Operational improvement on the new subsidiaries. BCC1 achieved a clear improvement in its performance over 2007, with 51.97 million euros in EBIT, an operating margin representing 14.5% of revenues, and strong growth in net income (Group share), up to 21.37 million euros.2
CONSOLIDATED EARNINGS (AUDITED DATA)
2007 represents the first year to fully benefit from the new configuration resulting from the acquisition of Maison BURTIN and Champagne LANSON in March 2006. Indeed, 2007 notably factors in the cost of 12 months financing for the acquisition, as well as
the cost of stock for the new subsidiaries (compared with nine months in 2006). In light of this significant change in scope, it is not particularly relevant to compare 2007 against the figures
published for 2006. It is therefore useful to also compare them against the pro forma figures for 2006.
GROWTH IN BUSINESS
In a Champagne wine market that is trending up (+5.3% in volume, 12 months 2007, source:CIVC), the BOIZEL CHANOINE CHAMPAGNE Group generated 359.42 million euros in revenues
over 2007, compared with 311.31 million euros at December 31st, 2006. This figure factors in the balance for the stock reduction program, representing 37 million euros in 2007, compared
with 45 million euros in 2006. Independently from the volume taken out of stock, 21.68 million bottles were sold over the year, compared with 20.99 million bottles over 12 months in 2006
(+3.3%). Export revenues accounted for 46% of total volumes, compared with 45% in 2006.
This growth in business reflects:
- On the one hand, the integration of Maison BURTIN and Champagne LANSON over 12 months (253.06 million euros, with 37 million euros corresponding to the balance for the stock reduction program), compared with nine months in 2006 (223.31 million euros, with 45 million euros corresponding to the first part of the stock reduction program);
- On the other hand, growth in business for Houses from the former scope: 117.39 million euros, compared with 89.99 million euros in 2006. Excluding the brokerage subsidiary CGV (Champenoise des Grands Vins), whose revenues are traditionally subject to significant fluctuations, sales on the former scope would have come out at 91.08 million euros, compared with 81.38 million euros in 2006 (+11.9%).
On a commercial level, efforts have focused on developing the various high-end segments. The repositioning of the Lanson, Besserat de Bellefon and Alfred Rothschild brands has been
accompanied by the necessary price hikes and supported by targeted marketing actions, notably over the end-of-year period.
CLEAR IMPROVEMENT IN PROFITABILITY
The Group recorded 51.97 million euros in EBIT, compared with 37.24 million euros in 2006, giving an operating margin of 14.5%, up from 12.0% in 2006, primarily reflecting three factors:
1. The more effective management of costs in the new Maison BURTIN and Champagne LANSON subsidiaries (acquired in March 2006),
2. The gradual increase in sales prices for bottles distributed by these subsidiaries, as well as a better product mix for the Group as a whole,
3. The good level of volumes sold.
Financial expenses totaled -19.53 million euros, compared with -15.05 million euros in 2006, reflecting the integration of the new subsidiaries over 12 months instead of nine. They have been kept under control thanks to the increase in the proportion of fixed-rate financing: 74.4% of net financial debt at December 31st, 2007, compared with 57.9% at December 31st, 2006.
Pre-tax earnings came to 32.44 million euros, compared with 22.19 million euros in 2006 (+46.2%).
Corporate income tax totaled 11.07 million euros, compared with 7.38 million euros in 2006 (+50%). Net income (Group share) is up +44.3% to 21.37 million euros, compared with 14.81 million euros in 2006.
It is important to note that consolidated income has been impacted by various non-recurring operations (various write-backs, departure-related costs, balance on disputes, etc.), with a negative net balance of 3.73 million euros in income tax over 2007, compared with a positive net balance of 1.91 million euros in 2006. If we exclude these non-recurring items and the stock reduction program, which has now been completed, net income would have come out at 25.10 million euros in 2007 (restated 2007), compared with 12.18 million euros in 2006
(restated pro forma), representing an increase of 106.1%.
CLEAR AND STRENGTHENING BALANCE SHEET
Shareholders’ equity represented a total of 122.11 million euros, compared with 97.22 million euros at December 31st, 2006 (+25.6%).
Consolidated net debt came to 494.03 million euros, down -10.6% in relation to the end of December 2006, including 100 million euros in acquisition debt. The value of stocks on the balance sheet was 432.84 million euros.
DIVIDEND FOR 2007
The Board of Directors of BOIZEL CHANOINE CHAMPAGNE will be submitting a proposal at the Ordinary General Shareholders’ Meeting on May 23rd for a dividend of 0.40 euros per share, to
be paid out on June 3rd, 2008.
OUTLOOK
Following a good year in 2007, BOIZEL CHANOINE CHAMPAGNE is looking ahead to 2008 with confidence. Indeed, the Group’s sales are continuing to trend up and the price hikes made
necessary by the change in grape prices are being well accepted by clients.
The Group is forecasting stable volumes combined with higher profitability thanks to the continued improvement of its productivity on the one hand, and its product mix on the other.
[Source: Boizel Chanoine Champagne Group]
- ABOUT BOIZEL CHANOINE CHAMPAGNE
Listed on EUROLIST, Compartment B, Boizel Chanoine Champagne fully owns seven Champagne Houses:
- Champagne Boizel (Epernay), French mail-order market leader, with wines distributed in the
traditional sector for international markets.
- Champagne Chanoine Frères (Reims), wines intended primarily for the mass retail market (Chanoine brand), notably with the Tsarine Grande Cuvée range.
- Champagne Philipponnat (Mareuil sur Aÿ), which owns the prestigious Clos des Goisses, with wines available on selective retail markets.
- Champagne De Venoge (Epernay), also sold on selective retail markets, notably with its new Louis XV vintage.
- Champagne Alexandre Bonnet (Les Riceys), owner of a vast vineyard (wine sold in traditional sectors), as well as the Ferdinand Bonnet brand.
- Maison Burtin (Epernay), a mass retail supplier and owner of the Besserat de Bellefon brand, distributed through traditional networks (restaurants, wine stores).
- Champagne Lanson (Reims), the prestigious international brand. [↩] - Stock market chart [↩]
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