Ivry-sur-Seine, 27 July 2017
MBWS Q2 2017 Net sales grew +4.8%
- Implementation of BiG's growth component, with sales improvement across most clusters and brands
- Pillar brand net sales grew +1.0%, driven by new routes-to-market
- +12.5% increase in Other Businesses
- H1 2017 net sales growth: +3.9%
Marie Brizard Wine and Spirits (Euronext: MBWS), today announced its consolidated non-audited net sales for the Q2 2017 and H1 2017 reporting periods. MBWS reported Q2 2017 consolidated net sales of €125.9m, +4.8% versus the previous year, and H1 2017 consolidated net sales of €212.5m, representing +3.9% growth versus H1 2016.*
Jean-Noël Reynaud, CEO of MBWS, commented: "Net sales in Q2 2017 resumed an encouraging growth trajectory as compared to Q1 2017 revenue, underscoring the improving execution of the distribution agreements signed at year-end 2016 in Poland, the United States and China. This sequential improvement is evident across almost all our clusters and pillar brands.
"Our net sales have thus resumed their growth in Poland, have increased slightly in the United States, and are growing very strongly in the Asia Pacific cluster, albeit from a low base," continued Mr. Reynaud. "The inventory adjustment that followed the announcement of our route-to-market reconfiguration, with the consequent negative impact on our results in the previous two quarters, is diminishing. This combination of factors leads us to a promising outlook in line with our BiG growth strategy, which is largely based on revamped and expanded distribution.
"The net sales growth and market share gains generated by most of our pillar brands in Q2 2017 also add evidence to the potential of our mainstream business model. I am pleased to report that the re-launch of Marie Brizard is showing positive results, and that the brand contributed to net sales growth in Q2 2017. Additionally, Cognac Gautier is growing very dynamically across several markets. MBWS' teams continue to drive these trends via commercial excellence and market-specific marketing activities, which should translate to wins in the marketplace," concluded Mr. Reynaud.
* All percentage growth rates in this document are expressed in organic terms and exclude foreign currency impact, unless stated otherwise.
Q2 2017 Net Sales by Cluster
| Q2 2016 Restated | Organic Growth | Currency impact | Q2 2017 | Organic growth (excl. Currency impact) | Organic growth (incl. Currency impact) | |
| WEMEA | 40.0 | -1.1 | 0.0 | 39.0 | -2.7% | -2.7% |
| France | 33.1 | -1.0 | 0.0 | 32.1 | -2.9% | -2.9% |
| Rest of WEMEA | 6.9 | -0.1 | 0.0 | 6.8 | -1.8% | -1.8% |
| CEE | 24.0 | 1.0 | 0.5 | 25.5 | 4.3% | 6.5% |
| Poland | 16.6 | 0.0 | 0.5 | 17.2 | 0.3% | 3.4% |
| Rest of CEE | 7.4 | 1.0 | 0.0 | 8.3 | 13.4% | 13.4% |
| Americas | 7.3 | -0.4 | 0,3 | 7.2 | -5.8% | -1.1% |
| Asia Pacific | 0,6 | 0.4 | 0.0 | 1.0 | 62.7% | 62.7% |
| Sub-Total Branded Business | 71.9 | -0.1 | 0.9 | 72.7 | -0.1% | 1.1% |
| Other Businesses: | ||||||
| Sobieski Trade | 23.8 | 3.6 | 0.9 | 28.3 | 15.3% | 19.1% |
| Private Label | 22.7 | 2.2 | 0.0 | 24.9 | 9.5% | 9.5% |
| Sub-Total Other Businesses | 46.5 | 5.8 | 0.9 | 53.2 | 12.5% | 14.4% |
| TOTAL MBWS | 118.4 | 5.7 | 1.8 | 125.9 | 4.8% | 6.3% |
* Q2 2016 net sales restated to reflect the cancellation of the Mateus and Ferreira contracts in WEMEA, /the reclassification of Pulco in Spain to Private Label activity, and the sale of the Augustowianka water brand in Poland (Sobieski Trade).
Branded business net sales in Q2 2017 totalled €72.7m, virtually flat compared to Q2 2016. Including the foreign exchange effect, branded business sales increased by +1.1%. Net sales of pillar brands increased by +1.0% during the quarter; including the impact of foreign currency, pillar brand net sales grew +2.2%.
