The data are not audited (neither those prepared according to the IFRS standards nor those according to the Hungarian accounting rules).
The Company gross revenues amounted to HUF 18,259 million, which is 6.1% lower than in the previous year. Net sales (sales revenues excluding excise and public health product tax) were HUF 10,705 million, a year-on-year decrease of 7.6% (HUF -875 million).
Net domestic sales were down from the previous year by 7.6% (HUF -784 million). That is a year-on-year decrease from HUF 10,352 million to HUF 9,568 million.
Net domestic sales in the third quarter showed a decrease of 13% (HUF ‑700 million) comparing to the previous business year’s October to December. The sales figure in the third quarter of last year spiked because the majority of our trading partners significantly increased their purchases in December 2014 due to the fact that the public health product tax (NETA) was levied on a wide range of spirits as of January 1st 2015. There was no similar event in late 2015 so our customers only made business-as-usual purchases. That explains the year-on-year decrease. The final quarter of the current business year (January–March 2016) promises to be better than the same period last year.
Within domestic sales the net sales figure of own-produced goods for the first three quarters showed a year-on-year decrease of 7.7%. Domestic sales of premium products decreased by 3%, and the net sales of quality products went down by 20.2%.
In the net earnings from traded products there was a year-on-year decrease of 6.7%. In detail, sales of the Diageo portfolio dropped by 11.5%, while those of other products traded went up by 4.0%.
Market research April–November 2015 indicates that, expressed in volume, the Hungarian market of spirits decreased by 9.2%. Overall, the weak performance (-18.8%) of the non-branded segment caused the decrease. The two market segments that really matter for Zwack: the premium and the quality segments more or less levelled off (-0.6% and +0.7%, respectively). Consequently, it is fair to say that the public health product tax – which was introduced on 1 January 2015 and covers a broad range of spirits – has had a negative effect.
Export earnings were HUF 1,137 million, which is a year-on-year decrease of 7.4% (HUF ‑91 million). The brunt of the decrease was related to our trade relations with China: last year had seen a major one-off sales deal with China, which has not been repeated this year. Among the focus markets Italy did very well but there was a year-on-year decrease in our sales to Slovakia and Romania.
The decrease of 11.3% (HUF -571 million) in material costs and costs of material type was due mainly to changes in volume.
The gross margin of sales improved by 1.7 percentage points (from 56.2% to 57.9%) owing mainly to higher sales prices.
Employee benefits expense decreased by HUF 131 million (-6.6%). The Annual General Meeting of the Company, held on 25 June 2015, decided to pay dividend at HUF 1200 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 45 million. In July 2014 the Company paid an unscheduled bonus to its employees, which increased payment to personnel by about HUF 70 million that time. Those two factors explain said year-on-year decrease in payment to personnel.
The other operating expenses increased by HUF 250 million (14.2%) due to increase in marketing expenditure. As compared to the corresponding period of the previous year, marketing expenditure went up on Unicum (in Hungary and in Italy) and on St. Hubertus and the brands of Diageo.
The other operating income increased by HUF 134 million (27.2%). Of the increase, HUF 103 million was due to the higher cost reimbursements because the brand owners of the distributed products increased their marketing expenditures compared to the last year. The remaining HUF 31 million was due to increase in the exchange rate gain.
The net financial income decreased by HUF 31 million (66.6%). Presently the deposit interest rate is considerably lower than a year before. Besides, in July 2014 the Company paid HUF 5 billion in dividend. Thus in the first quarter of the previous business year Cash and cash equivalents was considerably bigger than in the first quarter of this year.
The Company’s profit after taxation according to the International Financial Reporting Standards (IFRS) stood at HUF 2,001 million, a year-on-year decrease of 11.6% (previous: HUF 2,263 million).
There are considerable year-on-year changes in the following lines: Inventories, Trade and other receivables, and Trade and other liabilities. Each of those changes is due to the unusually high sales figure at the end of 2014 (see above). The level of inventories was rather low last year but now we closed this year on a “normal” stock level. As the sales decreased in October-December period, the Trade and other receivables figures went down. The lower turnover caused smaller tax liability, so the figure at the Trade and other liabilities was also smaller.
The HUF 948 million (17.9%) drop in the profit reserves mainly is the result of the higher dividend payment than the last year’s profit.
In the first three quarters of the business year the Zwack Unicum Plc. spent HUF 505 on fixed assets. Spending in this category was higher than in previous years because the Company has started two major technological projects. The Company spent HUF 177 million on the purchase of a new bottling machine and HUF 37 million was spent for the installation a new extracting technology. Both investment projects support the technological upgrade and the effectiveness of production.
The Company has 216 employees (at the end of the 2014/2015 business year it had 218, and at the and of the corresponding period of last year it had 231 persons).
This Interim Management Report for the first three quarters of 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 three quarters of the 2015–2016 business year there was no change in the organization of the Company.
– The Company does not possess shares of its own, just as before.
3 February 2016
On behalf of the Board of Directors of Zwack Unicum Részvénytársaság: Sándor Zwack, Chairman and Frank Odzuck, Chief Executive Officer.
Zwack Unicum Plc’s Report is published and accessible at:
