2020 First Half Results
Continued restoration of the Group's profitability in a public health context
that adversely affects the Branded Business in the first half of 2020
- EBITDA1 of €7.0m at 30th
- Materialisation of the effects of the commercial policy focused on profitable volumes in
- Group share of net profit: -€1.4m (vs. -€24.3m at
Note: all net sales growth figures mentioned in this press release are expressed at constant structure and exchange rates, unless stated otherwise
Simplified income statement for First Half 2020
In €m, except EPS | H1 2019 restated (*) | H1 2020 | 2020/19 Change | |||
Net sales (excluding excise tax) | 134.7 (2) | 135.3 | 0.4% | |||
Gross profit | 52.1 | 56.1 | 7.7% | |||
Gross margin | 38.7% | 41.5% | ||||
EBITDA | (7.4) | 7.0 | 193.9% | |||
Current operating income | (13.3) | 1.8 | 113.9% | |||
Attributable net income | (24.3) | (1.4) | 94.3% | |||
Earnings per share | (0.65) | (0.03) | 95.4% |
(*) 2019 financial statements have been restated for the effects of the application of IFRS 5
2020 FIRST HALF SALES (see note 2 page 1)
Revenue for the first half of 2020 amounted to €135.3m, up 0.4% on a like-for-like basis compared with €134.7m in 2019, after application of IFRS 5 related to the disposal of Sobieski Trade at the end of
Branded Business revenue for the first half of 2020 amounted to €80.6m, compared with €90.4m at 30th
As a result, the gross margin for the first half of 2020 is up 7.7%, representing a 2.8point increase in the gross margin rate to 41.5% in the first half of 2020 compared with 38.7% at 30th
EBITDA at
After factoring in net financial income of €2.2m, which includes financial income of around €6.7m related to the additional repayment of a receivable from
2020 First Half EBITDA by cluster
EBITDA | H1 2019 | Organic Growth | FX Impact | H1 2020 | ||
(in €m ) | ||||||
BRANDED BUSINESS | (8.1) | 12.5 | 0.1 | 4.6 | ||
WEMEA | 3.1 | 2.0 | 0.0 | 5.1 | ||
CEE | (5.9) | 7.4 | 0.0 | 1.6 | ||
(0.6) | 3,8 | 0.1 | 3.3 | |||
(0.4) | 0.5 | 0.0 | 0.1 | |||
HOLDING | (4.4) | (1.1) | 0.0 | (5.5) | ||
OTHER BUSINESSES | 0.6 | 1.8 | 0.0 | 2.4 | ||
Sobieski Trade | (0.1) | 0.1 | 0.0 | 0.0 | ||
Private Label | 0.7 | 1.7 | 0.0 | 2.4 | ||
TOTAL MBWS | (7.4) | 14.3 | 0.1 | 7.0 |
In the first half of 2020, EBITDA for the Branded Business amounted to €4.6m, an improvement of €12.5m on the first half of 2019. The commercial policies adopted as part of the strategic plan resulted in better protection of the gross margin of these activities.
WEMEA
Despite a 16.0% decline in sales (to €45.0m), EBITDA for the WEMEA Cluster amounted to €5.1m for the first half of 2020 (up 63% compared with the first six months of 2019). The selective sales policy based on profitable volumes, together with reductions in marketing costs and overheads, drove this growth, particularly in
CEE
In the first half of 2020, sales for the CEE cluster amounted to €23.1m (vs. €27.4m at
Against the backdrop of the global health crisis and an increase in excise duties in
EBITDA for the
The first half of 2020 sees a return to a positive EBITDA of €0.1m for the
Other Businesses
In the first half of 2020, Private Label France saw its supermarket and hypermarket sales positively affected during the containment period but remained well below the 2019 figure (-13%). The private label wine market in
Driven by a very sharp increase in bulk sales, EBITDA for Other Activities totalled €2.4m in the first half of 2020, up €1.8m compared with the first half of 2019 (€0.6m).
