Buckwilde 2019 Annual Report

A Drink Precedes a Story

BUCKWILDE 2019 CORPORATE ANNUAL REPORT

Contents I. From the Desk of the CEO II. Year in Review III. To Our Shareholders IV. Statistics V. Financials

From the desk of the CEO

A

s the old Irish proverb goes, “A drink precedes a story.” As this year comes to a close, I’d like to briefly reflect back on the start of our company, our story and our drink. Buckwilde was born out of a desire for an affordable whiskey and built up by a group of people willing to bring it to life.

Buckwilde was always about friends fulfilling a passion.

Drinking Irish whiskey was a habit more than an activity in our university years, so naturally we wanted to pursue it post-graduation. After two years, we willed this drink into existence, cultivated a brand, bought property, invested in stocks, and build a company from the ground up.

I’m so incredibly proud of my core team for going above and beyond in all ways this year in particular. I’m also incredibly proud of all of our new employees for jumping on this exciting ride. We’re doing well, and we’re going to keep doing well.

All of this was preceded by a drink.

Slainte!

Aoife Maguire Chief Executive Officer

Year in Review 1

.In the first quarter of 2019, we achieved an increase in sales of 4.8 percent to 4,008 million euros. After adjusting for foreign exchange, sales improved by 3.9 percent.

Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales rose by 4.7 percent. This once again represents a solid rate of increase compared to the prior-year quarter.

Sales of the Irish Whiskey business in the first quarter remained constant compared to the prior-year quarter. Among the whiskey products, Buckwilde Cinnamon in particular performed very well.

Further progress in optimizing our cost

structures additionally contributed to the substantial increase in return on sales. The difference between operating profit and adjusted operating profit is attributable to restructuring charges. These relate to measures aligned to further efficiency enhancement, particularly in production. Return on capital employed (ROCE) underwent a very strong increase to 25.7 percent.

2

In the second quarter of 2019, we achieved an increase in sales of 4.8 percent to 4,008 million euros. After adjusting for foreign exchange, sales improved by 3.9 percent.

Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales rose by 4.7

percent. This once again represents a solid rate of increase compared to the prior-year quarter.

3

In the third quarter of 2019, we achieved an increase in sales of 4.8 percent to 4,008 million euros. After adjusting for foreign exchange, sales improved by 3.9 percent.

Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales rose by 4.7 percent. This once again represents a solid rate of increase compared to the prior-year quarter.

Sales of the Irish Whiskey business in the first quarter remained constant compared to the prior-year quarter.

This solid performance was supported primarily by our emerging markets. After the political unrest in the previous year, the Africa/Middle East region recovered well, contributing to organic growth with a double-digit increase.

Sales of the Irish Whiskey business in the first

quarter remained constant compared to the prior-year quarter.

4

In the fourth quarter of 2019, we achieved an increase in sales of 4.8 percent to 4,008 million euros. After adjusting for foreign exchange, sales improved by 3.9 percent.

Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales rose by 4.7 percent. This once again represents a solid rate of increase compared to the prior-year quarter.

In addition to continuing our innovation offensive in order to expand our global market position, we will remain firmly focused on implementing measures to improve our cost structure and increase our efficiency. We expect adjusted return on sales to increase compared to prior year (2018 figure: 14.2 percent).

Further progress in optimizing our cost structures additionally contributed to the substantial increase in return on sales.

Our office in Dundalk Our office is located on the eighth floor of our Dundalk distillery. Here we host e-board meetings, reply to business correspondance, brainstorm and create advertisements and marketing strategies, and have some drinks too.

To Our Shareholders, I am writing this letter to you with our annual theme in mind: “A Drink Precedes a Story” is an Irish proverb that, on the surface, implies drunken shenanigans leading to the revelation of secrets sitting heavy on one’s heart and mind.

For 2019, “A Drink Precedes a Story” is our throwback to our founding story. In the beginning, there was only the desire for quality alcohol. Everything we have now started with

that singular goal. Our entire company, our entire story, was built around one drink.

I’m proud to report that a couple of years after our surprisingly successful start, we have only been growing and performing better.

In 2019 we have grown our team by 15%, expanded our exports to 3 new continents, and have begun production on a new flavor.

Our quarters this year saw steady growth throughout in product sales, both alcoholic and not. We’ve pulled in a larger net profit than ever before, by over 8 million EU. In our previous letter to shareholders, we discussed our focus on driving returns in a challenging macroeconomic environment. At the same time, we emphasized the need to protect our ability to provide significant upside to our shareholders as the economic cycle turns.

We intend to further expand our worldwide market positions again in 2020. We are confident to generate organic sales growth in the low singledigit percentage range. We expect the rate of increase in raw material prices to decelerate compared to the previous year. Following our substantial price increases in 2019, we plan to implement moderate price increases for 2020 in order to compensate for rising raw material costs and to increase our gross margin. We have been

judicious managers of capital. We have maintained our culture of client service and partnership. We remain the employer of choice in our industry. Taken together, we are confident that we have positioned the firm to provide operating leverage for our shareholders as the economy and opportunity set improves.

I’m amazed by the hard work put forth by all members of our team and the amazing support system we have here at Buckwilde.

Our first year was amazingly successful for just a few Millennials trying to make some delicious whiskey. Our subsequent two years were even better. Thank you for making this all possible.

Looking ahead at 2020, we’re going to work on company expansion, turning over a higher net profit while reducing costs, and growing our brand as a reliable name in the competitive world of Irish whiskeys.

Voted

#1 New Whiskey by

Irish Whiskey Magazine

84

Employees

32.4

Total revenue in EU millions

71

Countries Market by Geographic Zone Western Europe Eastern Europe North America South America Asia/Pacific

Stock Performance WRD NASDAQ S & P 500

300 200

100

Q1

Q2

Product Statistics

in thousands

Buckwilde Original Buckwilde Cinnamon Buckwilde Black Buck Buckwilde Shot Glass Buckwilde T-Shirts

Q3

Q4

Q1 Q2 Q3 Q4 302 180 277 89 104

444 205 326 94 195

468 263 380 115 210

501 312 400 153 230

W BUCKWILDE IRISH WHISKEY