Marie Brizard Wine & Spirits — Update 10 November 2015

Marie Brizard Wine & Spirits — Update 10 November 2015

Marie Brizard Wine & Spirits

Analyst avatar placeholder

Written by

Marie Brizard Wine & Spirits

Rebranded with a BiG long-term plan

Food & beverages

QuickView

10 November 2015

Price

€19.97

Market cap

€529m

Share price graph

Share details

Code

MBWS

Listing

Euronext

Shares in issue

26.48m

Business description

Marie Brizard Wine & Spirits (formerly Belvedere SA) is a French producer and distributor of wine and spirits. Products include vodka (Sobieski), whisky (William Peel), Marie Brizard liqueur and Moncigale wine. The company’s largest markets are France, Poland and the US.

Bull

Attractive turnaround story, aided by continued disposal plans. Exit from administration expected soon.

BiG 2018 plan suggests steep earnings growth.

Large strategic shareholders (Diana Holding, La Martiniquaise and Castel) helping growth strategy.

Bear

Continues to operate under administration, which could impede management’s ability to make strategic decisions.

Possible regulatory intervention (eg excise duties) could negatively affect financials.

Continued competitive conditions in key Polish market (3.5% growth in Q2 vs 21% in Q1).

Analysts

Victoria Pease

+44 (0)20 3077 5700

Paul Hickman

+44 (0)20 3077 5704

Belvedere has been rebranded as Marie Brizard Wine & Spirits (MBWS), with an enhanced board, powerful shareholders and ambitious growth plans. Having risen 84% ytd, the shares now trade at a P/E of c 33x 2016e and c 17x 2017e. The investment case is focused on the long-term strategy, where EPS upgrades could be triggered by a new BiG 2.0 plan. A definitive exit from administration would also be an important step forward.

Exiting administration…

Following a breach of covenant in 2008, MBWS has undergone significant debt restructuring (€530m), resulting in heavy equity dilution in 2013. Although its difficulties with creditors now appear to be minimal (only €74m outstanding), MBWS continues to operate under administration. Exiting this status would clearly be beneficial and management hopes to achieve this in the coming months.

…with a BiG 2018 plan…

A new management team has been in place since 2014 and is currently implementing a four-year BiG 2018 target (Back in the Game by 2018). This includes growing the core business by 25-35% and bringing EBITDA margins to 12-15%. The group aims to achieve sales of €420-460m and EBITDA of €50-70m by 2018. The three key pillars of the plan are (1) asset rationalisation – disposing of unprofitable businesses and non-strategic assets; (2) optimisation of production, sourcing, distribution and sales; and (3) the development of flagship brands.

…turning into BiG 2.0 in December

Following its AGM in June, MBWS now benefits from an enhanced board structure, as well as a powerful industrial shareholder base (Diana Holding 17.3%, La Martiniquaise 6.8% and Castel Group 5.6%). These shareholders should be able to assist with top-line growth and provide numerous cost-cutting synergies, and management has indicated a potential uplift in BiG 2018 goals. We expect the upcoming BiG 2.0 plan to reflect these industrial opportunities.

Valuation: Focusing on 2018 and beyond

MBWS has left the Euronext Special Compartment and returned to Compartment B. Its shares have risen 84% ytd and currently trade at a P/E of c 33x 2016e. Clearly, the investment case focuses on management’s long-term 2018 goals, equivalent to a12.5x P/E. Further catalysts would be potential EPS upgrades with the new BiG 2.0 plan, as well as a definitive exit from administration.

Consensus estimates

Year end

Revenue
(€m)

PBT
(€m)

EPS
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/14

467

(18)

(0.69)

0.0

N/A

N/A

12/15e

478

4

0.10

0.0

N/A

N/A

12/16e

394

16

0.61

0.0

32.7

N/A

12/17e

419

36

1.17

0.0

17.1

N/A

Source: Bloomberg

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority (www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584). Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2015 Edison Investment Research Limited. All rights reserved. This report has been prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison's solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are "wholesale clients" for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document.
A marketing communication under FCA rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a "personalised service" and, to the extent that it contains any financial advice, is intended only as a "class service" provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited ("FTSE") (c) FTSE [2015]. "FTSE(r)" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Wincanton — Update 10 November 2015

Wincanton

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free