MESSAGE FROM THE CHAIRMAN 2014 MESSAGE FROM THE CHAIRMAN THE GROUP’S FOUNDERS Bruno PAILLARD Chairman of the LANSON-BCC Group Philippe BAIJOT Chairman of Champagne LANSON Dear Shareholders, After falling for the previous two years, Champagne started improve the gearing ratio, which came to 1.95 for 2014, to pick up again in 2014, with a modest increase in volume down from 5.68 at the end of 2006 following the acquisition terms (+0.7%) and better value growth confirmed outside of of BURTIN and Champagne LANSON. The objective to France. The Champagne wine market has seen a clear upturn move back down to less than 2, a normal position for the in shipments for Europe, as well as good performances for Champagne industry due to its high levels of stocks, has exports further afield. France, which is still the leading been achieved. The remaining senior debt, which primarily market for Champagne wines, accounting for 52.8% of concerns vine purchases, represents only 11.8% of overall volumes shipped, is the only market to have contracted and debt, focused primarily on financing for the ageing of stocks. it has continued to be deeply affected by the weak economy. LANSON-BCC is moving forward, confident in the efficiency In this environment, LANSON-BCC has continued moving of its business model and the quality of its fundamentals. forward with its value development strategy that has been The strong level of competition on all its markets highlights applied for years, while focusing on the essential defense the benefits of an ongoing policy, moving in the right of its pricing positions, a vital condition for sustainable direction, to not ignore any segment. The complementary development. More specifically, the Group’s Houses have features of our Houses, the increasingly widely recognized achieved encouraging performances on several export quality of their wines, our efficient production facilities and markets, although without offsetting the marked slowdown our effective management will drive our future development. in sales in France. Despite the current sluggish consumption trends in France, LANSON-BCC has continued to further LANSON-BCC is once again confirming its long-term value development strategy and continuing to make major strengthen its financial structure. investments in the Group’s Houses, particularly Champagne DE VENOGE in Epernay, which will be moving into its Despite these challenges, LANSON-BCC’s results for 2014 magnificent new headquarters midway through 2015, as highlight their resilience. Our operating margin came to 12.0%, well as Champagne LANSON in Reims, which has just compared with 13.7% in 2013, with this change reflecting the opened an outstanding tour circuit, the second phase in a strong level of competition on volumes and pricing, particularly five-year program. in France and neighboring European countries, as well as the cost of ongoing commercial investments in the Group’s Houses. I would like to thank our customers, our partners, our teams Our net margin rate is stable at 5.8%, thanks to the significant and our shareholders for their confidence, trust and loyalty. reduction in our financial expenses, with the most expensive credit facilities set up in 2006 maturing, combined with a drop in variable rates. LANSON-BCC has continued to further strengthen its financial structure. The Group has capitalized 90% of Bruno PAILLARD consolidated net income on average since 2006, helping Chairman and Chief Executive Officer THE ORIGINAL CHAMPAGNE STYLE SINCE 1760 To strengthen its value development strategy, LANSON is rolling out a major investment program, paving the way for the House to further improve the quality of its wines. Extensive investments focusing on quality The new facilities, built in 2014, are magnificent. A further 55 stainless steel tanks have been added, along with entirely new wooden cellars, made up of barrels and casks. All with a view to further increasing the complexity of LANSON’s Champagnes thanks to a single-plot wine-making approach. The Pinots Noirs and Chardonnays, selected from over 500 hectares, come from plots located in the Champagne region’s best vineyards. With this new single-vineyard cuverie opening up a range of options, the Cellar Master now has an unrivalled selection for developing unique blends. Today, the House is launching a new presentation for its iconic Champagne. It is revitalizing its Black Label, while upholding LANSON has crafted its wines the values and magnificent history of a House founded more than 250 years ago. in the original Champagne style since 1760 New Cellar Master, Hervé Dantan In the House’s new wooden cellars, certain oak casks contain The son of a wine grower, Hervé Dantan has always found reserve wines. Aged for many years, these wines will also bring the world of wine particularly appealing. Following various greater complexity and continuity for LANSON’s Black Labels. experiences in the most renowned wine-producing regions of France then California, he returned to the region where his heart New Black Label