First half of 2017: Positive results

Reims, Thursday September 7, 2017 - 5:45 pm

The LANSON-BCC Group is releasing its audited earnings for the first half of 2017, with a profit of 0.59 million euros, while the first half-year period accounts for around one third of sales but half of costs. This result makes it possible to confirm the Group's sound financial foundations.

Highlights

In terms of volumes, for the overall Champagne sector, the first half of 2017 (+3.3%) was more robust than the same period in 2016 (+1.1%). However, the contraction in the French market (48% of volumes shipped) accelerated to -2.7% from -2.1% for the first half of 2016. Other European Union countries have seen a slight increase (+0.8%), contrasting with the trend for other countries outside of Europe (+17.8%, 28% of shipped volumes). Source: CIVC.

In this context, the LANSON-BCC Group's volumes for the first half of 2017 contracted on the French market, facing not only sluggish trends, but also a very aggressive competitive environment.

Consolidated income statement

Consolidated revenues for the first half of 2017 totaled 85.07 million euros, compared with 91.80 million euros, down -7.3% compared with a +7% increase for the first half of 2016. Excluding the brokerage subsidiary, whose activity is traditionally subject to fluctuations, consolidated revenues represent 83.12 million euros for the first half of 2017, compared with 88.70 million euros (-6.3%).

Exports generated 46.2% of revenues, compared with 41.8% at June 30, 2016. This change reflects the lower level of sales on the French and UK markets and the positive growth seen for several European destinations (Germany, Belgium, Italy, etc.) as well as the United States, Japan and Asia in general.

EBIT came to 2.62 million euros, compared with 6.14 million euros in the first half of 2016, which benefited from very dynamic sales. The operating margin ratio represents 3.1%, versus 6.7% at June 30, 2016. On the one hand, France recorded a negative volume effect. On the other hand, the sterling's sharp depreciation in the first half of 2017 compared with the first half of 2016 (-9.5%) restricted performances in the UK, the Group's primary export market. The positive price-mix effects seen in France and for export were not able to offset these changes and the increase in the cost price of bottles sold during the period.

Financial income and expenses came to -1.78 million euros, compared with -3.40 million euros.

Net income totaled 0.59 million euros, compared with 1.72 million euros at June 30, 2016.

Consolidated balance sheet

Shareholders' equity represents 262.88 million euros, compared with 250.69 million euros at June 30, 2016.

Consolidated net debt totaled 521.81 million euros, compared with 497.02 million euros at June 30, 2016. This trend will pave the way for a steady increase in sales of superior quality wines over the coming years. 90% of 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 represents 1.98, identical to the level from June 30, 2016.

Outlook

Due to the seasonality of Champagne sales, these positive results cannot be extrapolated over the full year for 2017. As visibility for the end of the year is still limited despite initial signs of an upturn in consumption in France, 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 7, 2017 and is available on the Group website: www.lanson-bcc.com.

2017 third-quarter revenueswill be released on Tuesday November 7, 2017 (after close of trading).