The data are not audited (either those prepared according to the IFRS standards or those prepared according to the Hungarian accounting rules).
Total gross sales of the Company amounted to HUF 5.303 million, a year-on-year increase of 22.0%. Net sales (sales revenues excluding excise tax and public health product tax) were HUF 3.160 million, a year-on-year increase of 23.9% (HUF 611 million).
Net domestic sales showed a year-on-year increase of 23.9% (HUF 540 million). (That is, HUF 2.804 million instead of HUF 2.263 million in the previous year.)
The first quarter’s spike in sales was due to several factors. The public health product tax was introduced in January 2015, and our sales were lower than usual in April–June 2015 because the majority of our trading partners had brought forward their purchases to December 2014. The domestic consumption of spirits has been tangibly increasing. Third, the UEFA Euro 2016 men’s football championship had a favourable effect on the consumption of spirits, especially in the on trade channel. These positive factors resulted in a nearly 2% market share increase of Zwack portfolio on the total Hungarian spirit market.
Within domestic sales, the net sales of own-produced goods had a year-on-year increase of 22.3%. Domestic sales of premium products increased by 11.4% while the net sales of quality products rose by 60.0%.
There was a year-on-year increase of 31.0% in the net earnings from traded products. Broken down, sales of the Diageo portfolio shot up by 36.1%, while those of other products traded went up by 23.7%.
Market research figures for April–May 2016 indicate that, expressed in volume, the Hungarian market of spirits increased by 3.3%. The growth is mostly due to increase in the segment of quality products (15.8%). The premium segment – which is also very important for Zwack – increased by 12.4%. The non-branded segment decreased by 9.4%.
Export earnings were HUF 357 million, which is a year-on-year increase of 24.5% (HUF 70 million). There was a double-digit growth in each of our key markets (Italy, Germany, Romania, and the duty-free segment).
The increase of HUF 26.8% (HUF 270 million) in material cost of goods sold was due mainly to changes in volume.
The gross margin of sales decreased by 0.9 percentage points (from 60.6% to 59.77%) owing mainly to changes in the pattern of sales (the sale of traded products rose steeper than that of the own-produced goods).
Employee benefits expense decreased by HUF 3 million (‑0.5%). At the start of the business year the Company brought about an across-the-board average pay hike of 3.8%. The 28 June 2016 Annual General Meeting of the Company decided to pay dividend at HUF 850 per share. According to IFRS, dividends paid after liquidation preference shares is a personnel type of cost; consequently, the lower dividend brought down payment to personnel by HUF 12 million. Result of those two items was the main cause of the year‑on‑year decrease in payment to personnel.
The other operating expenses increased by HUF 89 million (17.3%) due mainly to increase in marketing expenditure. As compared to the corresponding period of the previous business year, marketing expenditure went up mainly on Unicum and Fütyülős brands.
The other operating income decreased by HUF 28 million (-16.6%). The decrease was due to the lower cost reimbursements because the brand owners of the distributed products decreased their marketing expenditures compared to the same period of last year.
The net financial income decreased by HUF 7 million (-66.5%). In July 2015 the Company paid HUF 2.4 billion in dividend, which exceeded the profit after taxation by HUF 700 million. Thus in the first quarter of the previous business year cash in hand and in banks was considerably bigger than in the first quarter of this business year. Besides, the current bank deposit interest rate is lower than that a year ago.
The Company’s profit after taxation according to the International Financial Reporting Standards (IFRS) stood at HUF 532 million, a year‑on‑year increase of 49.7% (previous: HUF 355 million).
The dividend will be paid in July, which means that in the Balance Sheet dated June 30 the dividend to be paid is referred to as a liability reported under Trade and other liabilities. Compared to the last year figure the decrease of HUF 711 million in that line of the Balance Sheet is because the dividend payable is smaller than that was paid in 2015.
In the cash flow statement the liability to pay the dividend increases the figure in the Trade creditors and other liabilities line and decreases the figure that is in the Other changes line.
In the first quarter the Zwack Unicum Plc. spent HUF 101 million on fixed assets. Those investments were of a supplemental type and took place as planned.
The Company has 230 employees (at the end of the 2015/2016 business year it had 218, and in the corresponding period of the previous business year it had 220). Growth in headcount is due to mainly two factors:
– formerly outsourced activities now executed by our own newly employed workforce
– the marketing department has increased in size.
This Interim Management Report for the business year has been made according to the relevant accounting regulations and the financial statements made on the basis of our best knowledge, and they are in accordance with both the Hungarian and the international standards. It gives a truthful and reliable account of the assets, liabilities, financial standing and profits of Zwack Unicum Plc. This business report gives a reliable picture about the Company’s situation, development and performance and it includes the major risks and factors of uncertainties. To make this report comparable with earlier ones, it carries figures in compliance with the International Financial Reporting Standards.
Additional information:
– There was no change in the ownership structure of the Company.
– During the first quarter of the 2016–2017 business year there was no change in the organization of the Company.
– The Company does not possess shares of its own, just as before.
8 August 2016
On behalf of the Board of Directors of the Zwack Unicum Plc., Sándor Zwack Chairman and Frank Odzuck, General Manager
