Charenton-le-Pont, 28 September 2023
H1 2023 earnings
Strong resilience of earnings in the face of high inflation and pressure on raw materials
Profit margins stabilised, mainly due to structural cost savings initiated in 2022, amid an uncertain consumer environment
- EBITDA1 of €8.1 million in H1 2023, up €0.5 million from €7.6 million in H1 2022
- Net profit (Group share) of €5.1 million in H1 2023, up €2.6 million
Marie Brizard Wine & Spirits (the “Company”) (Euronext: MBWS) today announces its consolidated earnings for H1 2023 as approved by the Group’s Board of Directors today. The audit procedures have been carried out.
Fahd Khadraoui, Chief Executive Officer of MBWS, said: “In the first half of 2023, the roll-out of our proactive pricing policy helped us partially curb the impact of high inflation on our margins, even though these were diluted on a percentage basis. Furthermore, all the restructuring and cost-saving projects initiated in 2022 are beginning to bear fruit, particularly impacting the earnings of the France cluster and holding company.
Unfortunately, the challenging macroeconomic environment is still with us but we are holding our course and maintaining the development strategies presented at the 29 June 2023 Annual General Meeting in order to Invest for Sustainable Growth. The strength of our strategic and local brands, our distribution partnerships and our industrial service offerings put us in a solid position to achieve this objective, which can be fulfilled primarily through the ongoing efforts of our teams, whom I wish to congratulate on their unwavering commitment.”
Simplified income statement - H1 2023
| €m except EPS | H1 2022 | H1 2023 | Change 2023 vs 2022 | |
| Net revenues (excluding excise duties) | 86.4 | 98.8 | +14.3% | |
| Gross margin | 34.4 | 36.2 | +€1.8m | |
| Gross margin ratio | 39.9% | 36.6% | -3.3 pp | |
| EBITDA | 7.6 | 8.1 | +€0.5m | |
| Underlying operating profit | 5.5 | 5.4 | -€0.1m | |
| Net profit (Group share) | 2.5 | 5.1 | +€2.6m | |
| Earnings per share | 0.02 | 0.05 |
First half 2023 revenues
First half 2023 revenues excluding excise duties came to €98.8 million, up 14.3% versus H1 2022 (excluding currency impact). This improvement is mainly due to increased sales in part of the international business coupled with strong resilience among strategic brands in France, despite lower volumes trend.
The France cluster posted first half 2023 revenues of €42.1 million, up 5.0% versus H1 2022 despite the continuing slowdown in the spirits market. Revenue growth reflects the price increases applied mainly since Q2 2023 and restocking by some distributors. William Peel, Berger and San José posted growth in line with their respective market segments. Marie Brizard and Sobieski were impacted by a levelling effect in the on-trade business (customer restocking before summer 2022) and also in the off-trade business, where promotions were postponed and some product lines were suspended due to glass shortages.
Sales improved in the on-trade sector due to price increases, but volumes were down.
This positive first half sales trend in the France cluster is likely to weaken in the face of adverse market developments and ongoing instability in raw material supply chains.
International revenues amounted to €56.7 million, up 22.2% versus H1 2022 at constant exchange rates, reflecting contrasting trends across regions:
- penetration of new markets by Lithuania, Bulgaria and their export regions, generating strong sales growth;
- strong business in Spain in both strategic brands and subcontracting, driving strong revenue growth;
- challenges in some long-standing markets (Canada, Australia and the UK), particularly for the Gautier and Marie Brizard brands due to the decline in the relevant market segments (cognac, traditional liqueurs) and inventory reductions by local distributors;
- slow inventory depletions among US distributors, as well as glass shortages for some references, leading to a decline in revenues over the first half of the year.
First half 2023 earnings
Against a backdrop of widespread high inflation, the gross margin ratio was 36.6% in H1 2023 compared to 39.9% in H1 2022. The 3.3 percentage point decrease reflects the impact of the continuous surge in raw material and energy prices since Q2 2022, which affected the entire first half of 2023 despite the price increases applied.
