par OENEO (EPA:SBT)
2023-2024 ANNUAL RESULTS : RECURRING OPERATING MARGIN OF 14.0%, IN LINE WITH EXPECTATIONS - WELL-MANAGED CASH FLOW
| Consolidated Profit & Loss statement (€M) | 2022-2023 | 2023-2024 | Change |
| Turnover | 348.2 | 305.7 | -12.2% |
| O/w Closures | 244.5 | 211.6 | -13.5% |
| O/w Winemaking | 103.7 | 94.2 | -9.2% |
| Recurring operating profit | 54.6 | 42.8 | -21.7% |
| O/w Closures | 45.2 | 36.1 | -20.1% |
| O/w Winemaking | 12.0 | 8.8 | -27.1% |
| O/w Corporate | (2.6) | (2.1) | |
| Non-recurring operating profit/(loss) | (2.4) | (1.1) | |
| Operating profit | 52.2 | 41.8 | -20.0% |
| Financial profit/(loss) | (0.9) | (4.2) | |
| Tax | (10.2) | (8.7) | |
| Net profit | 41.2 | 28.8 | -29.8% |
| Consolidated net profit, Group share | 41.2 | 28.9 | -29.9% |
| Shareholders' equity | 343.0 | 315.0 | |
| Net debt | 29.8 | 64.2 |
Oeneo's consolidated statements for financial year 2023-2024 ended March 31, 2024 were approved by its Board of Directors on June 13, 2024. The consolidated financial statements have been audited in full. The auditors' report will be published once the procedures required for the publication of the annual financial report have been completed.
Following strong post-pandemic growth, Oeneo Group proved resilient throughout the 2023-2024 financial year, a year marked by inventory adjustments by most distributors and a slowdown in investments made by clients who are themselves affected by the decline in wine consumption on a global scale, as well as unfavorable weather conditions in many countries.
Against this backdrop, Oeneo Group posted turnover of over €300 million, with a recurring operating margin of 14.0%, in line with expectations, a financial position that remains healthy and controlled debt.
2023-2024 turnover came to €305.7 million, down 12.2% compared to the record level achieved in the previous year. For the first nine months of the year, the Closures division was heavily impacted by the cyclical downturn in volumes, particularly in the entry-level and mid-range segments, before returning to business levels similar to the previous year in the fourth quarter. The Winemaking division was less impacted, although turnover was down by over €2 million due to the internalization of distribution in one country.
The Group posted recurring operating profit of €42.8 million, representing a recurring operating margin of 14.0%, down 1.6 points on 2022-2023, in line with expectations. This change is attributable to a slight fall in the gross margin, demonstrating the Group's ability to absorb increases in raw material prices, and the lower absorption of fixed costs, due to lower business levels.
Operating profit amounted to €41.8 million, or 13.7% of turnover, after taking into account €1.1 million in non-recurring items.
Financial loss came in at €4.2 million, including a €2.5 million increase in gross financial expenses linked to the rise in market rates and the change in average net debt, and foreign exchange losses of €0.8 million in South America.
After taking a tax expense of €8.7 million into account, net profit, Group share came to €28.9 million, representing a net margin of 9.5%.
Cash flow from operations came in at €48.7 million (compared with €41.0 million in 2022-2023). This strong performance was buoyed by a slight €4.0 million increase in WCR. It more than covered net investments for the year, which totaled €21.1 million, primarily directed towards improving the production facilities of both divisions.
Free cash flow therefore amounted to €27.6 million, up sharply on the previous year (€21.5 million), part of which was used to buy back its own shares (€9.9 million) and to pay interest on debt (€2.7 million).
Shareholders' equity amounted to €315.0 million, after taking into account the €45.3 million dividend payment (€0.70 including a special dividend of €0.35, per share) for 2022-2023. Net debt (including €4.6 million in debt linked to leases as a result of the application of IFRS 16 “Leases”), amounted to €64.2 million at March 31, 2024, limiting the net gearing ratio to 20.3%. Available cash stood at €40.4 million.
The Board of Directors will recommend the payment of an ordinary dividend of €0.35 per share for 2023-2024 at its next Annual General Meeting.
In 2024-2025, Oeneo Group will continue to deploy its strategy focused on high-end market segments and innovation, all while continuing to manage its operating expenses in order to maintain its recurring operating margin.
2023-2024 performance review by division
CLOSURES: Recurring operating margin of 17.1%
The division sold almost 2 billion cork closures bringing turnover to €211.6 million, down 13.5% on the record levels recorded in 2022-2023, centered on the first nine months of the year. In the fourth quarter, business returned to the same level as the previous year, driven by a 7% increase in Diam range sales.
During the year, the Group focused on preserving the market share of its Diam closures in a less buoyant market, amplified by inventory reductions by distributors. The division also continued the divestment of other technological closures in highly competitive high-end market segments.
Recurring operating margin of 17.1%, down 1.4 points on 2022-2023, with a sharp upturn in the second half of the year (20.1% vs. 13.6% in the first half of the year), as the Group reaped the fruits of a favorable product mix and strict operating expense management.
Despite a prevailing wait-and-see approach in the market, the division expects to benefit from the end of inventory adjustments in the supply chain and subsequently improve on the trend that started in the last quarter of 2023-2024, confirming its return to growth in 2024-2025.
WINEMAKING: Recurring operating margin of 11.2% excluding non-recurring items
The division recorded turnover of €94.1 million (€96.3 million excluding the correction of over €2 million linked to the internalization of distribution in one country). Excluding the above non-recurring item and the phase-out of the "wood trading" business (€2.5 million compared with €6.2 million in 2022-2023), "strategic businesses" turnover was down 3.7% on the record level achieved in the previous year.
Recurring operating margin came in at 9.3%. Adjusted for non-recurring items (almost €2.0 million deducted from recurring operating profit), and despite the sharp increase in the price of raw materials (wood), it stood at 11.2%, which is close to the previous year's figure of 11.6%.
The division has made a cautious start to 2024-2025 based on the lack of visibility on the wine market, which is made worse by challenging weather conditions. It will be focusing, above all, on continuing to optimize productivity in order to improve its recurring operating margin.
Oeneo Group will publish its turnover for the first quarter of 2024-2025 on July 22, 2024, after trading.
About OENEO Group
Oeneo Group is a major wine industry player with high-end and innovative brands. Present around the world, the Group covers each stage in the winemaking process through two core and complementary divisions:
- Closures, involving the manufacture and sale of cork closures, including high value?added technological closures through its DIAM, MYTIK and SETOP ranges, and
- Winemaking, providing high-end solutions in winemaking and spirits for leading market players through its cooperage brands Seguin Moreau, Millet, Galileo and Boisé, and developing innovative solutions for the wine industry with Vivelys (R&D, consulting, and systems).
We are passionate about the art and culture of wine, conscious of the urgent environmental and societal challenges facing our world, and firmly believe that enlightened innovation must serve the common good. We want to use our strengths and expertise to serve the wine industry's sustainable development as we innovate to uphold the great history of wine.
WE CARE ABOUT YOUR WINE
INFORMATION AND PRESS RELATIONS
| Oeneo | Actus Finance | |
| Philippe Doray Chief Administrative and Financial Officer +33 (0)5 48 17 25 29 | Guillaume Le Floch Analysts – Investors +33 (0)1 53 67 36 70 | Fatou-Kiné N'Diaye Press – Media +33 (0) 1 53 67 36 34 |
Appendices
Balance sheet
| ASSETS | March 31, 2024 | March 31, 2023 |
| Goodwill | 47,480 | 47,475 |
| Intangible assets | 8,150 | 8,398 |
| Property, plant & equipment | 144,267 | 143,584 |
| Financial assets | 3,330 | 3,743 |
| Deferred taxes | 2,476 | 2,643 |
| Total non-current assets | 205,703 | 205,844 |
| Inventories and work in progress | 163,013 | 164,723 |
| Trade and other receivables | 88,006 | 88,063 |
| Tax receivables | 2,629 | 1,019 |
| Other current assets | 2,020 | 2,061 |
| Cash and cash equivalents | 40,370 | 30,286 |
| Total current assets | 296,038 | 286,152 |
| Assets related to operations held for sale | - | - |
| Total assets | 501,741 | 491,996 |
| LIABILITIES | March 31, 2024 | March 31, 2023 |
| Paid-in capital | 65,052 | 65,052 |
| Share premium | 35,648 | 35,648 |
| Reserves and retained earnings | 185,338 | 201,108 |
| Profit for the period | 28,850 | 41,164 |
| Total shareholders' equity (Group share) | 314,889 | 342,973 |
| Minority interests | 72 | 58 |
| Total shareholders' equity | 314,961 | 343,031 |
| Borrowings and debt | 89,003 | 46,865 |
| Employee benefits | 2,378 | 2,400 |
| Other provisions | 27 | 0 |
| Deferred taxes | 4,500 | 4,202 |
| Other non-current liabilities | 9,133 | 9,811 |
