TFF : Annual Results 2021/2022

ACTIVITY

The wine division: €155.2 million: +4.8% in gross growth, of which +2.1% achieved organically

While this financial year demonstrated strong resistance in an environment heavily impacted by climatic events, it was nonetheless marked by a decline in volumes for its wine barrel businesses. However, the demand observed in the 4th quarter suggests a return to high levels of activity from 2022/2023.

The alcohol division: €147.4 million: +30.6% in gross growth, of which +27.1% achieved organically

On the whisky market, cyclical logistical difficulties weighed on the volume of activity, which fell. The price hikes that signal the recovery of the market, have not yet made it possible to compensate for this downward movement.

On the bourbon market, more than 600,000 barrels were produced and marketed, almost twice as much as last year and above expectations. This on what is a very buoyant market with promising growth prospects for the coming years (including an expected production level of 650 000 barrels in 2022/2023).

RESULTS:

GOOD RESILIENCE IN TERMS

OF OPERATING MARGINS

NET RESULT SHARPLY UP

Results, in terms of value, rose again after a 2020/2021 financial year that was impacted both by health restrictions and climatic hazards.

However, in line with expectations, the operating profitability of the group came in at 12.7% with a current operational result of € 38.3 million, thanks to a number of well-anticipated factors:

• The like-on-like fall in wine barrel volumes
• The decision not to pass on tariff increases to customers in the wine barrel business for the 2021 vintage.
• The significant increase in several of our operational costs: raw materials, logistics, insurance, etc.
• The growth of the bourbon division with margins that remain lower than those of the wine division, even though they are improving,
• The end of COVID-linked government aid.

Net income rose sharply by 78% to €36.6 million, thanks in particular to the contribution of a significant exchange rate effect of +€13 million after a negative exchange rate impact of -€9.3 million in 2021.

A SOLID BALANCE SHEET

AND WELL-CONTROLLED DEBT

The group's balance sheet continues to strengthen with equity of €426 million (vs. €374 million) and well-contained net debt of €136.9 million (vs. €138 million). The latter includes the cost of the acquisition of the REMOND Cooperage* and continued investments in the Bourbon market with the acquisition a new stave-mill and the creation of another, which will give the Group no fewer than nine production sites in the United States.

2022/2023: GROWTH IN ACTIVITY AND OPERATIONAL PROFITABILITY

The 2022/2023 financial year looks set to benefit from a very favorable combination of factors. All of our markets are showing signs of good growth momentum, allowing the group to envisage an ambitious target of around €360 million in turnover, thanks to:

• the return of sustained demand on the wine market after three vintages that were characterized by low harvest levels and an unfavourable international context;
• the promising prospects of the bourbon market, which continues to show strong sustainable development potential;
• the recovery of the whisky market, which is expected to be confirmed, alongside an increase in prices that will be good both for business and margins

Profitability ratios are expected to increase gradually from the 2022/2023 financial year, supported by:

• the strong growth of activity in all the group's businesses worldwide;
• the improvement of our expected profitability on the bourbon market.

«I can only welcome the results of this exercise which marks a turning point after three particularly difficult years that were characterized by a damaging pandemic and difficult climatic conditions.

I would like to salute our teams who have remained particularly motivated and mobilized. As a result, they've been able to observe, manage, react and anticipate consistently, allowing for the performances we have seen this year.

I remain particularly serene and confident with regard to the future of TFF Group, in both the short and medium term, since it is poised to benefit from:

• very promising markets in our businesses all around the world;
• the talent of our professional and particularly well-trained staff;
• high-performanceproduction tools capable of supporting the growth in each of our markets;
• a solid balance sheet and cash flow that will allow us to continue our growth both internally and externally and to consolidate our position as a world leader.

Of course, I would like also to thank our shareholders who've remained loyal during this difficult period. For them we have therefore decided to propose, at our next meeting, the distribution of a dividend increase of 14%»

Jérôme FRANCOIS

Chairman of the Management Board