Holding
In the first half of 2020, the Holding company's EBITDA was -€5.5m compared with -€4.4m in the first half of 2019. This €1.1m decline reflects the impact of a negative foreign exchange result of €0.9m, mainly in GBP and PLN, compared with a positive figure of €0.3m at 30th
Balance sheet at 30th
Shareholders' equity (Group share) was €92.1m at 30th
Net financial debt stood at €52.8m at
OUTLOOK
During the first half of 2020, which was marked by an unprecedented global health crisis, the Group resolutely pursued its strategic roadmap, while working to adapt its fixed costs and overheads in line with the expected impact of Covid-19 on business. The very buoyant bulk business in the second quarter, voluntary commercial policies and strategic choices of distribution partnerships in certain key countries enabled MBWS to show a certain resilience to this difficult context. Nevertheless, the disruptions related to Covid-19 will continue into the second half of the year and, given the uncertainty as to the duration of this crisis, the Group does not yet have sufficient visibility on the outlook for the year.
POST CLOSURE EVENTS
Signing of an agreement subject to conditions precedent with
In two press releases dated 16th and 29th
The conditions precedent provided for in this agreement have not yet been lifted to date.
Implementation of an additional advance in
As announced in press releases dated 16th and 29th July, COFEPP has agreed to provide the Group with an additional advance of up to €5.5m (in place of the €4m advance initially planned). An initial payment of €4m was thus made on 10 August, with an additional payment of €1.5m to be made by COFEPP upon proof of the Group's cash flow requirements.
Agreement in principle on the amendment of a Scotch Whisky bulk supply contract with an MBWS supplier
MBWS reached a multi-year agreement in principle on
Agreement in principle with CIRI for the constitution of a tax and social security liability
An agreement in principle by the public creditors on a moratorium on part of the Group's tax and social security debts was validated by the CIRI in September, for a maximum amount of €7.5m, a moratorium that will be put in place over the coming months.
As a reminder, this condition, which was lifted, was one of the three conditions precedent to the availability of the balance of Advance No. 2, alongside with (i) the amendment of a bulk Scotch Whisky supply contract entered into with an MBWS supplier and (ii) the stability of estimated cash requirements for 2020.
The Group's annual and consolidated financial statements at 30th
No. 2 in the amount of €7m (without taking into account the additional payment of €1.5m referred to above in which case the balance of Advance n°2 will be 5.5M€) and thus the recapitalisation of the Group.
If the assumptions described above were not to materialise, the Group might not be able to realise its assets and settle its debts in the normal course of business, and the valuation and classification of assets and liabilities could be significantly impacted.
Financial calendar
- Availability of the 2020 first half financial report:
- Publication of sales at
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APPENDIX
FIRST HALF 2020 Consolidated Financial Statements
INCOME STATEMENT
(in €000) | 30.06.2019 Restated (1) | |
195,795 | 203,376 | |
Excices tax | (60,523) | (95,696) |
NET SALES EXCl TAX | 135,271 | 134,679 |
Cost of goods sold | (83,303) | (85,381) |
External charges | (18,627) | (24,089) |
Salary expenses | (24,488) | (30,745) |
Taxes and Duties | (2,504) | (2,644) |
Depreciation and Amortization | (7,096) | (6,237) |
Other operating income | 5,236 | 5,030 |
Other operating expenses | (2,739) | (3,871) |
RéCURRING OPERATING PROFIT | 1,750 | (13,258) |
Extraordinary income | 2 647 | 3,109 |
Extraordinary expenses | (6,002) | (10,437) |
OPERATING PROFIT | (1,604) | (20,586) |
Interest income | 65 | 18 |
Interest expenses | (2,561) | (2,753) |
net COST OF DEBT | (2,496) | (2,735) |
Other interest income | 6,757 | 2,105 |
Other interest expenses | (2,023) | (1,426) |
NET INTEREST EXPENSES | 2,239 | (2,056) |
PRE-TAX INCOME | 634 | (22,643) |
Income tax/credit | (2,006) | (355) |
INCOME FROM ONGOING OPERATIONS | (1,370) | (22,998) |
INCOME FROM DISCONTINUED OPERATIONS (1) | (1,329) | |
NET INCOME | (1,370) | (24,327) |
Attributable net income | (1,392) | (24,343) |
Of which net income from ongoing operations | (1,392) | (23,014) |
O which net income from discontinued operations(1) | (1,329) | |
Non-controlling interests | 22 | 16 |
Of which net income from ongoing operations | 22 | 16 |
O which net income from discontinued operations | ||
Attributable Net income per share (in €) | -0.03€ | -0.65 € |
Attributable net income from ongoing operations per share fully diluted (in €) | -0.03 € | -0.65 € |
Net income per share (in €) | -0.03 € | -0.65 € |
Net income per share diluted (in €) | -0.03€ | -0.65 € |
Weighted average number of outstanding shares | 44,568,731 | 37,366,868 |
Weighted average diluted number of outstanding shares | 44,568,731 | 37,835,336 |
(1) The financial statements (income statement) at 30th June, 2019 have been restated for the effects of the application of IFRS 5 - Discontinued operations.
