GrowingGrowing through intelligentintelligent acquisitions acquisition Stock Spirits Group PLC Annual Report & Accounts 2019 Stock Spirits Group PLC Annual Report & Accounts 2019 / Additional Information / Useful Links Useful Links Stock Spirits is a major force in Central Link share portal www.mystockspiritsshares.com Overview 01 Financial Highlights 02 At a Glance Profit for the year Information for investors and Eastern European spirits Basic earnings per share Strategic Review Information for investors is provided on the internet as 06 Our Markets €28.3m part of the Group’s website which can be found at: 08 Our Business Model Revenue (12 mth proforma 2018: €13.6m) 14.26 €cents www.stockspirits.com/investors 10 Our Strategy With a major stake in each of our core (9 mth reported 2018: €19.3m) (12 mth proforma 2018: 6.86 €cents) 12 Key Performance Indicators (9 mth reported 2018: 9.71 €cents) 14 Principal Risks and Uncertainties operating markets and with a growing presence €312.4m Investor enquiries 20 Chief Executive’s Statement Volume in 9l cases (12 mth proforma 2018: €282.4m) 30 Regional Reviews in the wider global market, we have more than (9 mth reported 2018: €193.8m) Enquiries can be directed via our website or by contacting: 30 Poland 34 Czech Republic 45 brands and export internationally to more 14.4m Paul Bal 38 Italy than 50 countries worldwide. (12 mth proforma 2018: 13.3m) 42 Other (9 mth reported 2018: 9.1m) €29.2m Chief Financial Officer 14.74 €cents 14.74 44 Non-Financial Information Statement €28.3m Email: [email protected] 45 Stakeholder Engagement 14.26€cents 46 Responsible Business Report €312.4m Tel: +44 (0)1628 648500 54 Financial Review Fax: +44 (0)1628 521366 59 Proforma Consolidated Income Statement (Unaudited) 62 Notes to the Proforma Consolidated Income m 14.4 Statement (Unaudited) Stock Spirits Group PLC Governance Registered office: 70 Board of Directors m 13.3 Notes: Solar House 72 Chairman’s Report m 12.9 1. An enhanced dividend was paid for the 9 month period to September 2018, to ensure shareholders €282.4m Mercury Park 74 Corporate Governance Framework were not penalised from the year-end change, hence no proforma comparison is included. For the 79 Audit Committee Report year to 30 September 2019 an interim dividend of 2.63 €cents per share was paid on 21 June 2019 Wooburn Green and a final dividend of 6.31 €cents per share is proposed 84 Nomination Committee Report Buckinghamshire, HP10 0HH 2. Leverage is the net debt divided by the Adjusted EBITDA for the period. For 2018 this is the net 87 Directors’ Remuneration Report debt as per note 30 (page 167) of the Notes to the Financial Statements as at 30 September 2018, United Kingdom 105 Directors’ Report divided by the proforma 12 months Adjusted EBITDA for the 12 months to 30 September 2018 as per page 63 Registered in England 109 Statement of Directors’ Responsibilities €13.6m 3. Stock Spirits Group uses alternative profit measures as key financial indicators to assess underlying €259.8m 110 Independent Auditor’s Report performance of the Group. These include Adjusted EBITDA, Adjusted free cashflow and Adjusted 6.86€cents Company number 08687223 basic EPS. For the proforma comparative numbers see page 59. The narrative in the Annual Report and Accounts includes these alternative measures and an explanation is set out in note 7 of the Financial Statements Financial Statements on page 143 122 Consolidated Income Statement 4. Adjusted basic earnings per share excludes the impact of the exceptional items in the relevant year, Designed and produced 123 Consolidated Statement of Comprehensive Income see page 150 124 Consolidated Statement of Financial Position Emperor 126 Consolidated Statement of Changes in Equity Emperor.works 127 Consolidated Statement of Cashflows 128 Notes to the Consolidated Financial Statements 180 Company Statement of Financial Position 2017 2018 181 Company Statement of Cashflows 2019 2019 2018 2017 182 Company Statement of Changes in Equity 183 Notes to the Parent Company 2019 2018 Financial Statements 2017 Additional Information 2019 2018 196 Shareholders’ Information 2017 197 Useful Links Read about our recent acquisition of Distillerie Franciacorta SpA Read more on page 23 /197 / verview 19 Financial ighlights 2019 Financial H ighlights Stock Spirits changed its reporting date in 1 to a September yearend. here relevant and to show meaningful comparable measures of performance against the reported 1 months to 3 September 19, proforma data for the comparative year have been produced. See page 59 for the proforma onsolidated Income Statement and associated notes for the comparative 1 months to 3 September 1 and for the 1 months to September 17. D ividend per share1 8.94 €cents Leverage2 9 mth reported 1: .51 €cents 0.6 1 mth proforma 1: .53 Adj usted BI D A3 8.94 €cents €63.2m 8.51 €cents 1 mth proforma 1: €59.4m 0.94 9 mth reported 1: €35.m 8.10 €cents Adj usted asic earnings per share4 19.68 €cents 1 mth proforma 1: 16.7 €cents €63.2m €59.4m 9 mth reported 1: 9.71 €cents 0.67 €53.2m 0.53 19.68 €cents 16.72 €cents 14.74 €cents 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 /01 Stock Spirits Group PLC Annual Report & Accounts 2019 At a Glance The Group has operational subsidiaries across eight countries, throughout Central and Eastern Europe, but we distribute our brands across more than 50 different markets globally. Total revenue Poland A manufacturing plant is based in Lublin €312.4m and our head office for the market is (12 mth proforma 2018: €282.4m) in Warsaw. (9 mth reported 2018: €193.8m) See our Regional Review on page 30 Overview Revenue We own the route to market in Poland, the Czech Republic, Italy, Slovakia, Croatia and Bosnia & Herzegovina. Product movement is controlled by €171.7m 12 mth proforma 2018: €152.6m our operations as they deliver goods from our main 9 mth reported 2018: €105.6m manufacturing plants in Poland (Lublin) and the Czech Republic (Plzeň), through to our customers. Our customers are: Total retail value of Headcount off-trade spirits market1 • The off-trade (or sometimes called the modern trade), which is essentially the large supermarket chains €3.7bn 652 • Wholesalers, who then supply smaller stores and Total spirits market Volume share of total market: the on-trade (hotels, bars, restaurants) and by category 20182 vodka, flavoured vodka and vodka-based liqueurs by trade3 • In some markets, delivery is directly to the on-trade. In these markets we have in-market sales forces or agents, ensuring the end to end service delivery for our customers is well managed. Our strong in-market presence gives us a powerful platform for sales of our own brands and makes us a highly 65% vodka 62% traditional trade 13% flavoured vodka and 21% discounters attractive distribution partner for international vodka-based liqueurs 12% supermarkets 11% whisky brand owners, enabling us to leverage this 5% hypermarkets 11% others competitive advantage. Our International business is headquartered in the Czech Republic, where products are exported to third party distributors of our brands in the relevant export markets. 55% /02 / v e rv ie w / At a Glance Czech Republic Italy O th ers A manufacturing plant is based in Plzeň, Our main office is in Milan, and we have This includes our Slovakian operations a distillery in Pradlo and our head office added operations in Franciacorta with based in Bratislava, a distillery in the for the market is in Prague. our acquisition in the year. Baltic, our International division and a UK corporate office. See our Regional Review on page 34 See our Regional Review on page 38 See our Regional Review on page 42 Revenue Revenue Revenue €81.3m €26.9m €32.5m 12 mth proforma 2018: €73.2m 12 mth proforma 2018: €25.8m 12 mth proforma 2018: €30.9m 9 mth reported 2018: €49.2m 9 mth reported 2018: €17.6m 9 mth reported 2018: €21.3m Total retail value of Headcount Total retail value of Headcount Headcount off-trade spirits market4 off-trade spirits market6 €0.5bn 229 €1.5bn 59 140 Total spirits market by Total spirits market by Source(s): category 20185 category 20187 1. Nielsen total Poland, total off-trade, total spirits and spirit-based RTD’s MAT Value September 2019 2. IWSR total Poland spirits MAT Volume December 2018 3. Nielsen total Poland, total off-trade, total vodka, flavoured vodka and vodka-based liqueurs MAT Volume September 2019 (note: A “coverage factor” of 1.18x has been applied by management to the Nielsen traditional trade data. The coverage factor is derived from the historical difference between IWSR data and Nielsen data. Management considers that IWSR data more accurately represents the traditional trade in Poland) 4. Nielsen total Czech Republic, total off-trade, total 28% rum 38% others spirits MAT Value September 2019 23% vodka 36% bitters 5. IWSR total Czech Republic, total off and total on-trade, 17% herbal bitters 14% brandy total spirits MAT Volume 2018 13% others 7% vodka 6. IRI total Italy, total modern trade, discounters and cash 11% liqueurs 5% lemon liqueurs and carries, total spirits MAT Value September 2019 8% whisky 7. IWSR total Italy, total off-trade and on-trade, total spirits MAT Volume 2018 26% 9% 10% /03 Stock Spirits Group PLC Annual Report & Accounts 2019 O ur purpose “ C r e a ti n g goodtimes.” Our purpose is creating good times for all our stakeholders. Our focus on quality and innovation enhances drinking occasions for consumers and the retailers who serve them.