Stock Spirits Group PLC H1 2016 Results
10 August 2016
Disclaimer
This presentation has been prepared by Stock Spirits Group PLC (“Stock Spirits Group” or the “Group”). By attending the meeting where the presentation is made, or by reading the presentation slides, you agree to be bound by the following conditions.
This presentation contains forward looking statements, which are based on the Stock Spirits Group Board's current expectations and assumptions and may involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statement typically contain words such as “anticipate”, “assume”, “believe”, “expect”, “plan”, “intend” and words of similar substance. The forward looking statements contained in this presentation are based on past trends or activities and should not be taken as a representation that such trends or activities will continue in the future. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to: conditions in the market, market position of the companies comprising the Stock Spirits Group, earnings, financial position, cash flows, return on capital and operating margins, anticipated investments and economic conditions; the Group's ability to obtain capital/additional finance; a reduction in demand by customers; an increase in competition; an unexpected decline in revenue or profitability; legislative, fiscal and regulatory developments, including, but not limited to, changes in environmental and health and safety regulations; exchange rate fluctuations; retention of senior management; the maintenance of labour relations; fluctuations in the cost of raw material and other input costs; and operating and financial restrictions as a result of financing arrangements. Accordingly, readers should not place undue reliance on forward looking statements due to the inherent uncertainty herein.
No statement in this presentation is intended to constitute a profit forecast, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for the Group. Each forward looking statement relates only as of the date of the particular statement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the Market Abuse Regulation, the London Stock Exchange or otherwise by law, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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2
David Maloney
Chairman
Group Overview
Agenda
SECTION PRESENTER
Group Overview David Maloney
(Chairman)
Business Review Mirek Stachowicz
(CEO)
Financial Results Lesley Jackson
(CFO)
Concluding Remarks Mirek Stachowicz
(CEO)
Q&A
4
2016 Interim Results Summary
5
• Positive trading performance with Adjusted EBITDA growth in all markets
− Group Net Sales of €116.0m, an increase of 7.3% on H1 2015
− Adjusted Group EBITDA of €17.9m, an increase of 65.9% on H1 2015
• Signs of stabilisation in Poland in H1 2016
− Early signs of positive results in volume and value
− Net Sales up 15.7% to €60.7m and Adjusted EBITDA up 64.8% to €15.1m
• Cash generation continues to be strong
− Special dividend of 10 pence per share paid in July (€0.1190 per share)
− Interim dividend of €0.0227 taking total dividends to be paid in CY 2016 to €0.1872 per share
− Reduction in balance sheet leverage
• Minimal impact on the business from Brexit
• Full management teams now in place in all markets
• Mirek Stachowicz announced as CEO
Update on Strategic Review Good progress to date with further work to go
6
Return Poland
to sustainable
growth
Net Sales and Adjusted EBITDA growth in H1 2016
Introduced strategic pricing regime on certain products to increase market competitiveness
Experienced management appointed in Poland to oversee next phase of growth
June saw both volume and value market share gains following initiatives in H1
Optimise return
on all assets
Review of Group cost base has identified a number of initiatives
− Head office review – closure of Swiss office
− Re-tendering of key professional services contracts
− Further work to be done in H2 2016 once we are satisfied with the trajectory in Poland
M&A and
business
development
While we focus on the Polish turnaround, significant M&A transactions are on hold
We continue to review smaller strategic bolt-on acquisitions that can grow shareholder value
New distribution agreements with Distell and Synergy strengthen Stock’s brand platform
Shareholder
returns
Strong cash generation in H1 2016 has enabled a special dividend to shareholders of 10 pence
per share
Shareholders will receive total dividends of €0.1872 in CY 2016
Stock will continue a policy of targeting an annual dividend of 35% of Group Net Free Cash Flow
Mirek Stachowicz
Chief Executive Officer
Business Review
Poland Vodka Market Gradual overall market recovery
8
Total vodka market trend (%)
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Jun2015
Jul2015
Aug2015
Sep2015
Oct2015
Nov2015
Dec2015
Jan2016
Feb2016
Mar2016
Apr2016
May2016
Jun2016
% M
AT
Tre
nd
1
Value Volume
• Encouraging signs of a
gradual recovery with the
rate of MAT volume
decline reduced
• Total vodka volume
growth June YTD of
+2.5% vs a weak prior
comparable period
+0.6%
-0.03%
+2.9% YTD Value % Change
Source: Nielsen, total Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value MAT.