| Total non-current liabilities | 105,041 | 63,279 |
| Borrowings and short-term bank debt (portion due in less than 1 year) | 15,605 | 13,253 |
| Provisions (portion due in less than 1 year) | 1,031 | 475 |
| Trade and other payables | 61,403 | 69,803 |
| Other current liabilities | 3,700 | 2,154 |
| Total current liabilities | 81,739 | 85,686 |
| Liabilities related to operations held for sale | - | - |
| Total Liabilities and Shareholders' Equity | 501,741 | 491,996 |
Profit and loss statement
| In thousands of euros | March 31, 2024 | March 31, 2023 | |
| Turnover | 305,728 | 348,239 | |
| Other operating income | 219 | 1,800 | |
| Cost of goods purchased and change in inventories | (128,293) | (146,579) | |
| External costs | (52,883) | (66,505) | |
| Payroll costs | (59,473) | (63,518) | |
| Tax | (2,097) | (1,895) | |
| Depreciation and amortization | (18,895) | (17,839) | |
| Provisions | (1,902) | (1,226) | |
| Other recurring income and expenses | 402 | 2,157 | |
| Recurring operating profit | 42,806 | 54,636 | |
| Profit/(loss) on disposal of consolidated equity interests | - | - | |
| Other non-recurring operating income and expenses | (1,052) | (2,446) | |
| Operating profit | 41,754 | 52,190 | |
| Income from cash and cash equivalents | 224 | 15 | |
| Cost of gross debt | (4,451) | (1,765) | |
| Cost of net debt | (4,226) | (1,750) | |
| Other financial income and expenses | 68 | 831 | |
| Profit before tax | 37,597 | 51,271 | |
| Income tax | (8,749) | (10,190) | |
| Profit after tax | 28,848 | 41,081 | |
| Net profit of companies accounted for by the equity method | 16 | 79 | |
| Net profit | 28,864 | 41,159 | |
| Net income from continuing operations | 28,864 | 41,159 | |
| Minority interests | (14) | 5 | |
| Group net profit from continuing operations | 28,850 | 41,164 | |
| Group net profit from discontinued operations | - | - | |
| Net profit from consolidated operations | 28,864 | 41,159 | |
| Group net profit | 28,850 | 41,164 | |
| Consolidated earnings per share (in euros) | 0.45 | 0.64 | |
| Earnings per share from continuing operations (in euros) | 0.45 | 0.64 | |
| Diluted earnings per share from consolidated operations (in euros) | 0.45 | 0.63 | |
| Diluted earnings per share from continuing operations (in euros) | 0.45 | 0.63 |
CASH FLOW STATEMENT
| In thousands of euros | March 31, 2024 | March 31, 2023 |
| CASH FLOW LINKED TO OPERATIONS | ||
| Consolidated net profit | 28,864 | 41,159 |
| Profit/(loss) from discontinued operations | - | - |
| = Consolidated net profit from continuing operations | 28,864 | 41,159 |
| Elimination of the share in profit of companies accounted for by the equity method | (16) | (79) |
| Elimination of amortization and provisions | 21,245 | 19,464 |
| Elimination of disposal and dilution gains and losses | (221) | (56) |
| Elimination of dividend income | (170) | (170) |
| Expenses and income linked to share-based payments | (925) | 2,292 |
| Other income and expenses with no impact on cash flow | - | - |
| = Cash flow after cost of net debt and tax | 48,777 | 62,610 |
| Tax expense | 8,749 | 10,190 |
| Cost of net debt | 4,226 | 1,750 |
| = Cash flow before cost of net debt and tax | 61,753 | 74,550 |
| Tax paid | (9,036) | (10,316) |
| Change in WCR linked to operations | (3,997) | (23,216) |
| = Net cash flow linked to operations | 48,720 | 41,019 |
| CASH FLOW LINKED TO INVESTMENTS | ||
| Impact of changes in scope | - | - |
| Acquisitions of property, plant & equipment and intangible assets | (21,536) | (19,282) |
| Acquisitions of financial assets | - | (1,350) |
| Disposals of property, plant & equipment and intangible assets | 364 | 958 |
| Disposals of financial assets | - | 11 |
| Dividends received | 170 | 250 |
| Change in loans and advances | (56) | (76) |
| = Net cash flow linked to investments | (21,058) | (19,489) |
| CASH FLOW LINKED TO FINANCING ACTIVITIES | ||
| Transactions with minority interests | - | (315) |
| Acquisitions and disposals of treasury shares | (9,945) | (3) |
| Loans issued | 51,974 | 154 |
| Repayment of loans | (11,834) | (12,532) |
| Net interest paid | (2,686) | (1,384) |
| Parent company dividends | (45,283) | (38,887) |
| Minority interest dividends | - | - |
| = Net cash flow linked to financing activities | (17,774) | (52,966) |
| Impact of changes in foreign exchange rates | (345) | (195) |
| Change in cash from continuing operations | 9,543 | (31,631) |
| Opening cash position (net of bank debt) | 28,687 | 60,318 |
| Closing cash position (net of bank debt) | 38,229 | 28,687 |