Annual report 2020/2021

2020/2021

ANNUAL

REPORT

TIME

IS ON

OUR

SIDE

SUMMARY

A MESSAGE FROM THE CEO	2
KEY FIGURES 2020/2021	4

ACTIVITY & PERFORMANCE

THE WINE MARKET	6
THE SCOTCH WHISKY MARKET	8
THE BOURBON MARKET	10
SHAREHOLDER'S NOTEBOOK	12

FINANCIAL REPORT

14

Photos : Serge Chapuis // Shutterstock

ANNUAL REPORT 2020/2021 // 1

A MESSAGE

"FROM THE CEO

TFF Group has demonstrated its ability to anticipate and to respond quickly, allowing it to ensure solid operational performances with a limited fall in activity"

2 // ANNUAL REPORT 2020/2021

Dear shareholder,

The fiscal year ended that ended on April 30th was contrasted in the global context of the pandemic, difficult weather conditions and tight markets.

However, I have many reasons to be pleased with the quality, motivation, mobilization and responsiveness of our teams, who were able to face the exceptional headwinds of this fiscal year with great talent.

This year's results are the translation of this and I am pleased to announce that, in this unprecedented and unexpected contex, marked simultaneously by the pandemic, Brexit, American taxes and the vagaries of the weather, - TFF Group was able to demonstrate its anticipation and responsiveness, allowing it to ensure a solid operational performance with a limited decline of -5.2% in its turnover on a like- on-like basis, an EBITDA at the high level of 18.4% of revenues, and net income at €20.51 million, close to 8% of revenues, despite an unfavorable intra-group exchange rate effect.

Our wine business, which stood at €148 million, limited its decline to -12%, despite an unstable political, economic and health context that was unfavorable to investment.

The quality of the 2020 harvest was low in terms of volume, with 45% of the Group's markets affected by fires (Australia, USA). However, the Group maintained a high level of operating profitability, above 20%.

Our alcohol division, with revenues of € 112.8 million, saw growth of +1.1% (+5.2% like-on-like)

The whisky division held up well with a 10% increase in trading activity, but with prices down 22%.

The renovation/repair business grew by +24% with the opening of an eighth production site, bringing its capacity to 1 million barrels per year.

The Bourbon division achieved revenues of €65.8 million, representing growth of +7.8%.

The winning combination of cooperages and stave mills has enabled defensive growth to be achieved thanks to our diversification towards sales of wood to clients with in-house cooperage facilities.

Despite the unfavorable context, EBITDA was particularly high, at 18.4%, while operating income remained above 14%, although this was impacted by a lack of volume and the ramping up of the Bourbon division.

Finally, we are closing this fiscal year with a strengthened balance sheet, a significant reduction in net debt from €169 million to €138 million, a strengthening of shareholder equity to €374 million (gearing of 37%), and nearly €100 million in available cash.

The 2021/2022 financial year began in an inflationary context, particularly for raw materials and freight and with a labor market that remains extremely tight.

This year is likely, once again, to prove mixed, with the wine market expected to decline and the spirits market expected to grow.

As a result, performance will continue to be under pressure as a result of the ramping-up of the bourbon division, which has not yet reached its target profitability rate of 15%, and from an unfavorable mix/country effect (USA, Australia, China).

This context, coupled with the consequences of the pandemic, means that we must remain cautious, with activity targets for 2021/2022 close to those of the last fiscal year and revised sales targets for 2024/2025 of around €350 million.

But I remain confident for the short and medium term , thanks to

• the Group's good financial health, which has helped it rise to the challenges of the past year.
• the strength of the markets on which we are confirming our position as world leader
• the motivation of our teams and the quality of the production resources put in place
• the Group's ability to achieve solid results at the end of this complicated and totally unprecedented period.
• our strategy of profitable growth and diversification, supported by a strengthened financial position that enabled us to meet the new challenges of this cycle and that leave us better equipped to take advantage of the expected rebound in the wine market in 2022 and to support the strong growth of the Bourbon division.
• On the basis of this confidence, we have decided to propose to the Annual General Meeting of October 2021 that a dividend of 0.35 euro per share be maintained.

JÉRÔME FRANCOIS

CEO

ANNUAL REPORT 2020/2021 // 3