1. % MAT Trend represents the change in MAT vs the prior comparable period.
+2.5% YTD Volume % Change
9
Poland Market Share Trends Market Trends by Channel
• Traditional Trade
channel remains our key
focus area and continues
to dominate Poland
• Overall, percentage of
total vodka volume by
the traditional trade
channel has grown in
2016
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jun
20
13
Jan
20
14
Jun
20
14
Jan
20
15
Jun
20
15
Jan
20
16
Jun
20
16
6.4% 5.8%
9.8% 9.7%
19.6% 19.1%
64.3% 65.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
YTDJun 2015
YTDJun 2016
Discounters
Supermarkets
Hypers
Traditional Trade
Share of total vodka volume by trade channel over time (%)
Source: Poland, total off trade, total vodka (defined as sum of clear vodka, flavoured vodka and vodka based flavoured liqueurs) volume YTD June 2016 with a coverage factor
of 1.18 applied to the traditional trade to reflect its true scale.
Note: From comparisons to IWSR shipments data, Management believe that it is under reported in the Nielsen survey.
Poland Mainstream Vodka Pricing Trends
10
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
Jul2015
Aug2015
Sep2015
Oct2015
Nov2015
Dec2015
Jan2016
Feb2016
Mar2016
Apr2016
May2016
Jun2016
Dis
co
un
t to
Z. D
e L
uxe
(%
)
Zubrowka R (Roust) Krupnik R (Marie Brizard)
-3.0%
-1.2%
Competitor brand prices relative to Zoladkowa De Luxe
Jul-15 Dec-15 Jun-16
Zubrowka R (Roust) -5.6% -6.4% -3.0%
Krupnik R (Marie Brizard) -3.1% -3.5% -1.2%
Source: Nielsen, Total Traditional Trade, average price per litre (PLN) in 50cl, Total Vodka.
Competitor brand prices relative to Zoladkowa De Luxe • Traditional Trade price
differential has narrowed
against directly
competitive brands
following pricing
initiatives implemented in
H1 2016
Poland Update
11
• Local management appointments in June 2016
− New Managing Director, Marek Sypek, with experience in private equity and
senior positions in FMCG corporates in Central and Eastern Europe
− New Sales Director, Piotr Dziarski with FMCG and alcoholic beverage industry
experience
• Our relationships with customers are improving
− Targeting traditional trade which experienced market volume growth of 4.5%
YTD vs the prior comparable period1
• Focus remains on improving sales performance of Poland
− Good progress made in 2016 YTD
− Update on ‘Root and Branch’ review
Marek Sypek
Piotr Dziarski
1. Total Poland, total off trade, total vodka, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume by month to June
2016, sourced from Nielsen.
Poland ‘Root and Branch’ review Recap on actions being taken
12
Increase
Traditional store
coverage
Fair share of
Discounter
channel
Reallocate
resources to drive
returns
Supporting
Wholesalers
Competitive
pricing of core
brands
Expand product
portfolio
Strengthen
consumer
insight
Refocus & retrain
sales teams
Adapt route to
customer
Good progress made in H1 2016 on several areas
Actions well underway
Actions initiated
H2 2016 / 2017 opportunities
Eliminate waste
Customer &
margin
management tools
Poland ‘Root and Branch’ review Update on H1 2016 progress
13
Narrow down the price differential through trade promotions so
that customers can provide a more compelling shelf-price
proposition vs key competitors
Strategic reallocation of A&P spend across the Group to focus
investment on implementing competitive pricing in Poland
across key brands and throughout key sales channels
Sales teams are working with selected, priority trade partners to
achieve the proper brand positioning and strategy for our
brands in the market with particular focus on the traditional
trade channels
Improve the merchandising presence in the currently covered
retail universe and cover additional stores by changing the
sales force priorities during the sales call and redesigning the
sales routes
Competitive
pricing of core
brands
Supporting
Wholesalers
Increase
Traditional store
coverage
Reallocate
resources to drive
returns
Poland ‘Root and Branch’ review Update on H1 2016 progress
14
Eliminate waste
Customer &
margin
management tools
Sales force structure is being redesigned to shorten the trips to
customer, allow management more time in the field and
improve control over sales team activities. Essential
competencies that were outsourced are being brought in-house
through recruitment
New distribution agreements with Synergy for ultra premium
vodka brand Beluga. Selected NPD releases to provide
additional momentum in existing brands
Review of all spend items, with particular focus on external
services and consultancies
Salesforce Automation System to be implemented
We will commence work on certain remaining action items in H2 2016/ 2017 as appropriate
however there is still work to be done this year on cementing the above areas
Refocus and
retrain sales
teams
Expand product
portfolio
Poland Market Share Trends Stabilisation in Q2 2016 vs competitors
15
Volume market share (%, all channels)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016
Stock Polska Roust Marie Brizard
Change in volume share last 3 months (%)
25.0%
(26.4% value)
41.7%
(40.4% value)
15.7%
(14.7% value)
(0.6%)
0.8% 1.2%
(1.4%)
(0.0%)
2.0%
(1.2%)
(0.7%)
0.9%
(1.2%)
0.2% 0.0%
Stock Polska Roust Marie Brizard Other
Source: Nielsen, total Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value by month.
