Remy Cointreau Unsp/Adr

Good morning to all of you. We are here to present our first half result for our fiscal year 2021. As usual, I'm going to make an introduction. Then our chief executive officer, Eric Valla, will make for you the business review of that first semester. And as usual, and As also for many times before, our Chief Financial Officer, Luca Marotta, will give you a detailed review of our financial results. Of course, after that, we will be ready to answer to your questions. So, you have already seen this morning our results. 1920 was a singular year. Remember that we were nearly all closed down with no operations, nearly no sales at the end of last fiscal year. So 1920 was quite singular. But 2021 started also singular. on a very difficult position for us. With COVID-19 taking its toll on traveling, gifting, gathering, and celebrations, which are the key moments of our spirits. These are the times when people are delighted to drink one of our fine spirits or are ready to buy, well, were ready in the previous regular years, were ready to buy one of our top quality bottles, thinking of a very nice time where they could celebrate with others. So at the beginning of this fiscal year, we had lost all this. But the truth is that despite that global pandemic, The group has managed to revise up its sales and earnings outlook consistently on the last six months. And in fact, we expect to deliver a very, very strong year, 2021, in spite of that context. We think that the group's experience of crisis, its size and agility the amazing commitment of all its employees who worked effortlessly to keep back the company on track, and last but not least, the strengths of our spirits brand equity are making the difference. So, in this first half, our sales declined by nearly only 18%. Why do I say only? It's because we had a very, very low first quarter, but we recovered very much on the second quarter. And our operating margin remained strong at 24%, 24.7%. And our net profit margin, excluding non-recurring items... is only down one point to 15.1%. On September 30th, our balance sheet is extremely strong with a net debt EBITDA ratio of close to two. So clearly, having been around for centuries helped in these challenging times.

Thank you very much, Mark, and good morning to everyone. I am now going to take you through the business review, and then I will give the mic to Luca Marotta, who will deep dive in the financials. And I will start by saying a few more words on our good margin resilience, as was explained by Mr. Ayer-Dubreuil. Our sales were down 16.4% despite and amid the global pandemic, very much impacted by COVID-19, obviously. and in particular by the weakness of the on-trade channel, as we witnessed from the first quarter across the world, and the collapse in duty-free sales. But this was partially offset by strong off-trade consumption in a number of markets, such as the U.S., the U.K., or Australia, driven notably by e-commerce, but I'll get back to it, but also by the recovery in China, which was gradual but started earlier than what we expected. We had expected a gradual recovery from June and a full recovery in September. Actually, as I said earlier and before, the recovery was almost full speed already last summer with the famous 80-80-80, 80% of the on-trade reopened, 80% of a frequency rate, as well as 80% of the people not wearing their masks anymore. The group sales were down in Q2 4%, which highlights, let's say, not yet a full recovery, but a much better Q2 compared to the initial decline of 33% in Q1. But we will get back to it. In that context, we are pleased with the resilience of our current operating margin, which is standing at 24.7%. This is significant. 2% below last year in organic terms due to the lower gross margin and the better control of our costs on the other side to compensate. But I will further detail. So the gross margin was down two points in H1. But if you look at it over two years, it's actually a gain of two points. As I remind you that last year, we had gained in H1 four points versus the year before. This is due to less celebration, less gifting and less travel retail, which is more particularly impacting the higher range of our portfolio. The ANP ratio was done 0.6% as a percentage of sales. So as you can see, we maintained it, relatively speaking, as in fact the cut in non-strategic investments was partially offset by a significant step up in digital spent, which increased by 135% versus last year. As I said, the distribution and structure costs were well under control, and the ratio is only up 0.4% versus last year. Lastly, and to conclude, we had a slightly favorable impact on the currency side of 0.2%. So all in all, our net profits stand at 65.2 million euros, minus 23%, but the net profit margin stands at a strong 15.1%. If you look at the sales growth by product division, Well, you will see that cognac recorded a minus 18.1% in organic versus last year. This is H1. But Q2 showed a significant improvement as the downside was limited to 2.5% versus a 39% drop in Q1. So we are on the path of recovery, and this will reflect in our expectations for the coming quarters. The liquors and spirits also improved in