First half 2023 EBITDA amounted to €8.1 million, up €0.5 million from H1 2022 (excluding currency impact).
The France cluster posted EBITDA of €6.0 million in H1 2023, up from €5.0 million in H1 2022. This improvement reflects the impact of the structural cost-saving programme initiated in 2022, in particular following the restructuring of the off-trade Sales Department in France, as well as the cluster’s strong resilience in the face of high inflation.
Meanwhile, the International cluster posted EBITDA of €4.1 million, down from €5.6 million in H1 2022. This decline is mainly attributable to MBWS International (export business excluding subsidiaries) and Imperial Brands, which were hard hit by an extremely competitive vodka market and a hotly contested cognac segment since the beginning of the year. This decline was only partly offset by strong performances in Spain and Bulgaria.
Group EBITDA also benefited from the continued reduction in holding company internal costs, which improved by €1.1 million.
H1 2023 EBITDA by cluster
| €m | H1 2022 | LFL change | Currency impact | H1 2023 | LFL change (excl. currency impact) | Reported growth (incl. currency impact) |
| France | 5.0 | 0.9 | - | 6.0 | +18.6% | +18.6% |
| International | 5.6 | (1.5) | 0.0 | 4.1 | -27.1% | -27.0% |
| Holding company | (3.0) | 1.1 | - | (1.9) | +35.8% | +35.8% |
| TOTAL MBWS GROUP | 7.6 | 0.5 | 0.0 | 8.1 | +6.5% | +6.7% |
Net profit (Group share) amounted to €5.1 million in H1 2023, up €2.6 million compared to H1 2022, when results were impacted by a provision for non-recurring expenses related to the restructuring of the off-trade Sales Department in France.
Balance sheet at 30 June 2023
Shareholders’ equity (Group share) amounted to €199.6 million at 30 June 2023, up from €194.6 million at 31 December 2022, while gross debt remained stable at €6.4 million in the first half of 2023, as did positive Group cash balances of €44.9 million at 30 June 2023.
The €4.6 million increase in inventories and work-in-progress to €56.5 million at 30 June 2023 reflects both the growing impact of high inflation and the Group’s strategy of building maximum back-up stocks in order to better cope with supply disruptions, operational considerations permitting.
Outlook
After a year 2022 marked by overall resilience among Group brands and business lines in the face of inflation and availability restrictions, the effects of supply disruptions combined with declining volumes from Q4 2022 onwards also impacted the first half of 2023, particularly in France.
The price increases applied in 2022 and 2023 to absorb the ongoing surge in input costs (mainly energy, liquid and dry raw materials, particularly glass), do not allow us to maintain our sales margins percentage at this stage.
The Group therefore continues to closely monitor elasticity in consumer demand in the face of price increases and is determined to maintain its ability to adapt, despite these challenges.
For some countries that are more sensitive to these factors, such as France, where our strategic brand markets are concentrated, mature and declining, visibility over the rest of the year is limited.
Despite this instability that has persisted for nearly three years, the Group will continue to do its best to maintain annual earnings growth through the combined effects of restructuring, structural cost savings and gradual improvement in profit margins through rigorous commercial and operational management, while remaining cautious regarding the short to medium-term business outlook.
