Lanson BCC : 2020 first-half earnings

Press release date:

10/09/2020 - 5:45pm

Reims, Thursday September 10, 2020 - 5:45 pm

The LANSON-BCC Group is releasing its earnings for the first half of 2020, with net income of -€2.57m, while the first half-year period accounts for only around one third of sales, but half of costs. Despite the contraction in volumes linked to the global lockdowns in the context of the Covid-19 pandemic, the LANSON-BCC family Group is moving forward with its value strategy with determination.

Key developments

In terms of volumes, for the overall Champagne sector, shipments for the first half of 2020 are down 29.4%. The first half of 2019 came in at -3.1%. The French market (45.4% of volumes shipped) recorded a 29.2% drop, compared with -6% for the first half of 2019. Other European Union countries (-31.1%; 24.6% of volumes shipped) and non-EU countries (-28.2%; 30% of volumes shipped) have been affected in the same way by the health crisis and its major economic consequences (source: CIVC).

In this context, sales for our Maisons have been very affected, both in France and for export, from the hotel sector to restaurants,travel retail and events. However, the good performance by mail-order sales (B to C) and the high level of shipments to European mass retail operators, corresponding to a potential anticipation of their needs, made it possible to limit the contraction in our Group's business.

Consolidated income statement

IFRS (€m)	H1 2020	H1 2019
Revenues	74.13	79.47
EBIT	-1.57	0.13
Financial income and expenses	-1.81	-1.93
Net income	-2.57	-1.18

Consolidated revenues for the first half of 2020 came to €74.13m, compared with €79.47m, down 6.7%, after contracting by 9.9% in the first half of 2019. Excluding the brokerage subsidiary, whose activity is traditionally subject to fluctuations, consolidated revenues totaled €73.45m for the first half of 2020, compared with €77.94m for the first half of 2019 (-5.8%). Exports generated 50.2% of revenues at June 30, 2020, compared with 47.6% at June 30, 2019.

EBITcame to -€1.57m, compared with €0.13m for the first half of 2019. This reflects an adverse volume effect and a globally unfavorable price-mix effect, combined with an increase in the cost price of bottles sold during the period, linked primarily to higher grape prices.

Financial income and expenses came to -€1.81m, versus -€1.93m, following a 6.2% improvement.

Net income represents -€2.57m, compared with -€1.18m for the first half of 2019.

Consolidated balance sheet

Shareholders' equityis up to €281.80m, compared with €277.20m at June 30, 2019.

Net financial debt came to €545.21m, compared with €547.18m at June 30, 2019. 88% of this debt is allocated for ageing a stock of wines over 4.5 years on average, an integral part of the process for creating high-quality Champagne wines. Although the decrease in yields for the 2020 harvest by almost 22% (8,000kg / ha versus 10,200kg / ha in 2019) will affect the profitability of our own vineyards, it will enable our Group to gradually adapt its stock levels in line with future needs. Gearing represents 1.93, compared with 1.97 at June 30, 2019.

Outlook

Considering the traditional seasonality of Champagne sales and the uncertainties linked to the health context, these results cannot be extrapolated over the full year. Due to the lack of visibility concerning the end of the year, our Group is not releasing any forecasts for the full year, but it is important to note that the last quarter of the calendar year historically accounts for nearly 50% of sales.

Additional information

The consolidated half-year financial statements have been subject to a limited review by the statutory auditors (Grant Thornton and KPMG). The half-year financial report was approved by the Board of Directors on September 10, 2020 and is available on the Group website: www.lanson-bcc.com.

2020 full-year revenueswill be released on Thursday January 28, 2021 (after close of trading).