Q2, although to a much lower extent, with Q2 down 11% compared to 17% in Q1. And partner brands grew 2.1%, led by a strong 26% increase in Q2, and I will further explain later on. Now looking at the breakdown of the sales by product division. As you can see, it did not change much. Cognac is still obviously very important in our portfolio with 71% of sales coming from our cognac brands and 26% coming from our liquors and spirits. I would say that the most noticeable change is on the regional split, which is very much influenced by the pandemic and the very good resilience of the U.S. within America. America is now accounting for 53% of our sales in H1, while this has been at the expense, relatively speaking, of Asia-Pacific. which decreased from 31% last year to 27% this year, and EMEA, which decreased from 24% to 20%. But let's look at it more in detail. So if you look at it by division, the split by region by division, cognac achieved 305 million euros with America's achieving 57 percent led by the U.S. despite a slowdown in Canada, in the Caribbean and in travel retail. This is due to the very strong resilience and I would say even more the performance of off trade in the U.S. But we will have more opportunity to detail. While Asia Pacific was clearly impacted by a much stronger lockdown than in the U.S., we shall remember that on the first quarter of the year, In China, everything was locked down. And when we say everything locked down, it means that one person per building was authorized to go out to buy for the whole building, the food and beverage in the single store that was specifically open for it. So this was a complete lockdown, which does not compare to that of the U.S., which is why China has been much more impacted in Q1. And we saw a quick rebound afterwards. And obviously, Europe and the Middle East impacted by the lockdowns as well. And a stronger exposure to on trade. But I'll get back to it as well. If you look at the liquors and spirits, we have the same kind of phenomenon with America's growing to 51% versus 46% last year. Again, a very good performance of Cointreau and of our whiskeys. Now looking at the COP. In reported terms, we were minus 23.2%. This includes a currency impact of 1 million euro with a weaker dollar and no impact on the scope. So if you look at the organic decrease, it's 22.5% decrease with a strong 66 million impact, obviously of the volume and the price mix and the price in the mix. This is related to the fact that, as I said, gifting, travel, retail and celebration have been toning down, impacting the higher end of our portfolio and our product mix. While also we decided, as we explained last time, to postpone our price increases, as we believe that April last year was not the appropriate timing, given the fact that the world was totally locked down. ANPs were, as you can see, controlled with a savings of 15 million euros, 16 million euros. Again, strategic cuts being partly offset by very strategic investments and digital investment in general. And a good control of our costs, generally speaking, whether it's T&Es, whether it's fees or structural costs. which helped us achieve in organic terms a COP that stands at 24.5% of our sales compared to the 26.4% of last year. Net profit. Well, as mentioned earlier, net profit excluding non-recurring items declined by 23% versus last year. Including non-recurring items, net profit declined by 28.1%. As you shall remember that last year, we benefited from the disposal of our Czech Republic and Slovakian subsidiaries for an amount of 6 million euros. Now, looking at cognac more specifically, as I said, the sales declined 18.1%. This is a combination of a decline of volumes by 8.1% and of value price mix negative impact by 10%. Asia-Pacific. Declined double digits in H1 as growth in China mainland and Taiwan, which started from again end June, beginning July, was more than offset by the decline in most other markets and travel retail. China mainland, now we see a double digit value depletion trends increase since end June, driven by the on trade being largely reopened. And we've witnessed a strong Mid-Autumn Festival and a very strong Double Eleven. We were the best performing international brand on JD.com and on Tmall as well. And this clearly bodes for a promising Chinese New Year. A real difference between first and second quarter and expectations on China to keep growing in the coming months, which are key for China. America's posted a slight growth in the first half, led by a good performance in the U.S., albeit well below the sell-out trends that we've been experiencing, important to notice. And this has been mitigated by, as I said, Canada or Latin America and travel retail, which were much weaker, exposed to tourism much more than the U.S. And lastly, EMEA dropped and dropped a double digit. This is due to the weakness across most domestic markets and travel retail. Again, impacted by lockdowns except for this summer where we witnessed growth in some of our countries. The UK was a dynamic market, unlike the others, led by a strong off-trade consumption and particularly digital off-trade consumption. Now, looking at the marketing initiatives. Well, despite the challenging pandemic