Analyst presentation H1 2015/16

18 November 2015

Analyst presentation H1 2015/16

Disclaimer

DISCLAIMER THIS PRESENTATION may contain forward looking statements. These statements are based on current expectations, estimates and projections of Lucas Bols¹s management and information currently available to the company. Lucas Bols cautions that such statements contain elements of risk and uncertainties that are difficult to predict and that could cause actual

performance and position to differ materially from these statements. Lucas Bols disclaims any obligation to update or revise any statements made in this presentation to reflect subsequent events or circumstances, except as required by law.

1.

Lucas Bols at a glance

2.

Highlights H1 2015/16

3.

Operational review

4.

Financials H1 2015/16

Amsterdam 1575

Lucas Bols at a glance

In over 110 countries

24 brands 42 liqueur flavours

Focus on cocktails and genever North America Asia-Pacific Western Europe Emerging Markets FY 2014/15

Strong offering of global brands and regional brands

White Spirits Italian Liqueurs Bols Liqueurs Range

Regional brands

Liqueurs

Value brands Dutch Jenever portfolio

1.

Lucas Bols at a glance

2.

Highlights H1 2015/16

3.

Operational review

4.

Financials H1 2015/16

7

Highlights H1 2015/16

Revenue of € 39.4 million, down 2.9% organically, mainly following one-off stock reductions in Asia-Pacific. North America reports healthy 3.4% organic growth as a result of our strategy for growth.

Free operating cash flow of € 8.8 million (€ 8.3 million in H1 2014/15).

Net profit of € 7.7 million, versus € 2.0 million in H1 2014/15.

Net debt significantly reduced to € 53.5 million, with a net debt to EBITDA ratio of 2.4. Operating profit of € 11.6 million, down 5.3% organically over last year.

Gross margin of 60.8%, at the same level as last year, at constant currency.

EPS

Dividend

Earnings per share of € 0.61.

Highlights regions in H1 2015/16

• Western Europe operated in line with H1 last year.

• Strong performance in the on-trade market in Scandinavia and Southern Europe. • Challenging circumstances in the retail markets Belgium, Germany and the UK. • Positive trend sales of global brands by Maxxium Netherlands.

• In North America we see our market strategy for growth pay-off.

• Good performance of the US market, in accordance with our expectations, leading to healthy organic revenue growth. • Growth in an increasing number of states and a growing customer base.

• Decrease in revenues caused by one-off in-market stock reductions in Australia and South East Asia.

 In Australia adjusted supply chain structure, leads to reductions in warehouses by our local distributor.  South East Asia, in anticipation of a change in distribution partner effective 1 January, 2016.

• The remainder of the Asia Pacific region performed in line with last year.

Emerging Markets

• Emerging Markets showed a slight increase compared to last year.

• Revenues in Eastern Europe (including Russia) were in line with last year.

• In Russia we returned to growth in the market, due to continued A&P investments.

1.

Lucas Bols at a glance

2.

Highlights H1 2015/16

3.

Operational review

4.

Financials H1 2015/16

Lucas Bols’ mission & strategic framework

Mission Lucas Bols

We aim to create great cocktail experiences around the world

Strategic framework Lucas Bols

• To strengthen and grow our global brands in the international cocktail market

• To maintain the competitiveness of our regional brands in regional and local markets

Build the brand equity Lead the development of the cocktail market

Lead the global Cocktail Market

New product innovations

The World’s Oldest Distilled spirit Brand Strong quality recognition

Bols Bartending Academy

Bols Business Class Bols Around the World

Online Bartender Community

Bols.com for inspiration Bols brand ambassadors

Trade shows Leading the cocktail culture

Extensive cocktail database

Global Bols Bartending program

1 2

3

Ensures Lucas Bols to be at the fore front of the cocktail culture and to be the #1 source of inspiration and

education for the global bar industry

BOLS BARTENDING

BOLS BARTENDING SUPPORT

BOLS AMSTERDAM EXPERIENCE

BARTENDING ACADEMY BOLS AROUND THE WORLD BOLS BUSINESS CLASS SEMINARS TRAINER TRAINING ONTRADE ACTIVITIES TRADESHOW SUPPORT

Innovations are drivers for growth

In the past months three new liqueur flavors have been introduced: Bols Date

Bols Pineapple Chipotle Bols Blackberry (relaunch)

Product development

Product innovation is essential for spirits players to differentiate themselves and capture growth.

Introducing new flavours and launching distinctive and appealing packaging are key.

Lucas Bols aims at introducing new products regularly.

