Annual General Meeting
14 June 2010
Alexander Margaritoff, Chief Executive
14 June 2010
General economic conditions in 2009
- GDP Germany –5,0 %
- Slight increase in private consumption thanks only to the German "cash for clunkers" (oldcars scrapping) program
- Difficult economic environment for the wine market, too
Hawesko beat the German market again in 2009
- German wine market +1.2 %
- Hawesko domestic German sales +1.8 %
- B2C segments retail (Jacques') and mail order +3.4 %
- Second-best EBIT in the history of the company
Ulrich Zimmermann, Chief Financial Officer
14 June 2010
Hawesko Group sales 2009 maintained at previous year's level
- First half-year 2009 negatively hit by difficult market for high-end Bordeaux wines and Champagne
- Specialist shops (Jacques') and mail order were robust the whole year
- Wholesale strengthened again in second half-year, especially in Q4/2009
Group gross profit margin improved in 2009 again
- End-consumer segments Jacques' and mail order made greater share of group sales again in 2009
- Jacques' trading margin at unchanged high level
- Mail order trading margin yet higher in 2009
Development of important Group operating expenses
| in % of sales |
2008 |
2009 |
|
|
|
| Personnel costs |
– 9.2% |
–9.9% |
|
|
|
| Advertising costs |
– 7.7% |
– 8.2% |
|
|
|
| Delivery costs |
– 3.2% |
– 3.4% |
| Other operating income and |
|
|
| expenses (balance) |
– 11.1% |
– 11.4% |
|
|
|
| Depreciation and amortisation |
– 1.3% |
– 1.4% |
|
|
|
| Total |
– 32.5% |
– 34.3% |
- Personnel costs rose: higher number of employees
- Advertising costs increased: more marketing especially for newcustomer acquisition
Group EBIT: € 22.4 mill. in 2009
- Long-term goal (7 % margin on sales) was undercut only slightly at 6.6 %
- Sales expansion in mail order and specialty wine shops had positive effect
- Gross profit from Bordeaux wines was missing compared to 2008
- Marketing spend was kept up
Consolidated net income
Group EBT and net income excl. minorities (mill. €)
- Financial result includes one-off charge (€ 1.8 mill.) for the acquisition of outstanding minority interests: € –2.6 mill. (prev. year: € –3.3 mill.)
- Tax-expense rate practically unchanged at approx. 33 %
- Earnings per share: € 1.48 (Vorjahr: € 1.67)
Specialty wine shops (Jacques' Wein-Depot)
- Sales increase of 3.6 % (l-f-l +2.8 %)
- Transaction frequency +5 % because of marketing and new-customer acquisition
- No. of locations: 272 (prev. year: 271); 4 new openings, 4 relocations, shop networt was optimised further
- Higher claim on customer-bonus points
Wholesale/Distribution
- Segment sales –5.3 %
- Bordeaux subsidiary Château Classic hit again with large sales decrease
- Weaker domestic German business with high-priced wines and Champagne
- EBIT decrease as a result
Mail order
- Sales +3.2 % notwithstanding decrease in Bordeaux en primeur deliveries (2006 vintage vs. 2005 prev..year); adjusted for this, +6.5 %
- Positive momentum of new-customer acquisition continues; wine club VinoSelect! and 45th anniversary added impulses in 2009
- EBIT was increased again because of better trading margin and coverage of fixed-costs
Improved financing and liquidity situation, yet again
- Reduction of loans from banks by € 5.6 mill. or 82 %
- Increase of liquidity reserves by € 2.9 mill. or 29 %
- Available open credit lines of € 36 mill.
Consolidated balance sheet: again higher equity
Cash flow and capital spending (in mill. €)
Dividend proposal of € 1.35 per share maintains continuity: Attractive dividend policy uninterrupted
*) 2005 plus bonus dividend € 0.30
Financial outlook
- Economy in 2010: still a challenge
- Wine business stable
- Hawesko Group debt-free
- Outlook 2010
- Moderate sales increase
- EBIT at the high level of 2009 (€ 22–23 mill.)
- Non-recurrence of one-off charge in financial result will facilitate increase in consolidated net profit
- Free cash flow will continue at high level, approx. € 15 mill.
Alexander Margaritoff, Chief Executive
14 June 2010
Financial crisis has left its mark in the wine market
- Premium wines in less demand
- High capital tie-up weighs heavily on many smaller wine traders
- Winners are big chains and direct marketers
Consistent focus on the essentials
Basic principles of Hawesko:
- Best-possible service; customer in the center of attention
- Qualitatively best wines at fair prices
- Steady investments
Mail order looks back on many accomplishments in 2009
- More than 100,000 new customers in 2009
- "Catalog of the year 2009" for the 100th edition of our unseres wine catalog
- Marketing cooperations with wellrespected companies
- Innovation prize for Wine blog "TVino"
Jacques' grows continuously on (and on…)
- Four new openings, four relocations and further optimisation of the shop network
- Nearly 100,000 new customers in 2009, more than ever before
- Online-Shop launched mid-2009
272 Jacques' locations Germany and Austria
Wholesale
- Trade-agent network optimised and strengthened
- New exclusively distributed wines, eg, Mondavi, Hardys, Marco Felluga
- Entry into the Swiss market via majority shareholding in Globalwine AG, Zürich
Consistent strategy = strong emergence from the crisis
- 3-column concept
- Specialty wine shops, wholesale, mail order
- Attraktive for wine producers
- Concentrated wine expertise
- Market leadership
- Basis for success in a changing market
"Trade is associated with change"– now more than ever
- Life online is advancing
- Harder competition
- More unpredictable customers
- Hawesko Group:
- Multi-channel concept
- Realisation at both Group and subsidiary level
- Focus on the essentials
Q1 business development is excellent
Q1 Group EBIT in mill. €
- Q1 sales: +11 % against prev. year
- Q1 EBIT: +25 % against prev. year, second-best in the company's history
- Q1 includes proceeds from the Bordeaux en primeur business; adjusted for this factor, current trading so far in 2010 is better than ever
Hawesko in 2010
- New-customer acquisition
- Expansion outside Germany
- Wholesale business is recovering
- Economy is getting better
Thank you very much for your attention!