April, May and June %
change in share
16
Poland Traditional Trade Market Share Trends Showing growth in Traditional Trade
Volume market share by producer (%, Traditional Trade)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Aug2015
Sep2015
Oct2015
Nov2015
Dec2015
Jan2016
Feb2016
Mar2016
Apr2016
May2016
Jun2016
Jul2016
Stock Polska Roust Marie Brizard
Pernod Ricard Polmos Bielsko Biała Brown Forman
34.6%
41.2%
13.2%
• July 2016 CMR data
adds support to other
Nielsen data for
Traditional Trade
• Highlights stabilisation of
market share but it
remains early days
4.8%
1.0%
1.6%
Source: CMR. Data represents third party retail tracking survey of c.400 traditional trade outlets in Poland, measured on a weekly basis.
Mar-16
31.1%
Mar-16:
42.9%
Mar-16
14.8%
Mar-16
4.3%
Poland Traditional Trade Market Share Trends Positive volume momentum from core brands in Traditional Trade
17 Source: CMR. Data represents third party retail tracking survey of c.400 traditional trade outlets in Poland, measured on a weekly basis.
1. Movement represents change volume share between April and June 2016.
• Recent CMR market
share data highlights
positive momentum of
Stock’s vodka brands
over the past 3 months
• Each brand has gained
volume market share
from April to June at the
expense of core
competitors
18.2%
11.7%
9.2% 9.5%
8.0%
6.0%
4.8%
3.5%
2.4%
18.3%
12.1%
9.9%
9.0%
8.0%
5.8%
5.0%
3.7%
2.6%
17.7%
10.8% 10.6%
9.1% 8.6%
5.4% 5.0%
3.9%
2.8%
ŻubrówkaBiała
KrupnikCzysty
Żołądkowade Luxe
Żytniówka LubelskaFlavours
SoplicaFlavours
ŻołądkowaGorzka
1906 StockPrestige
Apr-16 May-16 Jun-16
Volume market share by brand (%, Traditional Trade)1
Czech Republic Operational Highlights
• H1 2016 was focused on a change in strategy
on our core brand Bozkov Tuzemsky to
broaden consumer offering and differentiate
from local competition. MAT value share growth
has been achieved in the “Rum” category
• Good growth in Herbal Bitters category
following recent brand rejuvenation of Fernet
Stock, 0.6% increase in value market share
• Good performance in vodka category, holding
market share at 25.1% in an otherwise flat
period
33.9% 34.0%
MAT Jun 2015 MAT Jun 2016
41.8% 42.4%
MAT Jun 2015 MAT Jun 2016
55.3% 55.7%
MAT Jun 2015 MAT Jun 2016
Value share of total spirits (%)
Value share of HBL category (%)
Value share of rum category (%)1
Source: Nielsen, total Czech Republic, total off trade MAT June 2016.
1. “Rum” category includes both traditional rum, made from sugar cane and “local rum”, made from sugar beet. 19
12.2%
12.8%
MAT Jun 2015 MAT Jun 2016
Slovakia Operational Highlights
+0.6%
• Strong performance in H1 2016 with gains in both
value and volume market share
• Fruit Spirits performed well, growing value market
share by 4.0% to 24.7%1, driven by new variants
announced in late 2015/early 2016
• New distribution agreement with Distell
commenced, adding strength to Stock’s brand
portfolio and platform
11.1%
11.9%
MAT Jun 2015 MAT Jun 2016
Volume share of total spirits (%)
+0.8%
Value share of total spirits (%)
Source: Nielsen, total Slovakia, total off trade MAT June 2016.