Other Businesses generated net sales of €53.2m in Q2 2017, growing by 12.5% versus the previous year, attributable to Sobieski Trade (+15.3%) with Private Label activities (+9.5%) also contributing significantly to growth.
Western Europe, Middle East and Africa: On-going growth of pillar brands
Net sales in the Western Europe, Middle East and Africa (WEMEA) region totaled €39.0m in Q2 2017, a decrease of -2.7% versus the previous year.
| | |||||||
| Change in Volumes vs. 2016 | Market Share | ||||||
| Market | MBWS | MBWS | Change | ||||
| France | |||||||
| William Peel | -1.5% | +0.2% | 24.6% | +0.4 pt | |||
| Sobieski | +2.1% | +7.9% | 15.7% | +0.8pt | |||
| Fruits and Wine | -4.1% | -2.2% | 30.2% | +0.5 pt | |||
| Source : Nielsen YTD P06 201 ; IRI P6 2017 for Fruits and Wine | |||||||
Net sales in France totaled €32.1 million, a decrease of -2.9% versus Q2 2016. In France, the spirits pillar brands displayed on-going dynamism in Q2 2017 in a spirits market that decreased -0.5% in volume. William Peel continued to capture market share, further consolidating its leadership of the scotch whisky market with share growth of +0.4 points, driven by commercial excellence and the successful launch of its latest innovation, Spicy Shot. Sobieski also expanded its share of the market, generating +0.8 additional market share points YTD to reach a 15.7% share of the market. In the flavored wine category, Fruits and Wine continued to strengthen its leadership position, growing its market share by +0.5 pts YTD to 30.2%. The sales growth of MBWS brands was also due in part to their expanding presence in the on-trade segment.
The growth in the spirits business was offset by sales declines in the lower-profit branded wine category, as the budget for promotional activities in this business line was allocated to more profitable brands.
The rest of WEMEA reported a sales decrease of -1.8% in Q2 2017 to €6.8m, attributable primarily to the readjustment of MBWS' business in Spain, partially compensated by growth in the rest of the cluster. In particular, the development of Marie Brizard in the UK contributed to cluster growth.
Central and Eastern Europe: Back to growth
Net sales in the Central and Eastern Europe cluster (CEE) reached €25.5m in Q2 2017, increasing 4.3% versus the previous year. Including the foreign exchange impact, net sales increased 6.5%. Very strong volume sale increases of Marie Brizard, William Peel, and Cognac Gautier contributed to cluster growth.
| Change in Volumes vs. 2016 | Market Share | ||||||
| Market | MBWS | MBWS | Chge | ||||
| POLAND | |||||||
| Krupnik Clear | -0.9% | -5.1% | 15.1% | -0.7 pts | |||
| Krupnik Flavored Krupnik Total Brand | +7.0% +0.9% | +21.3% -3.1% | 5.0% 12.6% | +0.6 pts -0.5 pts | |||
| Source : Nielsen YTD P05 2017 | |||||||
In Poland, Q2 2017 net sales of €17.2m increased slightly, by +0.3% compared to Q2 2016. Including the foreign exchange impact, net sales increased by +3.4%. MBWS Poland's sequential sales growth in Q2 2017 points to the beginning of a recovery after a market inventory adjustment strongly impacted sales in Q1 2017.
The performance in Poland is attributable primarily to more than 20% volume growth of flavored Krupnik -- growing at more than twice the growth rate of the overall flavored vodka segment in the second quarter (Nielsen, P05 2017) - and stemming mostly from distribution gains. In H1 2017, flavored Krupnik totalled 9.7% of volume sales of the overall brand, up from 6.9% in H1 2016, a key indicator of the success of our growth strategy.
The growth of flavored Krupnik was offset by in volume sales of Clear Krupnik, at -5.1% year-to-date per Nielsen, a consequence of ongoing pricing pressure in the vodka market in Poland. MBWS continues to invest to defend Krupnik market share, while at the same time limiting margin erosion, with a consequent short-term negative impact to top-line growth and market share in the Clear segment.
Dynamic sales growth of William Peel continued into the third year after the brand's launch in Poland, with a volume increase of 52% (YTD vs year-ago, Nielsen P05 2017), significantly outgrowing the category. Strong sales growth of Marie Brizard and Cognac Gautier also contributed positively to the quarter's sales results in Poland.
