First half of 2016: Satisfactory results

Reims, Thursday September 8th, 2016 - 5:45 pm

The LANSON-BCC Group is releasing its audited earnings for the first half of 2016, with 1.72 million euros of net income. This is an encouraging result considering that the first half-year period accounts for around one third of sales, but half of costs.

Highlights

In terms of volumes, for the Champagne industry as a whole, the first halves of 2016 (+1.1%) and 2015 (-1%) show contrasting trends. The French market (51% of volumes shipped) is down 2.1%, but other EU countries and above all other countries outside the European Union (25% of volumes shipped) are growing strongly (+4.6%). (Source: CIVC)

In this environment, the LANSON-BCC Group's volumes for the first half of 2016 increased in France, as well as for several other EU countries, particularly the UK and Switzerland.

Consolidated income statement

IFRS (€'000,000)

H1 2016 H1 2015

Revenues 91.80 85.83

EBIT 6.14 2.08

Financial income / expense -3.40 -3.36

Net income 1.72 -1.32

Consolidated revenues for the first half of 2016 climbed to 91.80 million euros, compared with 85.83 million euros, up 7%. Excluding the brokerage subsidiary, whose activity is traditionally subject to fluctuations, consolidated revenues represent 88.70 million euros for the first half of 2016, compared with 84.29 million euros (+5.2%).

Exports generated 41.8% of revenues, compared with 43.2% at June 30th, 2015. This change reflects the growth in sales on the French market and the contraction in sales for several European destinations (Germany, Scandinavia, Netherlands, etc.). In Japan, sales have been deferred as a result of sufficient stock levels.

EBIT came to 6.14 million euros, compared with 2.08 million euros at June 30th, 2015. The operating margin ratio represents 6.7%, up from 2.4% for the first half of 2015. This change factors in positive volume effects, primarily in France and the UK, as well as a positive price effect for superior vintages, making it possible to absorb the increase in the cost price of bottles sold despite a highly competitive environment.

Financial income and expenses totaled -3.40 million euros, compared with -3.36 million euros at June 30th, 2015. The average rate for consolidated debt was 1.29%, versus 1.37% at December 31st, 2015.

Net income climbed to 1.72 million euros, compared with -1.32 million euros at June 30th, 2015.

Consolidated balance sheet

Shareholders' equity represents 250.69 million euros, compared with 240.13 million euros at June 30th, 2015.

Consolidated net debt came to 497.02 million euros, compared with 491.83 million euros at June 30th, 2015. This trend will pave the way for a steady increase in sales of superior quality wines over the coming years. 83% of this debt is allocated for ageing a stock of wines over three years on average, an integral part of the process for creating Champagne wines. Gearing has improved further to 1.98, versus 2.05 at June 30th, 2015.

Outlook

In view of the usual seasonal trends for Champagne wine sales, with the first half of the year accounting for 50% of fixed costs, but generating barely one third of sales, the Group's results are satisfactory. However, these results cannot be extrapolated over the full year for 2016. Since visibility for the end of the year is still limited, the Group is not releasing any forecasts for the full year.

Additional information

The consolidated half-year accounts have been subject to a 'limited' review by the statutory auditors (Grant Thornton and KPMG), in accordance with the regulations in force. The half-year financial report was approved by the Board of Directors on September 8th, 2015 and is available on the Group website: www.lanson-bcc.com.

2016 third-quarter revenues will be released on Thursday November 3rd, 2016 (after close of trading).