1. MAT Value Share as at June 2016, sourced from Nielsen.
20
Italy Operational Highlights
• Italy continues to be a
challenging environment
− Slowdown in demand for
flavoured vodka likely to
remain for H2 2016
• Good recovery in the brandy
segment, leading positions
maintained in our four focus
categories
• Recent distribution agreement
with Distell to commence in H2
2016
Stock brand ranking in category
24.3%
19.8%
Keglevich Nearest competitor
60.2%
8.0%
Keglevich Nearest competitor
21.8%
5.5%
Limonce Nearest competitor
13.2%
24.6%
Stock Original Nearest competitor
1
1
1
1
1
2
Value share of total clear vodka (%) Value share of total vodka-based
flavoured liquers (%)
Value share of limoncello (%) Value share of brandy (%)
Source: IRI, total Italy, total off trade MAT Value June 2016.
21
Distribution brands
22
We now have third party distribution agreements in all wholly owned key markets
Countries with distribution agreement
Partner Overview
• Exclusive distributor of
Diageo’s portfolio of brands in
Czech Republic
Partner(s) Example products Overview
• Exclusive distributor of
Synergy’s super premium
Beluga Vodka and Beam
Suntory’s portfolio of
brands
Partner Overview
• Exclusive distributor of
selected Distell premium
brands in Italy and Slovakia
Partner Overview
• Exclusive distributor of Beam
Suntory’s portfolio of brands
in Croatia and Bosnia &
Herzegovina
Example products
Example products
Example products
New in 2016
New Product Development
23
• NPD remains important in maintaining and growing consumer demand,
particularly in Poland as a ‘dark’ market
• Stock Spirits is ideally placed to lead innovation in key markets given the
quality of its facilities, broad distribution network and track record for NPD
− In H1 2016 however we continue to embed major launches from H2
2015, supporting current organic growth momentum and investment
in core brands
− As part of this range review, certain under-performing NPD lines will
be discontinued
H1 2016 highlights:
Poland: Żołądkowa de Luxe pepper, Stock Prestige Monaco (special
edition)
Italy: New look Keglevich bottle
Amundsen Expedition now in all wholly owned markets
Operational Changes
24
• Ongoing review of central costs
− Head office review – closure of Swiss office
− Reduction in headcount
− Re-tendering of key professional services contracts – head office and other
markets
• Review of operating structure and process efficiencies
− Re-tender of Italian logistics partner
− Reorganisation of the commercial structure in Czech
− Review of external consultancy service arrangements in Poland
Lesley Jackson
Chief Financial Officer
Financial Results
Consolidated Statutory P&L
26
• Good overall improved performance in H1
2016, recovering from a weak Q1 and H1
2015
• Revenue growth supported by volume
growth of 9.1%. Selling expenses reduced to
support discounts in Poland
• Strategic price management and market mix
resulted in a minor reduction in H1 2016
Gross Margin
• Lower selling expenses and other operating
expenses have improved EBITDA margin by
5.4% to 15.4%
• Reduced interest costs following facility
refinance in November 2015
• H1 2016 earnings per share of €0.04
Consolidated statutory P&L
€’000s H1 2015 H1 2016 % Change
Revenue 108,049 115,989 7.3%
Cost of goods sold (49,758) (54,077)
Gross profit 58,291 61,912 6.2%
Gross profit margin % 53.9% 53.4%
Selling expenses (33,399) (30,829)
Other operating expenses (19,680) (18,610)
Operating profit before exceptional items
5,212 12,473 139.3%
Exceptional items 0 0
Operating profit 5,212 12,473
Net finance costs (3,248) 252
Profit before tax 1,964 12,725
