Annual Report
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2019 Annual report Annual report 2019 ANNUAL REPORT Inde04 x A FEW WORDS FROM THE PRESIDENT Osborne at a 2019 in Figures ..........................................................................08 Glance Highlights of the Year ................................................................12 06 From Spain to the Rest of the World ...................................16 The History of Osborne ...........................................................22 AUTHENTICITY AND SKILL Market Trends and Environment ......................................... 26 A Unique History and Iconic Brands Our Value Proposition and Business Model ....................27 Our Principles of Corporate Governance .........................30 20 Our Product Portfolio ...............................................................32 2 Index Legacy and Future ...................................................................44 A VISIONARY SPIRIT Our Strategic Plan 2019-2021 ...................................................... 45 Strategy Achievements Over the Year ................................................. 46 42 Sustainable Growth ..................................................................47 A Sustainable Model: Our Commitment to the COMMITMENTS Environment ...............................................................................50 Osborne Our People: At the Heart of Everything We Do...............52 Over 2019 Connecting the Past, Present and Future: 48 Our Commitment to Society ................................................ 54 The Osborne Foundation .......................................................56 3 ANNUAL REPORT 2019 OUR LEGACY AND FUTURE A long- term vision, excellence and constant progress 4 A Few Words From the President The pandemic we are currently living political change. Not many companies can through, which is taking a tremendous say they have not only survived the ebb and toll on the world, causing loss of life, flow of the centuries but flourished, thanks to the hard work of generations past and present. economic despair and financial ruin for Osborne’s long-term vision and constant quest companies, has also given us a chance for excellence have been two pillars which have to reflect upon where we have come kept the company going in good times and from and where we are going. bad. They have meant we have been able to make the very most of periods of prosperity, and not only get through crises of unprecedented proportions but come out stronger. The success we saw over 2019, examples of which you will find throughout this annual he crisis caused by COVID-19 is having report, are a reflection of the diversified nature an undeniable impact on Osborne, not of our company, which is involved in the spirits, T surprising given the importance for the liqueur, wine, Iberian cured meat and restaurant company of the hospitality and tourism industry, industries. We have an impressive product as well as certain markets such as Spain, the portfolio with a good balance of very profitable USA and China, all of which have been hit traditional brands and more innovative ones. hard. However, I do think there are still plenty of However, 2019 now seems like a lifetime ago. reasons to be hopeful about the future. I believe that from a social and economic Right from the start of the outbreak, we have perspective, 2020 will mark a turning point. acted decisively and responsibly at all times. A Regardless of whether the economic impact is particularly salient example of this has been the greater or smaller than that caused by the Wall creation of our Crisis Committee, whose job has Street Crash of 1929, society, and therefore our been (and continues to be) to constantly monitor customers and consumers, will be very different the situation and decide on what steps should indeed. This time round, we don’t just have to be taken to protect our staff and company, as adapt to a simple change in our environment, well as put them into place and then ensure their but create a new Osborne which is able to effectiveness. Moreover, the Board of Directors weather this latest storm and come out stronger. has met on a regular basis since the end of March in order to oversee the work of the Crisis We must also focus on non-financial aspects, Committee and take decisions as and when which we mentioned in the Non-Financial needed. Information Statement last year and will expand upon in this annual report. I am extremely proud of the exceptional level of commitment shown by everyone at Osborne, Complacency is not an option for us and and am very grateful to our shareholders, constant progress is in our DNA. I firmly believe who have acted diligently by deciding to cut that our ancestors would not recognise