- Strong operating cash flow; net debt reduced
Highlights first half year 2020/21
Revenue came in at € 26.8 million, down 42% compared to last year as a result of the significant impact of COVID-19 and related substantial destocking by distributors
Depletions (sales by distributors) were down 20% in the first half of the year, which should be taken in the context that over half of Lucas Bols’ business is normally conducted in the on-trade
The second quarter showed a recovery of depletions to -5% compared to last year, driven by strong growth in the UK, Australia, China and the US
Current in-market stock levels are relatively low, therefore shipments and revenue are expected to follow depletions more closely in the second half of the year
The gross margin was down 180 bps vs last year to 56.7% due to a higher retail share of revenue combined with a negative currency impact
Overhead and A&P costs were reduced by € 4.3 million (-32% vs last year) as a result of strict cost-cutting measures whilst balancing investments behind our brands
The operating free cash flow improved by 8% to € 9.6 million thanks to our strong focus on working capital and cash management
This solid cash generation enabled Lucas Bols to reduce its net debt by € 6.6 million to € 92.7 million at 30 September 2020
Operating profit came in at € 5.3 million, net profit amounted to € 1.9 million
Agreement reached with Pallini to distribute their limoncello brand in the US which is expected to add USD 3.5 million in net revenue on an annual basis
The global relaunch of the Bols liqueurs range now crafted with Natural Botanicals has started to hit the markets with strong retail and on-trade reception
Huub van Doorne, CEO Lucas Bols: “As witnessed in the whole global economy and particularly in our industry, the impact of COVID-19 is significant but in line with what we anticipated. Lucas Bols is an on-trade driven company and on-trade channels in most of our markets were closed during the first quarter of our fiscal year. Nevertheless, as of the second quarter we saw depletions recovering strongly – faster than we expected and even bouncing back to pre-COVID levels in several key markets including China, the US, the UK and Australia. From a brand perspective Passoã and Galliano were important contributors to this recovery. As distributors reduced and optimised their inventories in the first half of the year, we expect shipments and revenue to follow depletions more closely in the second half.
We took decisive actions right from the beginning. Not only short-term cost reductions and cash management measures, but also longer-term measures that will structurally reduce our cost base. These measures partially offset the effect of COVID-19 on profitability. Even in challenging times like these, Lucas Bols continues to be profitable and cash-generative. We have enough headroom to meet the revised covenants we agreed with the banks. With strict working capital management we were able to improve our operating free cash flow and further reduce net debt.
Lucas Bols’ asset light business model, combined with our strong market insights, allow us to respond quickly where we see markets opening up again. While the road to full recovery is uncertain, with volatility caused by COVID-19 continuing in the second half, I have full confidence in the resilience of our brands. Moreover, the Lucas Bols team has shown creativity, flexibility and a steadfast and tireless commitment in these difficult times. I am confident that we will emerge from this crisis as a stronger company.”
201119 Lucas Bols press release - Half-year results 2020-21.pdf
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