joint venture operated by Lucas Bols 14 October 2016 Disclaimer - PowerPoint PPT Presentation

Lucas Bols and Rémy Cointreau create Passoã joint venture operated by Lucas Bols 14 October 2016

Disclaimer DISCLAIMER THIS PRESENTATION may contain forward looking statements. These statements are based on current expectations, estimates and projections of Lucas Bols´s 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

Lucas Bols N.V. has reached agreement with the Rémy Cointreau Group (“ Rémy Cointreau”) regarding the formation of a joint venture which will operate and further develop the global activities of the iconic Passoã brand 3

Key transaction parameters  Rémy Cointreau will contribute the full Passoã activities, including distribution, manufacturing, trademarks and inventory and Lucas Bols will contribute working capital and its know-how and expertise in the liqueur and cocktail business JV contribution  The joint venture will be France based and is expected to generate revenues of around €18 million on a full year basis, with EBIT margins in line with Lucas Bols ’ global brands  Lucas Bols will assume full operational and financial control over the brand Transaction  Lucas Bols will consolidate the full financials of the joint venture into its accounts, the results will be fully attributable to the structure shareholders of Lucas Bols, net of interest on debt assumed  Lucas Bols shall fund the joint venture’s working capital requirements which amount to, at the establishment of the joint venture, €5 million. The working capital commitment is funded via existing bank facilities Financial impact  The joint venture is expected to realize an increase of around 20% in the earnings per share for Lucas Bols on a full year basis (based on the 2015/16 result) Closing  The transaction is expected to close before the end of 2016  In due time, the joint venture could lead to the acquisition by Lucas Bols of all shares in the joint venture, for which funding Next steps has been secured 4

Background Passoã

Passoã overview Product impression Passoã is the original Passion Fruit liqueur with a bright pink colour in a signature black bottle Passoã has a strong position in the Western-European off-trade segment and is an important ingredient for a wide range of cocktails Attractive financial performance with a strong EBIT margin and a strong cash conversion Renowned high quality brand with upside potential further enhancing the strength of Lucas Bols´ global brands portfolio Flexible, scalable and asset light business model with potential for innovation and expansion to new markets 6

Background Passoã  Passoã is the first and original Passion Fruit liqueur, at 17% alcohol volume, in a signature black bottle  In 1986, the Master Distiller of Cointreau brought a surprising fruit from a trip to Brazil: the maracuja (passion fruit) History  The fruit's distinctive flavours enthralled him. He took inspiration from it and created Passoã, a singular liqueur made with passion fruit juice from Brazil 7

Background Passoã  Recognizable bottle with distinctive eye-catching colours The Brazilian inspired product design enables the bottle to stand out on the retailer’s shelves  Positioning  Passoã may be consumed on its own or combined with other drinks for cocktails and long drinks. The brand thereby adds to Lucas Bols ’ mission to create great cocktail experiences around the world 8

Background Passoã On- and off-  Passoã has experienced recent successes in the on-trade environment in various markets, including the UK trade brand  Largest Passoã market is Western-Europe with main markets France, the Netherlands, Belgium and the United Kingdom with global  presence Most important markets outside Western-Europe are Japan, Puerto Rico and the United States Puerto Rico * Passoã presence 9

Strategic rationale

Strategic rationale Lucas Bols Passoã’s added value to Lucas Bols Passoã fits within strategic ambition to broaden portfolio of premium and super-premium global brands 1 Passoã will increase distribution power and positioning in several core markets, and strengthen the in-house distribution platforms in 2 the US Lucas Bols can further build the Passoã brand based on the recent successes of Passoã in the on-trade environment and benefitting 3 from the global presence of the Bols Liqueurs range and Galliano The joint venture facilitates Lucas Bols ’ asset light business model 4 Source: Lucas Bols, Kempen & Co analyses 11

Addition to global brands portfolio 1 Global brands Regional brands White Spirits Regional Liqueurs Value brands Bols Liqueurs Range Pro-forma combined revenue structure (FY 2015/16) 20% Italian Liqueurs Passoã Traditional Jenever €91m 56% 25% Global brands 76% Passoã Revenue (€m) Revenue (€m) Regional brands 68 55 ~18 54 24 24 22 50 FY2013/14 FY2014/15 FY2015/16 FY2013/14 FY2014/15 FY2015/16 Source: company input and reports, Kempen & Co analyses 12

Revenue development by brand and region 2 Lucas Bols stand-alone Pro-forma combined Observations (FY 2015/16 revenue) (FY 2015/16 revenue) 24% Strong increase in revenue for the high margin 31% global brands segment €73m €91m 69% Improved market position in several large Western- 76% European markets like France, Belgium, the UK and the Netherlands Global brands Regional brands Increased exposure to Western-Europe although 11% 12% better balanced between countries resulting in 16% decreased exposure to the Dutch market 21% 47% €73m €91m 56% 17% Increased distribution power in several core markets 19% due to additional Passoã volume Western Europe Asia-Pacific North America Emerging Markets 13

Building the Passoã brand 3 BOLS Liqueurs White spirits Italian liqueurs Passoã BOLS Vaccari BOLS Vodka Damrak Gin Galliano Genever Sambuca Lucas Bols can further build the Passoã brand based on the recent successes of Passoã in the on-trade environment in various markets like the UK As Passoã is currently sold in over 40 countries, there are opportunities for distribution expansion into new markets, building on the global presence of the Bols Liqueurs range and Galliano Passoã can benefit from the positioning of Bols Liqueurs as the number one brand for the international cocktail market and from Lucas Bols active marketing towards the bartending community 14

Joint venture facilitates Lucas Bols ’ asset light business model 4 Lucas Bols business model Lucas Bols will further develop the Passoã brand through close collaboration with the 1 1 bartender network Passoã can benefit from Lucas Bols ’ expertise, knowledge, and innovation track Product Distribution 2 record in the liqueurs market while the joint venture structure secures the existing development 5 knowhow and experience built by the Rémy Cointreau organization 2 Production will remain at Rémy Cointreau’s production facilities in Angers 3 Distillation of Sales and the heart of the marketing products The joint venture will require a limited increase in overhead mainly related to 4 Production additional marketing & sales staff (blending and bottling) 4 3 Passoã’s existing distribution network has significant overlap with Lucas Bols’ current network 5 Direct transfer of US distribution activities to Lucas Bols USA Lucas Bols in-house Partnerships Combination in-house and partnerships 15

Deal structure

Deal characteristics  Lucas Bols will assume full operational control and will perform day to day management of the joint venture and Operational run the Passoã brand in the ordinary course of business control  Lucas Bols will consolidate the full financials of the joint venture into its accounts and the results will be fully Consolidation attributable to the shareholders of Lucas Bols, net of interest on debt assumed  Taxable income from Passoã, generated in the French entity, will be subject to 35% French corporate income Taxes tax (assumed that accrual of interest will not be tax-deductible)  In due time, the joint venture could lead to the acquisition by Lucas Bols of all shares in the joint venture Next steps 17