Financial calendar
- H1 2023 financial report available: 29 September 2023
- Publication of revenues for the first nine months of 2023: 26 October 2023
Investors and shareholders relations contact MBWS Group Emilie Drexler relations.actionnaires@mbws.com Phone: +33 1 43 91 62 40 | Press contact Image Sept Claire Doligez - Laurence Maury cdoligez@image7.fr – lmaury@image7.fr Phone : +33 1 53 70 74 70 |
About Marie Brizard Wine & Spirits
Marie Brizard Wine & Spirits is a Group of wines and spirits based in Europe and the United States. Marie Brizard Wine & Spirits stands out for its expertise, a combination of brands with a long tradition and a resolutely innovative spirit. Since the birth of the Maison Marie Brizard in 1755, the Marie Brizard Wine & Spirits Group has developed its brands in a spirit of modernity while respecting its origins. Marie Brizard Wine & Spirits' commitment is to offer its customers brands of confidence, daring and full of flavours and experiences. The Group now has a rich portfolio of leading brands in their market segments, including William Peel, Sobieski, Marie Brizard, Cognac Gautier and San José. Marie Brizard Wine & Spirits is listed on Compartment B of Euronext Paris (FR0000060873 - MBWS) and is part of the EnterNext PEA-PME 150 index.
APPENDIX H1 2023 Consolidated Financial Statements
Income statement
| (€000) | H1 2023 | H1 2022 |
| Revenues | 116,955 | 105,995 |
| Excise duties | (18,192) | (19,574) |
| Net revenues excluding excise duties | 98,763 | 86,421 |
| Cost of goods sold | (62,578) | (51,978) |
| External expenses | (13,617) | (11,872) |
| Personnel expense | (13,894) | (14,013) |
| Taxes and levies | (835) | (953) |
| Depreciation and amortisation charges | (2,936) | (3,072) |
| Other operating income | 1,834 | 1,887 |
| Other operating expenses | (1,387) | (899) |
| Underlying operating profit | 5,350 | 5,521 |
| Non-recurring operating income | 1,440 | 2,055 |
| Non-recurring operating expenses | (1,489) | (5,152) |
| Operating profit | 5,300 | 2,424 |
| Income from cash and cash equivalents | 59 | 29 |
| Gross cost of debt | (124) | (96) |
| Net cost of debt | (65) | (67) |
| Other financial income | 115 | 956 |
| Other financial expenses | (123) | (593) |
| Net financial income/(expense) | (74) | 296 |
| Profit before tax | 5,226 | 2,720 |
| Income tax | (120) | (196) |
| Net profit from continuing operations | 5,106 | 2,524 |
| Net profit/(loss) from discontinued operations | - | - |
| NET PROFIT | 5,106 | 2,524 |
| Group share | 5,102 | 2,511 |
| of which Net profit from continuing operations | 5,102 | 2,511 |
| of which Net profit/(loss) from discontinued operations | ||
| Non-controlling interests | 4 | 13 |
| of which Net profit from continuing operations | 4 | 13 |
| of which Net profit/(loss) from discontinued operations | ||
| Earnings per share from continuing operations, Group share (€) | €0.05 | €0.02 |
| Diluted earnings per share from continuing operations, Group share (€) | €0.05 | €0.02 |
| Earnings per share, Group share (€) | €0.05 | €0.02 |
| Diluted earnings per share, Group share (€) | €0.05 | €0.02 |
| Weighted average number of shares outstanding | 111,856,360 | 111,825,601 |
| Diluted weighted average number of shares outstanding | 111,856,360 | 111,825,601 |
Balance sheet
| Assets | ||||||
| (€000) | 30/06/2023 | 31/12/2022 | ||||
| Non-current assets | ||||||
| Goodwill | 14,704 | 14,704 | ||||
| Intangible assets | 77,174 | 77,847 | ||||
| Property, plant and equipment | 26,665 | 26,932 | ||||
| Financial assets | 1,007 | 1,146 | ||||
