Analyst presentation annual results 2014/15 Year ended 31 March 2015 24 June 2015
Disclaimer DISCLAIMER THIS PRESENTATION may contain forward looking statements. These statements are based on current expectations, estimates and projections of Lucas Bols¹s 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
Management Huub van Doorne Joost de Vries CEO CFO Led the 2006 buy-out Joined in the 2006 buy-out 25 years spirits industry experience 9 years spirits industry experience 3
1. Lucas Bols at a glance 2. Highlights 2014/15 3. Financials 2014/15 4. Foreign exchange rate 5. Outlook
Lucas Bols at a glance Over 110 countries, 77.7 Amsterdam margin 54% revenue outside Highlights 1575 Western Europe Emerging 22.1 1) Markets Western Free cash flow 2) € 22.3m • Europe 28% 12.9% North America Cash conversion 3) 74.7% • 18.5% 45.9% Revenue Operating Leverage ratio 2.6 • € m profit € m 22.7% 24 brands, € 78m revenue Bols Liqueur € 22m operating Asia-Pacific range 39 flavours profit % of total FY 2014/15 revenue Note 1: Excluding IPO costs Note 2: Free cash flow is defined as Operating Profit net of investing activities, taxes paid (normalised) and change in Operating Working Capital (Inventories + Trade receivables – Trade payables); 5 Note 3:Cash conversion defined as operational FCF / EBITDA; operational FCF defined as EBIT x (1 - statutory tax rate) + D&A - ∆ Oper ating Working Capital (Inventories + Trade receivables – Trade payables) – Capex
Global footprint in over 110 countries with 54% of revenue outside Western Europe with growth in Asia-Pacific and Emerging Markets Revenue in € m Operating profit in € m 2) Group revenue and operating profit Group revenue per geographical segment North America Western Europe Group revenue structure 1) (FY 2014/15) Emerging Markets 12.9% North Western America Europe 18.5% 45.9% 22.7% Asia-Pacific Emerging Markets Asia-Pacific Note 1: as % of total Group revenue Note 2: excluding IPO costs 6
Lucas Bols ’ mission & strategic framework Mission Lucas Bols We aim to create great cocktail experiences around the world . Strategic framework Lucas Bols 1 2 3 4 Lead the development of Accelerate global brand Leverage operational Build the brand equity the cocktail market growth excellence • 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 2014/15 3. Financials 2014/15 4. Foreign exchange rate 5. Outlook
Solid performance in FY 2014/15 1) Revenue of € 77.7 million in line with last year (at constant currencies) Revenue Gross Gross margin organic increase with 60 bps to 61% Margin % Operating Operating profit of € 22.1 million up 7.7% organically over last year Profit Free cash flow of € 22.3 million, in line with last year FCF Net Profit Net profit for the year is € 3.8 million, versus € 0.2 million in FY 2013/14 Net debt significantly reduced to € 61.2 million, with leverage ratio at 2.6 Net Debt YTD 2015/16 2015/16 YTD: Revenue in line with last year with a slightly higher gross margin Note 1: Excluding IPO costs 9
Highlights regions in FY 2014/15 • Slow recovery in the economy - consumers looking for a quality on-trade experience leading to higher demand for cocktails and spirits such as vodka and gin. Western • Global brands achieved double-digit growth in the Netherlands, in regional brands, market share in the Netherlands Europe further strengthened in a still declining market. • Strong performances in Scandinavia and Italy, challenging retail market conditions in the UK and Belgium. • The weakening of the Japanese Yen impacted results. • Asia-Pacific Organically, China and Japan achieved strong growth. • Weak market performance and one-off stock reductions in South East Asia. • The transition of the distribution of Bols Liqueurs to Lucas Bols USA was completed. North • Deliberate price-structure adjustment negatively impacted revenue. America • Second half however showed a significant improvement versus first half. • A vibrant cocktail culture is developing in the Emerging Markets which Lucas Bols can capitalise on. Emerging • Weak Russian Rouble and political instability impacted results. Markets • Latin America and Africa achieved strong growth. 10