context, we've been working on two things. One is getting stronger during the pandemic crisis, and the other one is preparing the future. So this slide is about getting stronger during the pandemic crisis. We believe we can leverage it despite the drama it is, of course, but also as an opportunity business-wise, even though it's impacting us short-term. So we try to take advantage of our agility and our client-centric mindset to adjust to the situation and to strengthen further the brand equity of our brands. And in fact, we think that not everything is negative, as I said, during lockdowns and COVID. In fact, people have more time to spend on being educated. They are more receptive. They also have more money to spend because they're saving on travels and so on. and we witnessed that. We saw a move towards an upmarket move, which we believe Cognac benefited from particularly. I remind you that Cognac market share among the spirits in the U.S. is only 6% pre-COVID, so it's a small market share compared to its overall awareness, and we grew to 7%. I remind you that 25% of the spirits, brown spirits, high-end brown spirits drinkers only drink cognac and 25%, another 25% are considering. So the opportunity is potentially massive for cognac in general. And we've benefited from this time for education probably more than some other categories. We saw an uptrade from brandy and we saw also a move from other brand spirits to cognac that we strongly benefited from. Now it's going to be our job to build on this, but we've gained time in educating on cognac. This is for sure. The second trend we witnessed is the amazing growth of e-commerce worldwide from plus 300% in the U.S., 200% in the UK, 32% in China. This is what we see globally, a very strong acceleration on e-commerce that we also focused on benefiting from, which is why you see three marketing initiatives, let's say three types of marketing initiatives that we wanted to highlight. One on education, on the product superiority. people having more time to dedicate to this. One on at-home entertainment, obviously, in the context to increase brand relevance with animations around the flavor by the grid, food pairing, and associations with DJs and others to have your parties at home. And leveraging, obviously, e-commerce. You have a lot of initiatives worldwide. That one is enhancing the Rémy Martin sidecar that was displayed in Drizzly. On the marketing initiatives, we also are investing on our future. focusing notably on a more client-centric approach and aiming at a more client-centric model, which is one of our pillars for 2030, as you all know. So we've opened new pop-ups. This pop-up you see on the top is an opening that we had in Xiamen for Rémi Martin, very impactful in the very heart of the mall. in Xiamen, and you see two openings of Luitres, one in Shenzhen and one in Hangzhou that took place during the Q2 of the year. So we keep moving forward there. And we also enhanced, obviously, e-commerce as an opportunity for us to acquire client data with the opening of our proprietary e-commerce site in the UK for Luitres. And we've been strengthening our CRM operations. Here you have an example of one of the WeChat programs we've been working on in the UK, allowing to acquire data as well as selling directly to our clients. All in all, what does it translate into? A reported decline of 26.3% for cognac in general. with a slight negative effect from currencies due to the weakening of the U.S. dollar since last summer. But the scope was marginally positive thanks to the initial consolidation of Brille Cognac brand since April. Now, if you look at it in organic terms, it's a decrease of minus 25.1%. And like you saw for the group, cognac cup has been strongly hit by declining volumes. As I said, as a reminder, 8%, but also by adverse price mix. As already mentioned, less celebration and gifting, which impacted the mix. Besides, price increases were delayed to October 1st. They are now and they have taken place now. This has been partially offset by savings in ENP. Not that much, though, as you can see, because we cut non-strategic investment. But again, we insisted and we maintained our strategic investment, particularly on digital. And the main offset came from the other costs, which were pretty well controlled with the minus 15 million euros. even better than what we had initially planned, thanks to the different cost-cutting measures that took place and that I listed when I spoke of the group in general. So overall, the COP margin decline is 2.8 as a ratio to 30.6%. This is it for cognac, switching now to the liquors and spirits. As you can see, the decline is 14%. It's a mix of a 19% decline in volumes, but a positive price mix of 5%, thanks to the good performance of Cointreau in the U.S. and the whiskey portfolio, which has been doing extremely well, except in travel retail, of course. If you look at it by brand, we have a slight organic sales decline for Cointreau, thanks to a robust growth in the U.S., in the U.K., in Germany, in Belgium, and in Australia. In some of these countries, we had initiated campaigns that we've been steadily investing behind, and this starts paying off. This was offset by the weakness in