| Deferred tax assets | 4,009 | 3,781 | ||||
| Total non-current assets | 124,558 | 124,410 | ||||
| Current assets | ||||||
| Inventory and work-in-progress | 56,519 | 51,934 | ||||
| Trade receivables | 39,181 | 43,523 | ||||
| Tax receivables | 1,023 | 734 | ||||
| Other current assets | 10,222 | 10,468 | ||||
| Current derivatives | 281 | 114 | ||||
| Cash and cash equivalents | 44,892 | 47,495 | ||||
| Total current assets | 152,118 | 154,268 | ||||
| TOTAL ASSETS | 275,676 | 278,678 | ||||
| Equity & Liabilities | ||||||
| (€000) | 30/06/2023 | 31/12/2022 | ||||
| Shareholders’ equity | ||||||
| Share capital | 156,786 | 156,786 | ||||
| Additional paid-in capital | 72,815 | 72,815 | ||||
| Consolidated and other reserves | (26,477) | (25,529) | ||||
| Translation reserves | (8,586) | (8,520) | ||||
| Consolidated net profit/(loss) | 5,102 | (945) | ||||
| Shareholders’ equity (Group share) | 199,640 | 194,607 | ||||
| Non-controlling interests | 79 | 333 | ||||
| Total shareholders’ equity | 199,719 | 194,940 | ||||
| Non-current liabilities | ||||||
| Employee benefits | 1,747 | 1,769 | ||||
| Non-current provisions | 2,582 | 2,540 | ||||
| Long-term borrowings – due in > 1 year | 2,079 | 2,218 | ||||
| Other non-current liabilities | 1,568 | 1,518 | ||||
| Deferred tax liabilities | 179 | 139 | ||||
| Total non-current liabilities | 8,155 | 8,184 | ||||
| Current liabilities | ||||||
| Current provisions | 4,513 | 5,417 | ||||
| Long-term borrowings – due in < 1 year | 602 | 641 | ||||
| Short-term borrowings | 3,698 | 3,702 | ||||
| Trade and other payables | 38,344 | 36,694 | ||||
| Tax liabilities | 230 | 1,932 | ||||
| Other current liabilities | 20,403 | 26,899 | ||||
| Current derivatives | 13 | 269 | ||||
| Total current liabilities | 67,803 | 75,554 | ||||
| TOTAL EQUITY AND LIABILITIES | 275,676 | 278,678 | ||||
Cash flow statement
| (€000) | H1 2023 | H1 2022 |
| Total consolidated net profit | 5,106 | 2,524 |
| Depreciation and provisions | 1,580 | 4,930 |
| Gains/(losses) on disposals and dilution | 18 | (51) |
| Operating cash flow after net cost of debt and tax | 6,704 | 7,403 |
| Income tax charge/(income) | 120 | 196 |
| Net cost of debt | 63 | 67 |
| Operating cash flow before net cost of debt and tax | 6,887 | 7,666 |
| Change in working capital 1 (inventories, trade receivables/payables) | 607 | (10,473) |
| Change in working capital 2 (other items) | (5,270) | (7,497) |
| Tax paid/received | (2,317) | 3,716 |
| Cash flow from operating activities | (93) | (6,588) |
| Purchase of PP&E and intangible assets | (1,858) | (1,412) |
| Decrease in loans and advances granted | 116 | 2,733 |
| Disposal of PP&E and intangible assets | - | 2,872 |
| Impact of change in consolidation scope | (116) | - |
| Cash flow from investment activities | (1,858) | 4,193 |
| Capital increase | - | 19 |
| New borrowings | 37 | 159 |
| Borrowings repaid | (360) | (791) |
| Net interest paid | (11) | (67) |
| Net change in short-term debt | (55) | 525 |
| Cash flow from financing activities | (389) | (155) |
| Impact of exchange rate fluctuations | (263) | 1,778 |
| Change in cash and cash equivalents | (2,603) | (772) |
| Opening cash and cash equivalents | 47,496 | 54,169 |
| Closing cash and cash equivalents | 44,893 | 53,397 |
| Change in cash and cash equivalents | (2,603) | (772) |
1 EBITDA = EBIT + depreciation & amortisation + provisions excl. current assets.
NB: All revenue growth figures reported herein are at constant exchange rates and consolidation scope, unless otherwise stated. Financial data individually rounded up or down.
Attachment