BALANCE SHEET
Assets
(in €000) | ||
Long term assets | ||
15,024 | 15,039 | |
Intangible assets | 86,726 | 88,031 |
Property, plant and equipment | 51,926 | 56,180 |
Financial assets | 2,003 | 2,387 |
Long-term derivative instruments | ||
Deferred taxes | 1,259 | 1,328 |
Total long-term assets | 156,938 | 162,965 |
Current assets | ||
Inventory | 59,532 | 53,991 |
Trade receivables | 29,347 | 46,669 |
Tax receivables | 1,812 | 1,735 |
Other short-term assets | 31,831 | 32,686 |
Short-term derivative instruments | 157 | |
Cash and cash equivalents | 38,468 | 26,193 |
Total current assets | 160,988 | 161,431 |
Assets held for disposal | ||
TOTAL ASSETS | 317,926 | 324,396 |
Liabilities
(in €000) | ||
Total Shareholders’ equity | 92,379 | 93,737 |
Total long-term liabilities | ||
Employee benefits | 5,773 | 5,533 |
Long-term provisions | 4,180 | 3,238 |
Long-term loans | 70,066 | 9,689 |
Other long-term liabilities | 1,963 | 1,855 |
Long-term derivative instruments | ||
Deferred tax liabilities | 16,903 | 16,424 |
Total long-term liabilities | 98,884 | 36,739 |
Current liabilities | ||
Short-term provisions | 7,754 | 10,178 |
Short-term portion of long-term debt | 13,106 | 50,933 |
Short-term debt | 8,131 | 12,292 |
Supplier and other payables | 49,874 | 63,719 |
Tax liabilities | 1,886 | 481 |
Other short-term liabilities | 45,912 | 56,315 |
Short-term derivative instruments | 1 | 2 |
Total current liabilities | 126,664 | 193,920 |
Liabilities held for disposal | ||
TOTAL LIABILITIES | 317,926 | 324,396 |
CONSOLIDATED CASH FLOW STATEMENT
(in €000) | ||
Total consolidated net profit | (1,370) | (24,327) |
Eliminations : | ||
Amortization and provisions | (8,199) | 10,145 |
Revaluation gains / losses (fair value) | 273 | |
Gains/losses on disposals and dilution | 5,844 | (456) |
Operating cash flow after net cost of debt and tax | (3,724) | (14,364) |
Income tax charge (credit) | 2,002 | 363 |
Net cost of debt | 2,351 | 2,844 |
Operating cash flow before net cost of debt and tax | 629 | (11,157) |
Change in working capital 1 (inventories, trade receivables and payables) | (4,073) | 3,511 |
Change in working capital 2 (other items) | (1,552) | (15,317) |
Tax paid | (87) | (177) |
Cash flow from operating activities | (5,082) | (23,140) |
Acquisition of minority interests | (3,179) | (105) |
Purchase of property, plant and equipement and intangible assets | (5,023) | |
Purchase of financial assets | (4) | |
Increase in loans and advances granted | ||
Decrease in loans and advances granted | 7,072 | 239 |
Disposal of property, plant and equipement and intangible assets | 510 | 1,076 |
Impact of change in consolidation scope | 23 | 2 |
Cash flow from investing activities | 4,427 | (3,815) |
Capital increase | 4 | 58,487 |
Share buybacks | (5) | |
New loans | 67,271 | 76 |
Loans repayment | (47,725) | (2,872) |
Net interest paid | (1,455) | (2,623) |
Net change in short-term debt | (4,734) | (16,216) |
Cash Flow from financing activities | 13,360 | 36,846 |
Impact from changes in foreign exchange rates | (430) | 71 |
Change in cash and cash equivalents | 12,275 | 9,962 |
Opening cash position | 26,193 | 21,832 |
Closing cash position | 38,468 | 31,794 |
Change in cash and cash equivalents | 12,275 | 9,962 |
1 EBITDA = EBIT – provisions for current assets – depreciations – pensions liabilities.
2 Following the operations of consolidation of the interim financial statements at 30th
Attachment
- MBWS_PR_2020FIRSTHALFRESULTS
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