Osborne dividends, a very necessary move considering today, but would nevertheless be proud of our the current climate. A big thank you to you all. constant drive to excel whilst remaining faithful to our motto ‘Legacy and Future’. I would like to take this opportunity to remind you that Osborne has been around long enough to experience periods of prosperity, economic Ignacio Osborne Cólogan crises, peace, war, stability, social upheaval and PRESIDENT OF OSBORNE 5 Os bor ne at a glance 6 at a glance 7 2019 ANNUAL REPORT 2019 in Figures MAIN FINANCIAL PERFORMANCE INDICATORS* (€m) Total net revenue 222.4 2018 vs. 2019 + 4.5 (+2%) Net revenue own brands 178.8 2018 vs. 2019 +5.2 (+3%) Net profit 12 2018 vs. 2019 -0.32 (-3%) EBITDA 33.2 2018 vs. 2019 -3.3 (-9%) 4.03 Net debt / EBITDA ratio Net debt of the Group 133.7 2018 vs. 2019 -6.9 (-5%) Our accounts for 2019 show an increase in turnover and net sales in comparison to the previous financial year, mainly due to the growth of our own premium brands. However, this has not had a direct impact on our EBITDA or net profit given the significant investment made to build these brands. €0.6m €5.1m Investment in R&D Capital expenditure (CapEx) * The performance indicators ‘net turnover’ and ‘EBITDA’ differ slightly to those in the consolidated annual accounts due to a difference in the way items have been grouped. 8 OSBORNE AT A GLANCE SALES BY SEGMENT 45% 39% Iberian cured meats Spirits 10% 6% Wine Restaurants TURNOVER BY MARKET – 2018 VS. 2019 (€m) 123.7 119.5 55.1 54.1 2018 2019 2018 2019 Spain International Sales of own brands 9 2019 ANNUAL REPORT NON-FINANCIAL PERFORMANCE INDICATORS Employees 94% 125 11,813 69% Of our staff New indefinite- Hours of Of all management are based in term contracts training vacancies were filled Spain through internal 1,094 promotion The environment 0.142 kWh/€ -2% 0.032 kgCo2eq/€ Energy intensity (kWh/€ Electricity consumption Emission (carbon) intensity of closing stocks) compared to 2018 (kgCO2eq/€ of closing stocks) 2% (vs. 2018) -4% (vs. 2018) We have calculated our energy intensity and emission intensity for the year by taking our total energy consumption and the resulting emissions, and comparing these to the value of our closing stocks. This helps us see how efficient we were in terms of energy input vs. production output. Particularly notable were a reduction in electricity consumption, due to an increase in energy self-sufficiency, as well as a drop in our emission intensity, the result of eco-efficiency measures introduced at the company and the use of renewable energy. Social impact 87% 49 days €1.4m Of all goods and services Average payment period Contribution to foundations were purchased from local for suppliers and non-profits suppliers 10 OSBORNE AT A GLANCE OUR PRESENCE IN SPAIN AND AROUND THE WORLD +70 Countries where we are present 2 China International subsidiaries Brazil +500,000 +50,000 Customers at our restaurants Visitors at our 5 wine tourism centres 31% 6 Of all sales of our own Production sites in brands came from abroad Spain +2% 2018 vs. 2019 11 2019 ANNUAL REPORT Highlights of the Year NORDÉS: SPAIN’S FIRST PREMIUM GIN Nordés became Spain’s first gin to retail at more than €20, and continued to conquer new markets abroad, being recognised around the world as an example to follow in terms of brand building within the spirits industry. CINCO JOTAS: OSBORNE BEGINS EXPORTING ITS FIRST BONE-IN HAM TO CHINA This was a leap forward for the company in terms of its strategy to expand internationally and position itself in the gourmet food market. CARLOS I: CONSTANT GROWTH Carlos I consolidated its position as the leading Brandy de Jerez Solera Gran Reserva and continued to increase its market share in strategic countries. 12 OSBORNE AT A GLANCE Award-winning products and packaging Excellence and creativity INTERNATIONAL RECOGNITION: A REFLECTION OF OUTSTANDING QUALITY AND STRONG POSITIONING In 2019, Nordés was named Gin of the Year by the Spanish Association of Wine Journalists and Writers, and bagged the gold medal in the Spirits Selection by Concours Mondial de Bruxelles. Our old sherries and Montecillo wines have also been recognised by various institutions and associations, receiving accolades at the Decanter World Wine Awards and Bacchus Awards, and being included in the prestigious Guía Peñín and Guía Vinos Gourmets 2020 guides. Finally, the exceptional packaging of Cinco Jotas and our sherries was recognised at the Pentawards and Best Awards. DISTRIBUTION OF DISARONNO AND TIA MARIA IN SPAIN The agreement signed with Illva Saronno confirmed our position as a strategic partner for the distribution of premium brands in Spain. OUR FIRST ANNUAL REPORT In 2019, we continued to make progress in terms of sustainability, reporting and transparency vis-à-vis