presentation truly lies, devoting himself to his passion for Champagne. The Black Label owes its emblematic name to Victor Lanson Recognized by his peers, he joined LANSON in July 2013, to who, in 1937, wanted to pay tribute to the British market and support Jean-Paul Gandon, who had been the House’s Cellar particularly the Court of England, for which LANSON Champagne Master since 1986. Following two years of sharing, Hervé Dantan has held a Royal Warrant continuously since the reign of Queen has now taken on full responsibility as Cellar Master. Victoria. With this Champagne’s strong Pinot Noir features, the black color, a symbol of refinement, naturally stood out. — www.lanson.com — HOUSES WITH CLEAR IDENTITIES, respecting their heritage 2014 Champagne LANSON, in Reims www.lanson.com REVENUES 276.1 € million House founded in 1760 EBIT LANSON is one of the oldest Champagne Houses. It crafts its wines in the traditional Champagne 33.1 style, avoiding malolactic fermentation during the € million wine-making process. This choice, guaranteeing a full body, fruitiness and freshness, increases the cellaring potential and predestines the cuvees for ageing, enabling them to fully express their rich aromatic palette. Present on the five continents, the House enjoys strong positions, particularly in the UK, where its Rosé Label cuvee is the top seller. LANSON Champagnes are distributed across all NET INCOME channels - mass retail stores, wine stores, gourmet food stores, restaurants, bars, hotels - in France and internationally. 16 In 2015 : LANSON is moving forward with € million its long-term value strategy, harnessing the House’s know-how and resources to expand its international footprint. The House’s brand image, the efficiency of its production facilities, the dedication of its teams and the thoroughness of its management represent the foundations for its development. A major EMPLOYEES multi-year investment program (2013-2017) will further improve the quality of its wines, its commercial responsiveness and the reach of its 450 brand. Champagne CHANOINE FRÈRES, in Reims www.champagnechanoine.com // www.tsarine.com House founded in 1730 Founded under the reign of Louis XV, CHANOINE FRÈRES was the first House to be authorized by the city of Epernay to dig a cellar in Champagne. The second oldest Champagne House, CHANOINE FRÈRES, now established in Reims, successfully blends modernity with tradition, with its high-quality, functional production facilities. CHANOINE FRÈRES Champagnes are present in all leading retail stores, with the classic CHANOINE FRÈRES cuvees and the prestigious TSARINE range, a brand that is often in the cinema spotlight. In 2015 : CHANOINE FRÈRES is confirming the commercial success of its TSARINE cuvee both in France and internationally. The House’s value strategy is reflected in the development of its high-end listing TZARINA. This has been combined with dynamic communications and increased listings across traditional networks. To embody its impeccable refinement, TSARINE has unveiled its very latest ambassador, Adriana Karembeu, to be celebrated shortly with the launch of a “Tsarine by Adriana” cuvee. Champagne BOIZEL, in Epernay www.boizel.com House founded in 1834 “One Family, one House, one Tradition”: for over 180 years, the BOIZEL Family have devoted themselves with passion to ensuring the highest standards and crafting outstanding vintages, renowned for their elegance and balance. Distributed in the UK from as early as the 19th century, BOIZEL Champagne has built up a certain renown on this market. It also has a presence in Japan, a country that is home to many enthusiasts of the Brut Rosé and the magnificent Joyau de France. France’s leading mail-order Champagne, BOIZEL Champagne is also distributed through traditional channels for export. In 2015 : BOIZEL is consolidating the House’s positions in France and developing its presence internationally on the best-valued segments. After celebrating its 180th anniversary last year with the 1834 cuvee, BOIZEL has continued to enhance its range of Champagnes with the release of a new vintage, the Grand Vintage 2007. The House is also developing dynamic and daring marketing actions: in particular, new labels will be gracing the Joyau de France collection. Champagne DE VENOGE, in Epernay www.champagnedevenoge.com House founded in 1837 DE VENOGE cultivates a policy of quality and innovation in the purest champagne tradition. Recommended by many prestigious institutions, DE VENOGE is one of the most decorated Champagnes of its generation. Available through selected retail outlets, its extensive range of Champagnes expresses all the region’s rich heritage, the unique features of its grape varieties and the possibilities for marrying blends together. From the Cordon Bleu to the Louis XV cuvee and the Champagne Grand Vin des Princes, the House’s hallmark is easily identifiable through its slogan: “Noblesse Oblige”. In 2015 : DE VENOGE is focusing the House’s development on high-end markets, both domestically and for export.