Income tax expense (1,733) (4,346)
Profit for the year 231 8,379
EBITDA before exceptional 10,759 17,870 66.1%
EBITDA margin % 10.0% 15.4%
Earnings per share (basic and diluted) 0.00 0.04
Volume and Net Sales Revenue overview
27
108.0 116.0
H1 15 H1 16
Net Sales Revenue (€m)
Volume (m 9L cases)
2.0 2.3
2.9 3.0
4.9 5.4
H1 15 H1 16Clear Vodka Other
• Improvement in both volume and net
sales revenue compared to H1 2015
• Good growth in “Other” category which
is typically higher margin vs. Clear
Vodka
• Net revenue per case marginally
declined 1.5% due to market mix and
investment in Poland
• Commenced investment in core Polish
brands in Q2 to be competitive on
price
9.2
15.1
H1 15 H1 16
Poland H1 financial performance
28
• Actions taken during H1 starting to
yield results, with a 17% increase in
net sales revenue vs. H1 2015
• Improved mix
• Reallocation of investment toward core
brand pricing
• Improved performance has led to
increased operational gearing
Net Sales Revenue (€m)
EBITDA (€m)
17.4%
24.8%
xx.x% EBITDA %
52.5 60.7
H1 15 H1 16
Czech H1 financial performance
29
• Net sales revenue flat compared to H1
2015
• EBITDA increase of 17% and 4.1%
uplift in margin following reallocation of
A&P spend toward Poland
Net Sales Revenue (€m)
EBITDA (€m)
xx.x% EBITDA %
6.7 7.8
H1 15 H1 16
27.7 27.6
H1 15 H1 16
24.0% 28.1%
Italy H1 financial performance
30
• Net sales revenue declined 7% due to
product mix as a result of market
softness
− Decline in flavoured vodka offset
by gains in brandy category
• Overall growth in EBITDA with a 2.6%
uplift in margin
Net Sales Revenue (€m)
EBITDA (€m)
xx.x% EBITDA %
2.8 2.9
H1 15 H1 16
14.6 13.6
H1 15 H1 16
18.9% 21.5%
Other segments Slovakia, Croatia, Bosnia, Baltic Distillery & Exports
31
• Strong performance with growth in both
Net sales revenue and EBITDA
• Good performance in
− Slovakia with Golden Ice
− Bosnia and Croatia via new
distribution brands and Stock Brandy
• EBITDA grew 71.7% vs H1 2015 with
EBITDA margin increasing to 10.9%
Net Sales Revenue (€m)
EBITDA (€m)
xx.x% EBITDA %
0.9
1.5
H1 15 H1 16
13.1 14.0
H1 15 H1 16
6.8% 10.9%
Free Cash Flow
32
• We continue to have a strong focus on
cash flow
− Strong cash flow supported
payment of a special dividend of
10 pence per share in July
− Interim dividend announced of
€0.0227 per share
H1 15 H1 16
18.2%
2.0
15.9
88.9%
xx.x% % Adjusted cash flow conversion
1. Adjusted free cash flow calculated as Adjusted EBITDA less Capex, Net Working Capital change and Tax, excluding any costs associated with M&A and financing.
Adjusted free cash flow1 (€m)
Net debt
33
57.2 58.0
(19.9) 2.4 4.1 1.2
9.2
3.8
Net debtDec-15
Net cashinflow fromop. activities
Income taxpaid
Net capitalexp. & salesproceeds for
PPE
Net interestpaid
FinalDividend
Exchangerate
Net debtJun-16
0.96x 1.07x
y.yyx Net debt to EBITDA ratio
• Strong net cash flow
from operating activities
in the period
• Leverage reduced to
under 1.0x
• Significant liquidity
available to the
business
Net debt bridge: 31-Dec-15 to 30-Jun-16 (€m)
Net Finance Costs
34
• Significant reduction in interest payable
on bank loans following refinancing in
November 2015
• Refinancing switched from term loans to
a flexible RCF arrangement, and
materially lower margins
• Currency gains in H1 2016 a result of
the settlement of intercompany loans
• Reduction of finance costs (pre-FX
movements) equivalent to €0.01 per
share1
€m H1 2015 H1 2016
Interest payable on bank loans 2.8 0.9
Bank commissions and guarantees 1.0 0.3
Other net interest expense 0.3 0.1
Finance costs (pre-FX movement) 4.1 1.3
Foreign currency exchange gain (0.9) (1.5)
Net finance costs 3.2 (0.2)
