CONSOLIDATED RESULTS
Current Operating Profit came in at €215.1 million, down 18.6% on a reported basis and 22.0% on an organic basis. This decrease was the result of a 17.0% organic decline in Current Operating Profit from Group Brands, together with the strategic decision to disengage from Partner Brands and the increase in holding costs, mainly due to the organisational changes announced in March 2020.
Current Operating Profit benefited from favourable foreign exchange effects worth €9.1 million in the year: the average EUR/USD exchange rate improved to 1.11 (from 1.16 at 31 March 2019), while the average collection rate (linked to the Group’s hedging policy) over the period came out at 1.16, compared with 1.18 for the period ended 31 March 2019.
Consequently, the current operating margin fell 2.5 percentage points to 21.0% over the full year (down 2.9 percentage points on an organic basis).
Operating profit came in at €195.5 million after taking into account a net operating expense of €19.7 million, including an €18.8 million goodwill write-off partially reducing the amount of Westland’s intangible assets.
Net financial income/expense showed a net expense of €28.0 million over the period, down €4.5 million. This reduction was the result of a further decrease in the cost of gross financial debt and the non-recurrence of the €5.2 million expense stemming from early repayment of the vendor loan by the EPI Group, recognised in the first half of financial year 2018/2019. Conversely, net foreign exchange gains/losses (gains/losses on future foreign currency flows) slightly deteriorated, down €0.7 million.
The tax expense totalled €60.9 million, giving an effective tax rate of 36.3% (33.9% excluding non-recurring items), significantly higher than the rate in the year to March 2019 (29.0% on a reported basis and 28.5% excluding non-recurring items) due to the geographical breakdown of profit and, in particular, the tangible decline in profits in the Asia-Pacific region over the latter part of the financial year.
After taking into account net proceeds of €6.4 million from the disposal of the Czech Republic and Slovakia subsidiaries, net profit attributable to the Group totalled €113.4 million, down 28.8% on a reported basis.
Excluding non-recurring items, net profit attributable to the Group came out at €124.2 million, down 26.9% on a reported basis, while the net margin came out at 12.1%. Excluding non-recurring items, net earnings per share came in at €2.49, down 26.6%.
Net debt stood at €450.9 million, up €107.6 million from the position at the end of March 2019. This was mainly due to lower Group EBITDA and higher capital expenditure and tax cash outflows over the period, as well as a full payment in cash of the dividend for the year 2018/19.
The net debt/EBITDA ratio nevertheless remained at a reasonable level (1.86, compared with 1.19 at the end of March 2019).
The return on capital employed (ROCE) was 16.5% for the year ended 31 March 2020, down 5.0 percentage points year-on-year. This was due to the combined effect of the decline in profitability of Group Brands and continued strategic purchases of eaux-de-vie adversely affecting capital employed.
As announced on April 16th , 2020, the Group will propose to its General Meeting to grant a dividend of €1.00 per share for the year 2019/20, a substantial drop compared to the €2.65 paid last year (which included an exceptional dividend of €1.00). It will also propose an option for the full amount of the dividend to be payable in cash or shares. This reduction is in keeping with the socially responsible measures adopted by the Group since the onset of the ongoing public health crisis.
POST-CLOSING EVENTS
On 30 April 2020, the Rémy Cointreau Group announced that it had acquired the cognac house J.R. Brillet.
On 19 May 2020, the Bruichladdich distillery was certified a "B Corporation".
