization in the Benelux Market • Expansion to new markets expected in H2 of 2017/18 14
House of Bols Cocktail & Genever Experience Your best hour in Amsterdam After 10 years with nearly 500,000 visitors, the House of Bols was fully revamped in 2016/17 New brand awareness campaign was launched, resulting in a 10% increase in visitors H1 2017/18 vs last year 15
Lucas Bols USA Passoã - re-introduced the brand in the US - Launched in 5 additional states, to a total of 20 states - Expansion to 35 states in H2 2017/18 Bols Liqueurs Range - Add flavor to your Margarita Campaign Bols Genever - Red Light Negroni Damrak Gin - official gin of Delta Sky clubs starting 1 July 2017 14 million guests visit Delta Sky Galliano L’Aperitivo - successfully launched in various states Clubs in the US 16
Regional brands – operational highlights H1 2017/18 Dutch domestic portfolio • The decline in the Dutch domestic market is slowing down • We maintained our strong market share position in the Dutch Genever and Vieux segment Performance in other regions: continued good performance • In western Africa the positive revenue growth trend continued • Significantly lower concentrates sales in southern Africa • Expansion of distribution of Henkes Gin and Henkes Whisky 17
1. Lucas Bols at a glance 2. Highlights H1 2017/18 3. Operational review 4. Financials H1 2017/18 5. Outlook 18
Strong revenue and EBIT growth Highlights Reported Organic* Reported (* €million) H1 2017/18 H1 2016/17 growth growth Revenue increase of 23.8% compared to last year, driven by the Revenue 48.8 39.4 23.8% 0.5% Cost of sales -18.5 -15.6 18.0% 1.6% consolidation of Passoã (organically 0.5%) GROSS PROFIT 30.4 23.8 27.7% -0.2% Gross margin was up 190 bps to 62.2%, driven by Passoã as Gross margin % 62.2% 60.3% well as margin growth of the other global brands D&A expenses -16.8 -13.4 25.0% 6.5% EBIT increased 21.4% to € 13.8 million driven by the strong OPERATING PROFIT 13.6 10.3 31.1% -8.9% performance of Passoã Operating profit margin % 27.8% 26.2% Share of profit of JVs, net of tax 0.2 1.0 -78.6% -18.3% Finance costs increased as a result of the interest costs on EBIT 13.8 11.3 21.4% -9.1% “assumed debt” related to Passoã EBIT margin % 28.2% 28.8% Income tax increased as profits of Passoã are included and are Finance costs -1.8 -1.3 39.8% PROFIT BEFORE TAX 12.0 10.1 19.1% taxed at a higher tax rate in France Income tax expense -3.3 -2.3 41.9% PROFIT FOR THE PERIOD 8.7 7.8 12.4% € 0.62 Earnings per share € 0.70 12.4% * at constant currencies, excluding one-off items and Passoã 19
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