US spirits industry – 3-tier system

Lucas Bols USA

24 people dedicated to sales and marketing

MHW – compliance and customer service

Approximately 50 thousand Lucas Bols customer base – 80% on premise and 20% off premise

Consumers

On-premise and retail activation and social media

National manufacturers or suppliers

(Breweries, Wineries, Distilleries and Importers)

State wholesalers

(Licensed importers, Distributors and Control Boards)

Local retailers (Licensed Outlets)

(On Premises: Bars, Clubs, Restaurants (Off Premises: Liquor stores, Grocers)

Consumers

Federal Excise Tax

67 distributors nationwide

Covering 33 open states and 17 control states

State Excise Tax

Lucas Bols’ set up for success in the US

• Strong portfolio of liqueurs and spirits to leverage the growing cocktail trend • Lucas Bols’ route to market in place

• Efficient supply chain / back office model • Dedicated sales and marketing organization • Established nationwide distributor partnerships

• Most advanced sales data insights worldwide; every sku to every account • Account base of approximately 50 thousand nationwide and growing • Bols liqueurs declining trend, reversed to growth

15

Lucas Bols US growth potential

Strongly represented with Lucas Bols USA sales team in the largest states. Leading role with the Bols Liqueurs range within our distributor network; at the center of their spirits portfolio when selling the cocktail.

Unique position with current Bols Liqueurs sales in the on premise (80%) versus the off premise (20%) where the industry standard is reverse.

Growing number of contracts with national and regional on-premise chains.

Known as the cocktail authority with the Bols around the World cocktail competition and the Bols Bartending Academy on tour; educating and inspiring distributors, bartenders and consumers.

Dedicated brand ambassador team in place with Bols Genever within nationwide growing bartender community.

1.

Lucas Bols at a glance

2.

Highlights H1 2015/16

3.

Operational review

4.

Financials H1 2015/16

Corporate P&L H1 2015/16

Highlights

One-off reduction of in-market stocks in Australia and South East Asia:

Reported Organic REPORTED (in €m) H1 2015/16 H1 2014/15 growth growth Revenue 39.4 40.8 -3.4% -2.9% Cost of Sales (15.4) (15.6) GROSS PROFIT 24.0 25.2 -4.9% -2.9% 60.8% 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT 11.6 12.9 -10.3% -5.3% 29.4% 31.7% Impact on revenue of € 0.9 million

19

Important aspects of Lucas Bols’ currency effects

Foreign exchange impact

Rates

Rates

(in €m)

H1 2015/16 H1 2014/15

Delta %

US dollar

USD

1.12

1.27

12.7%

Japense yen

JPY

132.59

118.89

-10.3%

Australian dollar

AUD

1.51

1.44

-4.5%

Russian rouble

RUB

70.00

50.50

-27.9%

60,.8%

Revenue development global and regional brands

40.8 (0.9) (0.2) _(0.2) 39.4 H1 2015/16 Foreign exchange effect Δ Regional brands H1 2014/15 Δ Global brands 65.3% _50.9% 61.8% Gross margin

Group revenue structure (H1 2015/16) Regional brands Global brands 69.0% 31.0% -3.3% -1.9%

Revenue Reported Reported Organic (in €m) H1 2015/16 growth % growth %

21 Revenue structure

(H1 2015/16)

Revenue development per geographical segment

40.8 (0.4) (1.1) 0.2 0.1 (0.2) 39.4 -2.3% -11.1% +3.4% +2.5% H1 2015/16 Foreign exchange effect Δ Emerging markets Δ North America Δ Asia- Pacific Δ Western Europe H1 2014/15

Revenue development at constant currencies (in €m)

47.4% 20.7% 19.2% 12.7% Emerging Markets North

America Western _Europe

Asia-Pacific

Revenue Reported Reported Organic

(in €m) H1 2015/16 growth % growth %

Western Europe 18.7 -1.9% -2.3%

Asia Pacific 8.1 -17.0% -11.1%

North America 7.6 15.4% 3.4%

Emerging Markets 5.0 -7.0% 2.5%

Gross profit development per geographical segment

Gross profit development at constant currencies (in €m)

61.8% 60.8%

Gross margin

23 29.4%

Operating profit development global and regional brands

12.9 (0.2) (0.4) (0.1) (0.6) 11.6 -1.6% -6.9% -1.6% H1 2015/16 Foreign exchange effect Δ Regional brands H1 2014/15 Δ Global brands 44.0% 43.2% 31.7% Operating margin

Operating profit structure (H1 2015/16) Regional brands Global brands 30.6% Δ Unallocated 69.4%

D&A expenses Reported Reported Organic (in €m) H1 2015/16 growth % growth %

Global Brands 5.8 -4.2% -3.0% Regional Brands 0.9 5.1% 5.7%

Unallocated 5.6 5.5% 1.6%

We have maintained healthy margins

D&A expenses were broadly stable at last year’s level.

