Solid earnings for 2013 - Financial structure further strengthened

Press release date: 
27/03/2014 - 5:45pm

Reims, Thursday March 27th, 2014 - 5:45 pm

Following a first half of the year marked by a significant contraction in net income, the actions taken to boost consumption during the fourth quarter enabled LANSON-BCC to record 17 million euros in net income for 2013. Alongside this, the Group has continued to further strengthen its financial structure.

 

Consolidated earnings

Champagne shipments represented 304.1 million bottles (-1.5%) in 2013 (source: CIVC). Despite a dynamic end to the year, the downturn in shipments over 2013 for the whole of the European Union was expected considering the very difficult economic environment.

 

LANSON-BCC figures

IFRS (€'000,000)

2013

2012

Change

Revenues

286.76

274.68

+ 4.4%

Gross margin

110.47

110.18

+ 0.3%

% of revenues

38.5%

40.1%

 

EBIT

39.33

41.13

- 4.4%

% of revenues

13.7%

15%

 

Financial expenses

-11.54

-12.49

+ 7.6%

Corporate income tax

-10.79

-11.04

- 2.3%

Effective tax rate

38.8%

38.5%

 

Net income

17.00

17.60

- 3.4%

% of revenues

5.9%

6.4%

 

 

 

In 2013, consolidated revenues totaled 286.76 million euros, compared with 274.68 million euros in 2012 (+4.4%). Excluding the brokerage subsidiary CGV, whose activity is traditionally subject to fluctuations, consolidated revenues came to 280.55 million euros, compared with 269.33 million euros in 2012 (+4.2%) The unfavorable change in the €/£ exchange rate and the importance of the United Kingdom, the Group's leading export market, are reflected in a 1.5 million euro revenue shortfall.

The Group's gross margin is stable, with 110.47 million euros for 2013, versus 110.18 million euros in 2012.

The Group's EBIT came to 39.33 million euros, versus 41.13 million euros (-4.4%), with an operating margin of 13.7%, compared with 15% in 2012. This change factors in the intense level of competition, affecting margins, as well as the commercial investments made on several markets and in particular the United States, the second largest export market for champagne, where the Group's presence is still very limited. These efforts will be maintained over 2014.

Financial expensesprimarily concern financing for the aging of stocks, representing -11.54 million euros, compared with -12.49 million euros. Consolidated debt has an average rate of 2.34%.

Pre-tax earnings came to 27.79 million euros, compared with 28.64 million euros (-2.8%).

The Group's effective corporate income tax rate has risen further, up from 38.5% in 2012 to 38.8%. More specifically, this rate takes into account the theoretical rate (33.33%), the social contribution rate (+3.3%), the "exceptional" contribution rate (+10.7%) and the non-deductibility of 15% of the financial expenses recorded. As a result of the small harvest in 2013, combined with the dynamic end to the year, two of the Group's Houses have been unable to benefit from the option to deduct financial expenses for the aging of wine stocks, whose rotation represents more than three years of shipments: Article 212 ii and 223 b ii of the French general tax code. This tax measure is particularly regrettable because it will have a major impact (with a rate of 25% from 2014) on outstanding sectors with "long-term stocks" and investments.

Net income came to 17 million euros, compared with 17.6 million euros (-3.4%), giving a net margin of 5.9% for the Group, versus 6.4% in 2012.

 

Financial structure further strengthened

Shareholders' equity represented a total of 224 million euros, compared with 197.46 million euros at the end of 2012 (+13.4%), with this change due to the following three reasons: the payment of the 2012 dividend in May 2013 (-2 million euros), the proceeds from the July 2013 reclassification of 305,000 treasury shares (4.7% of the capital), with CM-CIC Capital Finance (+11.3 million euros), and the recognition of 2013 net income (+17 million euros).

Consolidated net financial debt totaled 478.45 million euros, compared with 499.43 million euros at the end of 2012. Out of this debt, 367.26 million euros, compared with 386.22 million euros at end-2012, are allocated for financing the aging of wine stock, with a strict book value of 434.83 million euros, versus 422.61 million euros at end-2012.

Gearing represents 2.14, down from 5.68 at the end of 2006 following the acquisition of Maison Burtin and Champagne Lanson.

 

2013 dividend and awarding of new shares

LANSON-BCC's Board of Directors will be submitting a proposal for approval at the General Meeting on May 16th, 2014 for the dividend to be kept at 0.35 euros per share, with a payout ratio representing 13.3% of consolidated net income. The distribution of 10% of consolidated net income on average over eight years has contributed towards further strengthening the Group's financial structure. In addition, a capital increase based on the incorporation of reserves will make it possible to freely award one new bonus share for every 10 existing shares held by the end of June 2014.

 

Outlook

LANSON-BCC is reasserting its long-term value development strategy. The strong level of competition on all its markets highlights the benefits of an ongoing policy, moving in the right direction, to not ignore any segment. The Group's development is underpinned by the effective fit between its Houses, combined with the increasingly widely recognized quality of their wines, their more efficient production facilities and their effective management.

As usual, considering the fact that the last quarter alone accounts for nearly 50% of business for the full year, the LANSON-BCC Group, in line with its cautious policy, is not publishing any target figures for 2014.

 

Additional information

The consolidated financial statements for 2013 were approved by the Board of Directors on March 27th. The audit procedures on the consolidated accounts have been completed. The certification report will be issued once the necessary procedures have been finalized for filing the 2013 registration document. 

Champagne Lanson Champagne Chanoine Frères Champagne Besserat de Bellefon Champagne Boizel Champagne De VenogeChampagne PhilipponnatMaison Alexandre Bonnet Maison Burtin