the rest of Europe, Asia-Pacific, and obviously travel retail. If you look at Metaxa quickly, we've witnessed double-digit organic sales declined. You have to bear in mind that Metaxa is pretty much exposed to tourism, particularly in Greece in summer, obviously, but also to travel retail. Saint-Rémy, we saw also a double-digit decline, which is also largely due to a strong exposure to travel retail. While in fact, the brand enjoyed a strong growth in one of its key domestic markets for the future, the U.S., where the brandy-based Sangria cocktail has been very successful over the summer. Mount Gay, same exposure to Barbados, which has been struggling, and exposure to travel retail, so a double-digit growth decline. But this also hides good growth in the U.S. and in the U.K., despite the reshuffling of the portfolio, which we expected to impact more the sales negatively. And the botanists, again, a decline as well within the context, driven by the shortfall in global travel retail, but good depletion trends in the U.S., which is also one of our key markets for the future. Lastly, for the single malt whiskeys, we saw a very strong rebound in Q2 that drove to nearly flat sales. And this is thanks to a growth in almost all regions, but obviously global travel retail. If we exclude travel retail, actually, our Q2 sales would have grown 8%. So, of course, the impact of travel retail is massive. The marketing initiatives, quickly, as I said, a word overall for the group when speaking of Rémi Martin. But as you can see, again, getting stronger during the pandemic crisis. This, for us, means working first on asserting our cocktail legitimacy. We know that cocktails are growing worldwide and obviously key in the U.S. And with Cointreau, we have a fantastic tool to build our legitimacy. We've been also working on leveraging e-commerce. We created the first of its kind, a virtual cocktail studio, explaining that the various cocktails you see there, like the martinis made with the botanist, gin, the margarita made with Cointreau, and the black, sorry, the old fashioned made with Mange. And lastly, we also adapted to the crisis and to the change and the shift that we had to do to lockdowns. And just one example, which might sound anecdotal, but which reflects well what we did is Mange is very strong among the sailing community, sailing community. And we've been working hard on shifting from physical regattas to digital ones. And as such, Mount Gay joined the world sailing as the official e-sailing partner. And 13 nations have launched e-sailing national championships. And with mountain guest support, Barbados has become the 14th with further nations to be launched. So, again, a way to adapt to the context and to switch from physical to digital events during the lockdowns. Of course, we've been also preparing the future through innovation. You see here an innovation at Saint-Rémy which aims at modernizing the image of brandy and keeping on upgrading as well. But we also had a lot of newness on the whiskeys with notably Port Charlotte. innovation. But we did more than that. We invested for the first time ever in a campaign, proper campaign behind Classic Lady, which is the spearhead of future growth with a campaign that is named No Hidden Measures. Further to their recent B Corp certification, in fact, the goal of this campaign is to bring a new level of transparency to single malt scotch savoir-faire. It addresses, in fact, the need for more education and awareness around factors affecting flavor in single malt, namely quality and provenance of the distiller's ingredients. So a nice step forward, enhancing the group and the specificities of Classique Lady. So all in all, if you look at it, we had a reported decline of 11.1% and 13.4% inorganic. The currency effect was slightly positive, as you can see, 0.6 million, and the scope was marginally negative as we started investing behind the newly acquired Belle de Brier brand. In organic, the main negative driver on COP was the volume decline, which was down 19% as a reminder, while price mix was only slightly negative. As I said, thanks to the whiskeys, notably, and the growth of Cointreau in the U.S. This was partially offset by a cut in the NPs, a significant cut, which also reflects, in fact, the importance of on-trade for the liquors and spirits brands. So, obviously, the on-trade investment was naturally came down, which is why the cut in ENPs is, relatively speaking, more on liquors and spirits than it is on cognac. And on other costs, we were down 1.2 million euros, again, which helped to improve the COP or minimize the COP impact. So overall, the COP margin improved as a ratio by 0.6% from 2016, 0.6% from 2016. And looking at partner brands very quickly, a good H1, which was driven by a 26.5% growth in Q2. particularly thanks to the strong performance of key Belgium markets during the summer. As you know now, partner brands' business is much less than it used to be, and the Belgium impact for partner brands in general was huge. Thanks to cost-cutting measures and improved value per case, we also achieved a cop gain of 0.5 million in H1. I am now going to give the mic to Luca, who will take you through the financial results.