1. Lucas Bols at a glance 2. Highlights 2014/15 3. Financials 2014/15 4. Foreign exchange rate 5. Outlook
Corporate P&L 2014/15 Reported Organic REPORTED (* € million) ¹ FY 2014/15 FY 2013/14 growth growth Revenue 77,7 78,7 -1,3% -0,5% Cost of Sales (30,8) (31,1) GROSS PROFIT 46,9 47,6 -1,4% 0,5% 60,4% 60,4% D&A Expenses (24,8) (26,1) 31,9% 33,1% OPERATING PROFIT 22,1 21,5 2,7% 7,7% 28,4% 27,3% Note 1: Excluding IPO costs 12
Revenue development global and regional brands Revenue development (in € m) Gross margin Group revenue structure (FY 2014/15) 78.7 (0.2) Regional (0.2) brands (0.6) 30.7% 77.7 69.3 % Global brands Group revenue structure (FY 2013/14 ) Regional brands 30.8% Δ Δ FY 2013/14 Global brands Regional brands Foreign exchange effect FY 2014/15 69.2% Global brands 60.4% 64.8% 50.3% 60.4% 13
Revenue development per geographical segment Revenue development (in € m) Revenue structure (FY 2014/15 ) Emerging 78.7 Markets 12.9% (0.8) North Western 0.3 45.9% America 0.6 (0.6) 18.5% (0.6) Europe 77.7 22.7% Asia-Pacific Revenue structure (FY 2013/14 ) Emerging Markets 12.5% North America 18.1% Western 46.2% Europe Δ Δ Δ Δ FY 2013/14 FY 2014/15 Asia- North Emerging Foreign Western Pacific America markets exchange effect Europe 232% Asia-Pacific 14
Gross profit development per geographical segment Gross profit development (in € m) Gross margin Gross margin development at constant currencies 0.3 47.6 (0.5) 0.3 Western Europe +140 bps 0.1 (0.9) Asia Pacific +50 bps 46.9 North America -120 bps Emerging Markets -120 bps Δ Δ Δ Δ FY 2013/14 FY 2014/15 Asia- North Emerging Foreign Western Pacific America markets exchange effect Europe 54.4% 72.5% 56.6% 60.4% 60.4% 65.6% 15
Operating profit development global and regional brands Operating profit development (in € m) Operating margin Operating profit structure (FY 2014/15) 0.2 (0.3) Regional (1.1) brands 1.8 22.1 30.4% 21.5 Global 69.6 brands Operating profit structure (FY 2013/14) Regional brands 31.4% Δ Δ Δ FY 2013/14 Global brands Regional brands Foreign exchange effect FY 2014/15 Overhead 68.6% Global brands 41.9% 28.4% 27.3% 42.4% 16
Ongoing margin improvement at constant rates 1) % of organic revenue Company Global Brands Regional Brands Delta FY 2013/14 - FY 2014/15 Gross Margin +60 bps +50 bps +70 bps Operating Margin +230 bps +340 bps +130 bps Drivers for strengthened operating margin Gross margin improvement in Western Europe Optimised investment in Advertising & Promotion Lowered investment in Russia due to political situation Decreased logistic costs, following new multiple year contract Note 1: Excluding IPO costs 17
Share of profit of JV’s REPORTED (* € million) ¹ FY 2014/15 FY 2013/14 Highlights Revenue 77,7 78,7 € 0.2 million release of employee benefits liability Cost of Sales (30,8) (31,1) in Maxxium NL in FY 2013/14 GROSS PROFIT 46,9 47,6 60,4% 60,4% Challenging market circumstances in India in D&A Expenses (24,8) (26,1) FY 2014/15 31,9% 33,1% OPERATING PROFIT 22,1 21,5 28,4% 27,3% Share of profit of JV, net of tax 0,1 0,5 EBIT 22,2 22,0 28,5% 28,0% Finance costs (15,7) (19,4) PROFIT BEFORE TAX 6,5 2,6 Income tax expense (2,7) (2,4) PROFIT FOR THE PERIOD 3,8 0,2 Note 1: Excluding IPO costs 18
Post IPO significantly lower finance costs REPORTED (* € million) ¹ FY 2014/15 FY 2013/14 Revenue 77,7 78,7 Cost of Sales (30,8) (31,1) GROSS PROFIT 46,9 47,6 60,4% 60,4% Finance costs ¹ Pre IPO Post IPO Normalised (* € million) Apr-Jan Feb-Mar FY 2014/15 FY 2013/14 D&A Expenses (24,8) (26,1) 31,9% 33,1% Senior debt & Mezzanine 7,8 0,5 8,3 11,5 OPERATING PROFIT 22,1 21,5 Cum. preference shares 6,6 0,0 6,6 7,0 28,4% 27,3% Amortisation fees 0,8 0,0 0,8 0,9 Share of profit of JV, net of tax 0,1 0,5 Total 15,2 0,5 15,7 19,4 EBIT 22,2 22,0 28,5% 28,0% Annualised 18,2 3,0 Finance costs (15,7) (19,4) Debt 184,5 61,2 61,2 184,2 PROFIT BEFORE TAX 6,5 2,6 Income tax expense (2,7) (2,4) PROFIT FOR THE PERIOD 3,8 0,2 Note 1: Excluding IPO costs 19
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