Q4 2018 and FY 2018 Net Sales

World News: . []

Paris, 11 February 2019

Marie Brizard Wine & Spirits (Euronext: MBWS) today announced its non-audited net sales for Q4 2018, covering the reporting period from 1October to 31 December 2018, and full-year 2018.

The Group’s consolidated non-audited Q4 2018 net sales totaled €99.5m, a -6.2% decrease compared to Q4 2017.  The Branded Business accounted for 58.3% of total net sales, marking a sequential improvement in consolidated revenue mix versus the Branded Business accounting for 49.7% of net sales in Q3 2018.

In France, Q4 2018 net sales totaled €24.3m, a -14.6% decrease compared to the previous year.  Revenue was affected by the decline in sales evident across the overall spirits sector in France since the first half of 2018, and further exacerbated by the social movements in November and December, which have affected most consumer goods categories.  In Q4 2018, the value of the spirits market decreased by -3.0%, with MBWS’ main categories continuing to underperform the overall sector.  The value of the vodka sector declined -6.1%, Scotch whisky decreased -3.4%, and flavored wines decreased -6.5%.   The Group’s net sales underperformance during the quarter is due primarily to a decrease in volumes, attributable to a lower level of promotions carried out by MBWS, in contrast to intense promotional activity by competitors, particularly in the scotch whisky and vodka categories.  The sparse availability of 2017 vintage rosé also had a negative impact on MBWS’ Q4 net sales.

In the rest of the WEMEA cluster, net sales grew to €7.6m, a +8.5% increase compared to last year.  This result was driven by solid sales growth in Spain, reflecting the positive impact of a double-digit price increase, which has been well-accepted by the market.

In Poland, Q4 2018 net sales grew +17.1% versus Q4 2017, to €10.3m, providing evidence of the progressive recovery from the proactive destocking in H1 2018.  Sales growth in Poland was driven by a net sales increase in the modern trade, and by the gradually accelerating execution of distribution agreements signed in the second half of 2018. 

In Lancut, final testing is being carried out and most of the required authorizations were recently obtained.   Operations at the new distillery are scheduled to begin in the coming weeks.

In the rest of the CEE cluster, Q4 2018 net sales reached €9.1m, an increase of +13.1%, marking a return to growth.  Sales growth in Lithuania reflects the full impact of pricing increases taken earlier in the year, and the                                                                                                                                                                                                                                                                                  restrictive but consistent regulatory environment regarding the sale of alcohol since the second half of 2017.  Sales activity in Bulgaria also generated solid growth. 

In the Americas cluster, net sales totaled €5.4m.  As anticipated and previously mentioned, in the United States top-line decreased sharply with continued destocking of Sobieski in some regional markets into Q4 2018.  Consequently, net sales in the cluster were down -44.3% as compared to Q4 2017 (with a challenging comparable base of +10.8%).  Additionally, pricing pressure accelerated in the US vodka market over the holiday season, with overall pricing in the category moving downward, and a consequent negative impact on Sobieski’s net sales.     

A top-line decrease in Brazil, due primarily to a challenging comparable base, also contributed to the overall sales decline in the Americas cluster during this reporting period.

Net sales in the Asia Pacific cluster totaled €1.2m in Q4 2018, a decrease of -34.0% versus last year off of a low base, and in-line with Q3 2018 net sales.  In Asia, the distribution agreements in place have not enabled the Group to meet its objectives.  The new strategic plan will put forth a new approach to the route-to-market in this cluster. 

Net sales for Other Businesses in Q4 2018 totaled €41.5m, a decrease of -0.8%.  The  dynamics evident in the third quarter of 2018 continued, with net sales at Sobieski Trade growing +2.8%, while a decrease in private label wine led to an overall  -6.3% sales decrease in the Private Label business.

The Principal Option of the agreement between MBWS and COFEPP, presented at the AGM on 31 January 2019, was approved by 89% of voting shareholders (with COFEPP excluded from the vote). 

This option is based on the agreement of 21 December 2018 between MBWS and COFEPP (as modified by an addendum on 30 January 2019) for a Reserved Capital Increase (RCI) and subsequent free stock warrant program for all shareholders.  The capital increase should provide a minimum of €45m in new money to MBWS.  

As set out under the terms of the agreement between Marie Brizard Wine & Spirits and COFEPP, a €25m bridge loan was granted by COFEPP to MBWS on 4 February 2019.  This loan will be repaid to COFEPP by an offsetting receivable within the framework of the COFEPP Reserved Capital Increase that is expected to take place at the end of February. 

This operation is subject to COFEPP obtaining an exemption by the French Financial Markets Authority (AMF).  The required exemption was granted on 5 February 2019.  The operation is also subject to prior authorization of the anti-trust authorities in Poland.  This authorization was obtained today.  The operation is additionally subject to the authorization from the French anti-trust authorities under conditions considered acceptable by COFEPP; this decision is expected to be received by the end of the February 2019.  

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Globe Newswire: 12:24 GMT Monday 11th February 2019

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