Thank you, Eric. Now let's move on on a detailed analysis of the financial statement and begin with the income statement. As already mentioned, organic sales declined 16.4% in the first half. On that basis, gross profits, gross margin, fell 19.1% in organic terms, implying, meaning... a 2.1 point to 110 basis point organic decrease in gross margin. This margin decline is the consequence of three different effects. First one, volume pressure. Second one, adverse product mix, in particular for the cognac division. And third one, delayed price increases. Recall that during March lockdown, we decided, and we communicate on that, to postpone our usual price increases from April 1 to October 2020 for ethical reasons. These price increases are now live. So our first half did not benefit from these price increases, while H1 last year enjoyed significant price increases taken in April 2019. In terms of sales and marketing expenses, they were down 17.6% in organic terms, in coherence with the evolution of sales. Within this total, AMP increased expenses were down around 20% organically, although with digital expenses, very important, we realize this point, up 135%, and our distribution expenses were down 15%, thanks to the cost-cutting measure put in place since the beginning of the pandemic in February and March. On the same line, our administrative expenses fell 14.3% on an organic basis, also thanks to the cost control measure implemented since the beginning of the pandemic. As a reminder, the cost control measure enabled us to reduce our global SG&A cost base, including an hiring freeze, a massive cut in travel and expenses, and in consultancy fees, and in general day-to-day cost-cutting efforts from all teams. On top of that, salary efforts were made from all employees from top to bottom. It is also important to recall that we achieved the result without the help of any government subsidies. Overall, We are well on track to achieve our 30 million COVID cost reduction target for the full year 2021, as already communicated and stated, of which one third, so around 10 million, will be permanent. All in all. All inclusive, the current operating profit declined by 22.5% on organic basis and 23.2% on reported basis, i.e. after taking into account a slightly negative currency effect and a very marginal nil scope perimeter impact. Now, let's move to a very important slide showing and analyzing the group's current operating margin, which declined by 1.7 percentage points to reach 24.7 in the first half. These breakdowns into an organic decline of 1.9 points and a positive currency effect of 0.02 points. So meaning that the decline in forex of 1 million was lower than the decline that we had in sales in terms of conversion rate. While we started consolidating Brier in April, there was no meaningful scope effect in H1 on operating profit on this line. So no scope impact on the H1. So it's very important to focus ourselves to the organic decline of the current operating margin that was basically driven by the decrease in gross margin, while the AMP and the distribution and structure cost ratios were pretty much flat at the end on a combined basis. So gross margin declined by 2.1 points as a result, as already said, of the volume decline, adverse product mix, and less pricing gains as already mentioned, compared to the previous year. AMP expenses ratio decreased by 0.6 points as ASP spend was down 20% when sales declined 16.4 organically over the period. We cut the number of unnecessary due to the situation on trade events and events associated expenses in the current context and in contrast digital and strategic above the line advertising expenses were up sharply as already mentioned. The ratio of distribution structure costs increased by a very limited 0.4 point as the negative leverage of declining sales was well absorbed by the full benefit of the cost control measure taken since last February to reduce our cost base. Now, let's take a look to the rest, the remaining part of the income statement. Other non-recurring operating items were non-meaningful at the end of the H1 for €0.2 million, while finance costs decreased meaningfully to €8 million in the first half, down from €14.4 million last year. I'll come back to this point later on, on a later slide. As expected, as guided, tax rate rose from 31.7% to 33.8% due to a deterioration of the geographical mix of our profit. By that, we mean that the weakness of the travel retail business and the Asia-Pacific zone in the first half, which both tend to have lower tax rate than the rest of the world, impacted the tax rate. For the full year 2021, we continue to guide to expect on a tax rate of 33% to 34%, meaning flat more or less compared to the previous year. Net profit from this continued operation was nil in H1, while we recorded last year a 6.3 million euro net profit gain linked to the disposal of the Czech and Slovakian distribution subsidiary last year. As a result, our net profit, bottom line, came in at 65 million euro, down 28.1% euro an year on a reported basis. But excluding the non-recurring items, net profit came in at 65.2 million euro, down only 23%. and the net margin, as already