In the rest of the CEE cluster, Q2 2017 sales increased by 13.4% to €8.3m, fueled by ongoing dynamism in Lithuania and Bulgaria, both driven by strong growth of William Peel, pillar and local vodka brands, Marie Brizard and Cognac Gautier.
Americas: US moving to growth
Net sales in the Americas cluster decreased by -5.8% to €7.2m during Q2 2017. Including the impact of foreign currency, net sales in the cluster decreased -1.1%. This performance masks single-digit growth in the US, which was offset by a double-digit decrease in Brazil due to ongoing macroeconomic challenges in that market.
The reconfigured route-to-market began to show positive results in the US, where Sobieski shipments were up compared to year-ago and versus Q1 2017, while on-hand inventory levels decreased. Moreover, Sobieski out-performed the imported vodka segment by some measures: according to NABCA (the National Alcohol Beverage Control Association, which monitors the alcoholic beverages markets in the "controlled" states), Sobieski volume sales increased by 2.5% in Q2 2016, compared to -0.5% for imported vodkas during the period.
Growth in the US was also fueled by the growth of Cognac Gautier and Marie Brizard.
Asia-Pacific: Strong increase
Net sales for Q2 2017 in the Asia-Pacific region increased 62.7% versus the previous year, reaching €1.0m. Growth was driven primarily by execution of the COFCO agreement, and the ramp up of William Peel distribution. Volume sales growth in the cluster was also generated by sales of Marie Brizard in Australia, and Fruits and Wine in Japan.
Q2 2017 Pillar Brand Performance: Beginning of a growth dynamic across the portfolio
| Q2 2017 | ||
| Volume Growth | Net Sales Growth | |
| William Peel | 2.4% | -0.6% |
| Sobieski | 4.3% | 1.6% |
| Krupnik | -6.4% | -3.1% |
| Cognac Gautier | 114.6% | 108.1% |
| Marie Brizard | 7.7% | 10.2% |
| Fruits and Wine | 2.2% | -2.9% |
| Total Pillar Brands | -0.2% | 1.0% |
| Other Brands | -2.2% | -3.1% |
| Total Branded Business | -0.1% | |
Net sales of MBWS pillar brands grew by +1.0% in Q2 2016 excluding the impact of foreign currency, and +2.2% including the foreign exchange impact. All pillar brands generated volume growth in Q2 2017 (with the exception of Krupnik), with notable increases posted by Cognac Gautier and Marie Brizard. The volume decrease in Krupnik was due to a volume decline in the Clear presentations of the brand, with flavored Krupnik volumes growing more than twice the rate of the market. The relatively favorable price/mix evolution for Krupnik reflects the dynamism of flavored Krupnik and its impact on limiting the sales decrease of the overall brand.
Other/local brands reported a net sales decrease of -3.1% during the period. Branded wines in France accounted for a significant part of the erosion of Other brands sales.
Other Businesses: Strong top-line growth of tactical businesses
Other Businesses posted a top-line increase of 12.5% in Q2 2017 to €53.2m. The momentum at Sobieski Trade evident in Q1 2017 continued into Q2, leading to growth of +15.3% during the quarter for net sales of €28.3m. However, strong competition in the sector hampered margins during the quarter.
Overall Private Label activities returned to growth, posting an increase of +9.5% during the quarter for net sales of €24.9m.
H1 2017 Net Sales increased +3.9%
H1 2017 Net Sales by Cluster
| H1 2016 Restated | Organic Growth | Currency impact | H1 2017 | Organic growth (excl. Currency impact) | Organic growth (incl. Currency impact) | |
| WEMEA | 67.7 | -1.3 | 0.0 | 66.4 | -1.9% | -1.9% |
| France | 56.3 | -0.9 | 0.0 | 55.4 | -1.7% | -1.7% |
| Rest of WEMEA | 11.4 | -0.4 | 0.0 | 11.0 | -3.2% | -3.2% |
| CEE | 41.2 | 1.2 | 0.6 | 43.0 | 2.8% | 4.4% |
| Poland | 27.6 | -0.8 | 0.6 | 27.5 | -2.8% | -0.5% |
| Rest of CEE | 13.5 | 1.9 | 0.0 | 15.5 | 14.3% | 14.3% |
| Americas | 12.1 | -1.5 | 0.6 | 11.2 | -12.1% | -7.4% |
| Asia Pacific | 1.2 | 0.4 | 0.0 | 1.6 | 34.5% | 34.5% |
| Sub-Total Branded Business | 122.2 | -1.2 | 1.2 | 122.2 | -1.0% | 0.0% |
| Other Businesses: | ||||||
| Sobieski Trade | 41.1 | 6.9 | 1.1 | 49.2 | 16.9% | 19.6% |
| Private Label | 39.0 | 2.1 | 0.0 | 41.1 | 5.4% | 5.4% |
| Sub-Total Other Businesses | 80.1 | 9.1 | 1.1 | 90.3 | 11.3% | 12.7% |
| TOTAL MBWS | 202.3 | 7.9 | 2.3 | 212.5 | 3.9% | 5.0% |
* H1 2016 net sales restated to reflect the cancellation of the Mateus and Ferreira contracts in WEMEA, the reclassification of Pulco in Spain to Private Label activity ,the sale of the Augustowianka water brand in Poland (Sobieski Trade), and the cancellation of the Kerrygold contract in the US.