1. Based on H1 2016 total number of ordinary shares in issue of 200m.
Taxes
35
• Current tax expense reflects the
increase in taxable profits in the
period
• Deferred tax charge represents
amortisation of post IPO
restructuring cost
• Deferred tax is a non-cash item in
the profit and loss account
Taxes €m H1 2015 H1 2016
Current tax expense 1.1 3.4
Prior year tax expense 0.5 -
Deferred tax charge 0.1 1.0
Total 1.7 4.3
Effective tax rate % 88.2% 34.2%
Corporate Costs
36
• Underlying corporate costs
reduced versus last year
• Action implemented to reduce
corporate costs
• Re- tender of professional
services
• Closure of Swiss office
announced today
• Restructuring costs
expected in H2 in the region
of €0.8m to €1.3m
• Savings from 2017
expected to be circa €1.5m
€m H1 2015 H1 2016
Head Office costs 4.7 4.5
PLC related costs including NEDs, internal audit and external communication
0.8 1.0
Group external audit 0.2 0.1
PSP and share based payments 0.6 0.6
Local market support costs including operations and IT
2.2 2.2
Group NPD projects 0.2 0.3
Insurance 0.5 0.4
Sub total 9.2 9.1
Senior team recruitment, incremental 2016 AGM & other one-off costs
0.0 1.0
Other including consolidation adjustments and FX
(0.5) (0.7)
Total H1 8.7 9.4
Impact of FX movements in H1 2016
37
• Overall impact of FX impact during H1
2016 was not material
• Net revenue impacted by weakening of
Polish Zloty, partially offset by
strengthening Czech Republic Koruna
• €8.1m impact to balance sheet reserves
arising on the translation from the
functional currencies of the Groups
foreign subsidiaries into Euros
108.0 116.0
10.4
(2.4)
Net sales revenueH1 2015
Operatingactivities
Impact of FX Net sales revenueH1 2016
Net Sales revenue bridge H1 2015-16 (€m)
10.8
17.9
6.9 0.2
EBITDAH1 2015
Operatingactivites
Impact of FX EBITDAH1 2016
EBITDA bridge H1 2015-16 (€m)
Mirek Stachowicz
Chief Executive Officer
Concluding Remarks
Concluding Remarks
39
• Positive Group trading performance with Net Sales increasing 7.3% and Adjusted EBITDA increasing 65.9%
vs the prior comparable period
• Good progress on Root and Branch review in Poland in H1 2016, but work still to be done
− Growth in volumes, Net Sales and Adjusted EBITDA
− Signs of stabilisation in Poland from both a customer and consumer perspective
− Positive momentum in volumes over the past three months across key brands and traditional trade channel
since price initiatives in H1 2016
− Strengthened local management team
• We continued to have a strong focus on cash generation
− Special dividend of 10 pence per share paid in July
− Reduction in balance sheet leverage
• Well positioned and on track to meet management expectations for FY 2016
− Further headway in Poland to come from additional Root and Branch initiatives
− Significant M&A transactions on hold for the remainder of the year, strategy remains unchanged
− Continuing cost reviews
− Brexit not expected to materially impact the Group
Q&A
Appendix
Our Head Office
42
Page Source Notes
8 Nielsen Total Poland, total off trade, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume by month to June 2016.
9 Nielsen Total Poland, total off trade, total vodka (defined as Total Poland, total off trade, total vodka, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) % volume share by channel to June 2016.A coverage factor of 1.18 has been applied to the traditional trade Nielsen base volume data to estimate the channel’s overall volume. From comparison to IWSR shipments data, Management believe that the volume base data understates the traditional trade and requires this coverage factor up-weight.
10,11 Nielsen Total traditional trade, average price per litre (PLN) in 50cl, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs).
15 Nielsen Total Poland, total off trade, total vodka (defined as Total Poland, total off trade, total vodka, total vodka (defined as sum of total vodka, flavoured vodka and vodka based flavoured liqueurs) volume and value by month.
16, 17 CMR data Data represents third party retail tracking survey of c.400 traditional trade outlets in Poland, measured on a weekly basis
19 Nielsen Total Czech Republic, total off trade, total spirits, herbal bitters category, rum category and vodka category MAT to June 2016. Rum category includes both traditional rum, made from sugar cane and “local rum”, made from sugar beet.
20 Nielsen Total Slovakia, total off trade, total spirits to MAT to June 2016
21 IRI Italy, total off trade (defined as the sum of the modern trade and discounters) Stock brands’ MAT % value share by category. Nearest competitor is the share of the nearest ranking competitor e.g. if Keglevich equals the number one brand, the “nearest competitor” shown is the number two brand. If Stock Original is the number two brand, the “nearest competitor” shown in the number one brand.
Sources and footnotes
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