said, stands at a very resilient, important level of 15.1%. So the next slide is showing the non-recurring items, which were not meaningful in this half year. This only accounted for €0.2 million, which basically reflected business as usual, other operating and non-recurring expenses. So nothing very important there. Let's now analyze a very important chart, which is the cash flow generation and net debt variation. Despite the context and a lower EBITDA, our recurring free cash flow generation improved in H1 compared to last year. We generated €32.5 million free cash flow to be compared to €5 million free cash flow in the year-ago period. Yes, admittedly, it was driven by tighter grip on strategic investment, including both working capital and capital expenditure, as well, by force, some delayed project due to the COVID-19 impact. We still expect, which is very important to reaffirm now, CapEx capital expenditure to be around 50 to 55 million in the full year at this stage, In terms of strategic working capital, we have to remind you that H1 is not very representative of your trend, as ODV purchases are mainly done in H2. On that line, important point, we continue to expect a 70 to 8 million euro outflow in the fiscal year all over the year 2021. Financial expenses declined in terms of outflow in coherence with the lower level of net debt, the average level of net debt, and tax outflows also decreased as a result of lower profits posted last year. Other non-operational recurring cash flow improved substantially versus last year as they were only a negative 8.9 million euro to be compared to a sharp negative of 120.7 million euro last year. This was largely driven by the dividend payment this year. Firstly, because 80% of our shareholders opted for a dividend payment in share. Besides that, the cash portion, around 10 million euros, was paid in October, so impacting the H2 cash flows. Recall that Last year, 100% of dividends were paid in cash and in September. Beside that, last year, the group granted an additional and exceptional dividend of €1 in top to the ordinary classical dividend, €1.65. Proceed from asset acquisition, where a €9.5 million outflow, reflecting the Brier acquisition in the first half, For your information on debt acquisition, we consolidated as well a €0.6 million net debt along the global assets. So net-net total cash flow for the period was a €23.6 million inflow, leading to a lower net debt compared to March level at €427.3 million. This net debt was also down as well, 31.6 million to be compared to its level in September 2019. Despite the lower net debt level in absolute value, our net debt to EBITDA ratio, A ratio, increased to 2.04 compared to 139 last year, due to the fact that the lower EBITDA level was more important than this stability in terms of absolute value of the net debt. But having said that, 2x net debt to EBITDA ratio remains a very healthy ratio. One word on our net financial expenses, which were a global charge, an overall charge of €8 million in the first half, implying strong €6.4 million improvement compared to the previous year. Gross debt servicing costs improved marginally to €6.1 million compared to €6.3 million last year. along with our cost of net debt, which managed to reduce further to 0.96% in H1 to be compared to 1.15%. Net currency losses also improved to 0.6 million euro losses in the first half compared to a loss of 2.4 million euro last year. As you know, this is a very volatile non-cash item related to the hedging of groups non-euro debts and future non-effective flows. But the main driver of the financial charges improvement in H1 was the other financial expenses line, which amounted to 1.3 million euro this year to be compared to 5.7 million euro expenses last year. This 4.4 million euro reduction, positive impact on net result, reflects a partial change in contractual terms with our wine growers since the start of the financial years that gives this kind of benefit. And in the full year, we expect other financial expenses to land between 2 to 3 million in absolute value. Let's now talk about impact on currencies and currency hedges. As already mentioned, the group reported a slightly negative translation and transaction impact of €1 million in H1 in terms of operating profits. This mainly reflects a deterioration of the average euro-dollar translation rate over the period, which came out at 1.14%, per euro in H1 to be compared to 1.12 last year. This is the gray line on the spreadsheet. Recall this had a negative impact in absolute value of 7.4 million on group sales in the first half. Meanwhile, our average edge rate, the red line, remained broadly stable compared to the previous year at 1.16 US dollar to euro. Now, this edge rate has slightly deteriorated versus its level at the beginning of the year, which was 115. That's the reason why there was a slightly change in the guidance. So we thought it was important to update this guidance, as you can see in the next spreadsheet. And talk a little bit about our best estimation, because the environment is very volatile, also macroeconomics and not only on forex, which sometimes are very important. and very much of a consequence