Annual General Meeting Hamburg, 15 June 2009
Alexander Margaritoff Chief Executive Officer
General economic conditions in 2008
- GDP + 1.3%
- Real private consumption has stagnated since 2001, compared to growth of +1.9% per year between 1991 to 2001.
- The expected revival in 2008 did not take place due to the increase in the oil price and the financial crisis.
In 2008, Hawesko again grew faster than the German wine market
Hawesko domestic sales development vs. that of the German wine market
- German wine market +2%
- Hawesko domestic sales +4%
- B2C segments retail and mail order +5%
- EBIT +40% to € 25.5 million
Ulrich Zimmermann Chief Financial Officer
Hawesko Group sales + 1.5% including foreign sales
- Specialist retail (Jacques' Wein-Depot) continued its steady growth
- Sales increase in the mail order segment
- Sales in the wholesale segment declined: less demand for premium Bordeaux wines in the second half of 2008
June 2009 7 The gross profit margin of the Hawesko Group improved
- End consumer segment Jacques' and mail order with higher proportions of sales
- Jacques' trading margin at the level of the previous year
- The trading margin in the mail order segment increased
Group EBIT rose sharply
€ 25.5 million 7.5% of sales
- At 7.5%, the long-term target return (7%) was clearly exceeded
- Important expenses were reduced in proportion to sales.
- Despite this: high level of new customer acquisition
- Positive effect from the delivery of 2005 Bordeaux vintage in early 2008
Specialist retail (Jacques' Wein-Depot)
- Increase in sales by 4.8% (like-for-like basis + 3.7%)
- Purchasing frequency + 6% via marketing and acquisition of new clients
- Number of stores: 271 (previous year: 269); 5 new openings; store network further optimised
- Continuous modernisation of the stores
Wholesale/Distribution
- Sales 2.9%
- Sharp decline at the Bordeaux subsidiary Château Classic
- Domestic sales had a compensating effect
- EBIT at the previous year's level, EBIT margin improved slightly
Mail order
- Sales + 4.8%
- Positive effect of accelerated acquisition of new clients with the wine club VinoSelect! and delivery of the 2005 Bordeaux vintages
- EBIT tripled due to the increased trading margin and lower marketing costs
Consolidated earnings increased significantly
- The financial result was weighed down by a non-recurring charge (€ 1.2 million) for the purchase of minority shares: € –3.3 million (previous year: € –2.6 million.)
- The special tax expenditure in the previous year (€ 2.7 million) was eliminated: Tax rate returned to 33% (previous year: 56%)
- Earnings per share: € 1.67 (previous year: € 0.76)
Very sound financing and liquidity situation
- Repayment of bank loans
- Increase in liquidity reserves
- Only 23% of the available lines of credit (seasonally up to 16%) have been used
Cash flow and investments (in € millions)
Group balance sheet: equity share increased
Dividend of € 1.20 per share maintains continuity: Attractive dividend policy plus stronger balance sheet
*) 2005 plus bonus dividend 0.30
Financial outlook
- General economic environment is difficult
- However, significant elements of our business model promise stable development
- Based on today's standpoint, we make the following assumptions:
- Slight decline in Group sales in the mid-single-digit percentage range
- Result and free cash flow will be clearly positive
Alexander Margaritoff Chief Executive Officer
Difficult general economic conditions
- October 2008: Lehman bankruptcy triggered the worldwide financial crisis
- Decline in German GDP is now estimated at 6% for 2009
- Desolate economic situation
June 2009 April 20
German GDP: Years with negative growth
real change in % against the previous year
Till 1991 West Germany, estimate for 2009. Source: Destatis, Sachverständigenrat
Consumption in Germany has been different since 2001
Consumption increasing only in
Germany
- 2002–2005: "Cheap is cool" in Germany, while consumption continued merrily in other countries
- Further slump hardly possible
Source: OECD, cited in manager magazin 4/2009
Consumption shock in Germany since the attack on the World Trade Center in 2001
Hawesko's steady strategy is bearing fruit
- Orientation to long-term objectives
- Investments in the future even in difficult times
- Priority given to the quality of our wines
- Focus on customer satisfaction
- Development and maintenance of trust and reliability
- Retention of a simple and successful business model
Q1 development shows traces of the crisis, but is encouraging
Q1 Group EBIT in € millions
- Q1 sales: 9.5% compared to the previous year
- Q1 EBIT: 32% compared to the outstanding previous year, but significantly above the level of the preceding years
- Previous year's Q1 EBIT contains positive one-off effect of the 2005 Bordeaux vintage deliveries
- Wine consumption is increasingly taking place at home
Positive outlook for the German wine market
- International Wine and Spirit Record (IWSR) forecasts growth of 6% until 2012
- Sales of higher-quality wines will increase overproportionally by 22% –25%.
- The current situation also offers opportunities
Hawesko's plans in 2009
- Further Investments in the acquisition of new clients at Jacques' and in the mail order segment
- Start of an Internet wine-video blog with a renowned wine expert
- Internet shop as a supplementary service at Jacques'
- New exclusive rights in the wholesale segment
Outlook for 2009
- Wine business is more stable than other areas of consumption.
- Good chance of the second-best year for Hawesko in 2009.
- We can build on our history of continuity and our noteable strengths.