Brown-Forman Corporation (NYSE: BFA) (NYSE: BFB) announced today that it will establish a new head office for its European operations in Amsterdam, The Netherlands, effective January 1, 2014. Brown-Forman’s corporate headquarters will remain in Louisville, KY.
The opening of the European head office follows significant recent activity in the region, including the consolidation of the company’s Western Europe and Greater Europe organizations into a single pan-European operation on January 1, 2013. Brown-Forman also created a fully integrated German company in 2010, formed its own distribution company in Turkey in 2012,and will establish a new distribution company in France in January 2014. It also owns and operates distribution companies in Poland and the Czech Republic. In total, Europe accounted for 30% of Brown-Forman’s total net sales in fiscal 2013.
“We’ve spent a significant amount of time evaluating how to best structure and where to locate management oversight of this important region so that we can work more effectively and efficiently in driving results that will help Brown-Forman achieve its strategic B-F 150 goals,” said Mark McCallum, executive vice president of Brown-Forman, who is responsible for the company’s business in Europe, Africa, India, Asia Pacific, and Travel Retail. “We believe locating our European leadership team and key functional leaders together in Amsterdam will help this important region sustain its healthy growth rates and contribute more to Brown-Forman’s future prosperity.”
Brown-Forman will also relocate its Finlandia Global Brand Team to Amsterdam from Louisville, KY. “The growth of our vodka portfolio – and Finlandia in particular – is a vital part of our B-F 150 strategy,” said Lawson Whiting, senior vice president and chief brands officer for Brown-Forman. “With more than 80% of Finlandia’s business sourced in Europe, it makes sense to put our global Finlandia leaders closer to their largest consumer base and to where the vodka is produced in Finland.”
By January, Thomas Hinrichs, senior vice president and managing director of Brown-Forman’s Europe operations, and other key members of the company’s European leadership team will move to Amsterdam from Hamburg, London, Paris, Prague, and Louisville. In addition, Carmen d’Ascendis, senior vice president and managing director of Brown-Forman’s vodka business, and other key leaders of the Finlandia Global Brand Team will relocate to Amsterdam from Louisville, KY. Ultimately, the company expects to have approximately 40 employees based in Amsterdam, although it will probably take a few years before that number is achieved.
McCallum said Brown-Forman chose Amsterdam as the head office for the company’s recently consolidated European team because it is centrally located with easy access to the rest of Europe and other international markets. The Netherlands also provides an excellent business climate and a well-educated and multi-lingual workforce.
For more than 140 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine quality beverage alcohol brands, including Jack Daniel’s Tennessee Whiskey, Southern Comfort, Finlandia, Jack Daniel’s & Cola, Canadian Mist, Korbel, Gentleman Jack, el Jimador, Herradura, Sonoma-Cutrer, Chambord, New Mix, Tuaca, and Woodford Reserve. Brown-Forman’s brands are supported by nearly 4,000 employees and sold in approximately 160 countries worldwide. For more information about the company, please visit http://www.brown-forman.com/.
This press release contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “plan,” “potential,” “project,” “pursue,” “see,” “will,” “will continue,” and similar words identify forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. These risks and other factors include, but are not limited to:
- Unfavorable global or regional economic conditions, and related low consumer confidence, high unemployment, weak credit or capital markets, sovereign debt defaults, sequestrations, austerity measures, higher interest rates, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations
- Risks associated with being a U.S.-based company with global operations, including political or civil unrest; local labor policies and conditions; protectionist trade policies; compliance with local trade practices and other regulations, including anti-corruption laws; terrorism; and health pandemics
- Fluctuations in foreign currency exchange rates
- Changes in laws, regulations or policies - especially those that affect the production, importation, marketing, sale or consumption of our beverage alcohol products
- Tax rate changes (including excise, sales, VAT, tariffs, duties, corporate, individual income, dividends, capital gains) or changes in related reserves, changes in tax rules (e.g., LIFO, foreign income deferral, U.S. manufacturing and other deductions) or accounting standards, and the unpredictability and suddenness with which they can occur
- Dependence upon the continued growth of the Jack Daniel’s family of brands
- Changes in consumer preferences, consumption or purchase patterns - particularly away from brown spirits, our premium products, or spirits generally, and our ability to anticipate and react to them; decline in the social acceptability of beverage alcohol products in significant markets; bar, restaurant, travel or other on-premise declines
- Production facility, aging warehouse or supply chain disruption; imprecision in supply/demand forecasting
- Higher costs, lower quality or unavailability of energy, input materials or finished goods
- Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, for result in implementation-related or higher fixed costs
- Inventory fluctuations in our products by distributors, wholesalers, or retailers
- Competitors’ consolidation or other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing or free goods), marketing, category expansion, product introductions, entry or expansion in our geographic markets or distribution networks
- Risks associated with acquisitions, dispositions, business partnerships or investments - such as acquisition integration, or termination difficulties or costs, or impairment in recorded value
- Insufficient protection of our intellectual property rights
- Product counterfeiting, tampering, or recall, or product quality issues
- Significant legal disputes and proceedings; government investigations (particularly of industry or company business, trade or marketing practices)
- Failure or breach of key information technology systems
- Negative publicity related to our company, brands, marketing, personnel, operations, business performance or prospects
- Business disruption, decline or costs related to organizational changes, reductions in workforce or other cost-cutting measures, or our failure to attract or retain key executive or employee talent
For further information on these and other risks, please refer to the “Risk Factors” section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.
Use of Non-GAAP Financial Information This press release includes measures not derived in accordance with generally accepted accounting principles (“GAAP”), including constant currency net sales, underlying net sales and underlying operating income. These measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP, and also may be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the most closely comparable GAAP measures, and reasons for the company’s use of these measures, are presented on Schedule A attached hereto.