of the macroeconomics movement. Assuming an average euro-US dollar conversion rate, translation rate of 1.16 in the full year, i.e. implying a spot rate of 1.18 in the H2, and the euro-US dollar edge rate of 1.16 for the full year 2021, We now anticipate a 40 million, 4-0 headwind on sales and a 5 million, 5-0 headwind on operating profit on the full year level. Currency being very, very volatile, I repeat, and we remind you what is very important, which is the sensitivity. One cent increase today. theoretical increase in U.S. dollar compared to the Euro in terms of hypothesis is delivering 4 to 5 million Euro gain on sales and around 3 million Euro gain on operating profit and all things alike. At this stage, we covered 85% of our expected net U.S. dollar exposure. of which more than 50% 5-0 with option. So we are in a cautious position, but still flexible. Now, let's move on to an overview of the balance sheet, whose structure strengthened once again in the first half, with total assets and liabilities of 2.62 billion compared to 2.58 in September last year. On the asset side, this was mainly driven by global increase in inventory levels up 110 million euro to reach 1.38 billion euro. This is an historical figure for the group. This H1 overall in terms of crew was not one of the best mathematically speaking, but this indicator is clearly a bidding one. It's clearly a very strong one, as well as free cash flow. So this is an important thing to highlight. This is mostly the result of a significant increase in the purchase of the young ODV in H2 last year, combined with lower sale in the first half. Stocks accounted for 53% of total asset, up four points compared to the previous year. On the liability side, the increase was driven by the equity, up 83 million euro, as dividends were paid in the H2 this year, in October, as the option to choose between cash and share also a little bit lengthened the process, while they were fully paid in cash in H1, the previous one. Net gearing, so the group's net to debt equity, net debt to the equity ratio, decreased over the period from 33% to 29% thanks to a lower net debt compared to a higher equity. Key events during the half year. Three key events occurred during this half year. On April the 30th, Rémi Cointreau acquired Maison de Cognac J.R. Brié. On May 19, our Brookladdy distillery was certified B Corporation. These news were already shared and detailed in June during the full year earnings meetings. And on July 23, the general meeting approved... an ordinary dividend of one euro. Shareholders had the choice to choose between a payment in shares or a payment in cash. As already highlighted, 80% of our shareholders opted for a payment in shares, and the cash portion, as already mentioned, was paid in October. Lastly, a post-closing chart concerning the events, the post-closing events. Since the closing of the half-year on September the 30th, we announced the acquisition of majority stake in the Champagne house, J'ai de tellement, on October 16th. This deal includes the brands. inventory, production facilities, and property assets on its estate as well as vineyards in the Champagne region. We see a significant potential for this brand, for Telmon International Development, while adding a Champagne to our portfolio should also yield top-line synergies with our existing brand, in particular in the on-trade environment. Our ambition should be achieved while respecting the Telmon commitment in a certification process of sustainable and organic agriculture. Second post-closing event on November 12, French newspaper Le Point issued a ranking of the most responsible companies in France. Rémy Cointreau ranked first, number one, among the food and beverage sector and 26th overall among the 250 French companies. This ESG analysis was conducted by a third party, clearly, a German company, Statistat, and we are obviously very, very proud of this ranking that rewards years of commitment and already tangible results towards more responsible growth. Lastly, on November 24, Board of Directors took place, the group, during which a few evolutions were avoided. Caroline Bois, which was previously censored, was named a member of the Board of Directors and member of the Audit Finance Committee in replacement of Monsieur François Redoubreuil, who decided to step down. François Héréal-Dubreuil will, however, remain censor of the board. Caroline Bois is François Héréal-Dubreuil's daughter, and this change is part of the generational transition of the Héréal-Dubreuil family within the board of directors, as announced at the end of the shareholder meetings in July 2019. For your information, the audit finance committee is now composed by So three of the four members are therefore independent members. Finally, the Board of Censors is completed with the appointment of Jacques Héraille, who is also a board member of Andromed, the family controlling holding, Jacques Herraille is the former CFO of the AVAS Group. And the Board of Censors now includes François Herriard-Dugreuil, Elie Herriard-Dugreuil, and Jacques Herraille. Thank you so much. And now I will switch back my... Ah, you have the power. I have my... To Eric Vallat.