MBWS reported H1 2017 consolidated net sales of €212.5m, +3.9% versus H1 2016, and +5.0% including the impact of foreign currency. The Branded Business posted €122.2m in net sales, decreasing by -1.0% versus H1 2016. Including the impact of foreign currency, net sales growth of the Branded Business was flat for the period.
Branded Business sales growth in H1 2017 was driven by CEE cluster net sales growth of +2.8%, with a local currency decline of -2.8% in Poland offset by growth in Lithuania and Bulgaria that led to +14.3% net sales growth for the rest of the CEE cluster. The Asia Pacific cluster also contributed to net sales growth in the first half of the year, with a net sales increase of +34.5%.
The positive performance of the CEE and Asia Pacific clusters in H1 2017 was offset by a -12.1% net sales decrease in the Americas, resulting from the adjustment of stock levels in Q1 2017. WEMEA also eroded overall sales growth, with a net sales decrease of -1.9% in the first half of the year.
Other Businesses posted net sales growth of 11.3%, driven by the positive performance of Sobieski Trade.
H1 2017 Performance of Pillar Brands
| H1 2017 | ||
| Volume Growth | Net Sales Growth | |
| William Peel | 5.0% | 2.4% |
| Sobieski | -3.0% | -2.7% |
| Krupnik | -15.0% | -3.6% |
| Cognac Gautier | 60.8% | 70.4% |
| Marie Brizard | 6.3% | 8.4% |
| Fruits and Wine | -2.0% | -5.8% |
| Total Pillar Brands | -4.8% | 0.6% |
| Other Brands | -6.4% | -5.3% |
| Total Branded Business | -1.0% | |
MBWS pillar brands generated pillar brand net sales growth of 0.6% in H1 2017, driven by the positive performances of William Peel, Marie Brizard and Cognac Gautier, and partially offset by sales contractions in Krupnik, Sobieski and Fruits and Wine. Favorable mix between Clear and flavored Krupnik limited the net sales decrease to -3.6%.
The decline in Other Brands was attributable most significantly to a decrease in the Branded Wine business.
MBWS will report its H1 2017 financial results on 20th September 2017.
About Marie Brizard Wine & Spirits (MBWS)
Marie Brizard Wine & Spirits produces and sells a range of wine and spirits primarily in Europe and the United States. MBWS has distinguished itself for its know-how, the range of its brands, and a long tradition and history of innovation. From the inception of Maison Marie Brizard in Bordeaux, France in the year 1755, to the launch of Fruits and Wine in 2010, Marie Brizard Wine & Spirits has successfully developed and adapted its brands to make them contemporary while respecting their origins. MBWS is committed to providing value by offering its customers bold, trustworthy, flavorful and experiential brands. The company currently has a broad portfolio of leading brands in their respective market segments, most notably William Peel scotch whisky, Sobieski vodka, Fruits & Wine flavored wine and Marie Brizard liqueurs. Marie Brizard Wine & Spirits is listed on the regulated market of Euronext Paris, Compartment B (ISIN code FR0000060873, ticker MBWS) and is included in the EnterNext© PEA-PME 150 index, among others.
Press:
Stéphane Pedrazzi
stephane.pedrazzi@mbws.com
Tel: +33 1 76 28 40 71
Investors:
Raquel Lizarraga
raquel.lizarraga@mbws.com
Tel: +33 1 43 91 50 18
Simon Zaks, Image Sept
szaks@image7.fr
Tel: +33 1 53 70 74 63