Transfer of the blending and bottling of Bols Vodka to our production joint-venture Avandis.

Overall, gross margin stable at last years level and operating margin down 80 bps.

Brands’ reported gross margin development

% of organic revenue

Gross

Gross

Operating Operating

Delta H1 2014/15 - H1 2015/16

Profit

Margin

Profit

Margin

Company

24.0

+0 bps

11.6

-80 bps

Global Brands

17.8

+90 bps

12.0

+80 bps

25

Post IPO significantly lower finance costs

REPORTED (in €m) H1 2015/16 H1 2014/15 Revenue 39.4 40.8 Cost of Sales (15.4) (15.6) GROSS PROFIT 24.0 25.2 60.8% 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT 11.6 12.9 29.4% 31.7%

Share of profit of JV, net of tax 0.0 0.0

EBIT 11.6 13.0

29.5% 31.8%

Finance costs (1.3) (9.0)

PROFIT BEFORE TAX 10.3 3.9

Income tax expense (2.6) (2.0)

PROFIT FOR THE PERIOD 7.7 2.0

Finance costs

(in €m) H1 2015/16 H1 2014/15

Senior debt (& Mezzanine) 1.2 4.6

Cum. preference shares 0.0 3.9

Income Tax Expense

Share of profit of JV, net of tax 0.0 0.0

EBIT 11.6 13.0

29.5% 31.8%

Finance costs (1.3) (9.0)

PROFIT BEFORE TAX 10.3 3.9

Income tax expense (2.6) (2.0)

PROFIT FOR THE PERIOD 7.7 2.0

Tax (in €m) H1 2015/16 H1 2014/15

Profit before tax 10.3 3.9

Cum. Pref. Dividend - 3.9

Result/ Dividend subsidiaries 0.0 0.0

10.3

7.9

Tax Expense (2.6) (2.0)

27

Net profit

Highlights

Earnings per share of € 0.61

Interim cash dividend of € 0.31 per share Number of shares outstanding are 12,477,298

REPORTED (in €m) H1 2015/16 H1 2014/15 Revenue 39.4 40.8 Cost of Sales (15.4) (15.6) GROSS PROFIT 24.0 25.2 60.8% 61.8% D&A Expenses (12.4) (12.3) 31.4% 30.1% OPERATING PROFIT 11.6 12.9 29.4% 31.7%

Share of profit of JV, net of tax 0.0 0.0

EBIT 11.6 13.0

29.5% 31.8%

Finance costs (1.3) (9.0)

PROFIT BEFORE TAX 10.3 3.9

Income tax expense (2.6) (2.0)

Balance sheet

Net working capital in line with H1 2014/15

Highlights

Deferred Tax (in €m) H1 2015/16 H1 2014/15 FY 2014/15

Deferred tax assets (8.1) (7.2) (9.3) Deferred tax liabilities 30.7 28.6 29.4 Total 22.6 21.4 20.0

Traditional higher working capital in first half year

Assets (in €m) H1 2015/16 H1 2014/15 FY 2014/15

Intangible assets 214,9 214,9 214,9 Investments in joint-ventures 5,1 5,7 5,1 Other 2,0 2,2 2,0 Non-current assets 222,0 222,8 222,1 Cash and cash equivalents 3,8 2,9 0,6 Net working capital 16,9 17,1 14,5 Total 242,7 242,9 237,2 Funded by:

Liabilities & equity (in €m) H1 2015/16 H1 2014/15 FY 2014/15

29 (0.1) 0.2 (0.2) (0.0) (2.7) 8.8 8.3 Δ NWC (Capex) D&A (Taxes) Operating profit 11.6 H1 2014/15 FOCF

Continued high cash generation

(Other items)

H1 2015/16 FOCF

Free Operating Cash Flow H1 2015/16 Delta vs.

(in €m) H1 2014/15

Operating profit 11.6 (1.3)

Taxes (0.1) (0.1)

Depreciation & amortisation 0.2 (0.0)

Capital expenditure (0.2) (0.0)

Other items (0.0) 0.4

Δ Working capital (2.7) 1.5

1.

Lucas Bols at a glance

2.

Highlights H1 2015/16

3.

Mission & strategy

4.

Financials H1 2015/16

31

Outlook

Further development in our global brands, due to an on going improvement in the global economies, contributing to a growing cocktail culture.

Less impact from currency fluctuations expected on operating profit in the second half, due to hedges in place.

Lesser effect of one-off stock reductions in Asia Pacific.

Continued focus on accelerated growth of our brands in the US, with our organisation Lucas Bols USA. Continued long-term growth of the global brands and stabilisation of the regional brands.