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 21 878 million, a year-on-year increase of 19.8%. Net sales (sales revenues excluding excise tax and public health product tax) were HUF 12 455 million – a year-on-year increase of 16.4% (HUF 1 750 million).
Excise tax increased steeper than gross sales due to changes in the mix of products sold.
Net domestic sales showed a year-on-year increase of 18.3% (HUF 1 754 million). (That is, HUF 11 323 million instead of HUF 9 568 million in the previous year.) In the third quarter gross sales increased by 19% (the increase was 23.9% in the first quarter and 12.3% in the second quarter). The amendment of the Act on Public Health Product Tax (NETA), effective as of January 2017, was the main cause of the spike in gross sales in the third quarter. As a broader range of alcoholic drinks will be affected by NETA in the future, our trading partners (especially the wholesalers) brought forward considerable purchases of Kalinka vodka. Disregarding that item, the increase in the October–December 2016 domestic gross sales was about 6%.
Within domestic sales, in the April–December 2016 period, the net sales of own-produced goods had a year-on-year increase of 19.1%. Domestic sales of premium products increased by 1.2% and the net sales of quality products rose by 71.6%. In the latter segment the sales of Kalinka accounted for the bulk of the increase due to a development described above, and the of St. Hubertus also rose by 8%. There was a year-on-year increase of 15.4% in the net sales from traded products. Broken down, sales of the Diageo portfolio increased up by 19.6%, while those of other products traded went up by 7.3%.
Market research figures for April–November 2016 indicate that, expressed in volume, the Hungarian market of spirits increased by 1.4%. Growth has been remarkable in the premium and quality segments (8.2% and 11.5%, respectively) however the volume of the non-branded segment decreased by 8.6%.
Export earnings were HUF 1 133 million, which is roughly the same as those one year before (-HUF 4 million; -0.3%). The export revenue of Unicum grew by 5.5% but the export of pálinka declined (by 45%) chiefly in the USA and Germany. Export to Italy increased by 6% and to Romania by 46%, and sales in the Duty Free segment rose by 33%.
The increase of 15.0% (HUF 674 million) in the material cost of goods sold was due mainly to changes in volume.
The gross margin of sales improved by 0.5 percentage point (climbed from 57.9% to 58.4%) mainly thanks to the increase in sales prices.
Employee benefits expense increased by HUF 121 million (6.5%). At the start of the business year the Company brought about an across-the-board average pay hike of 3.8%. The headcount also grew, and those two factors caused an increase in the employee benefits expense.
The other operating expenses increased by HUF 87 million (4.3%) due mainly to increase in marketing expenditure. Support for the Unicum and St. Hubertus brands increased, and the Company spent more also on trade marketing and research.
The other operating income decreased by HUF 20 million (-3.2%). The Company had a lower year-on-year exchange rate gain in the first three quarters of the year explains the decrease.
The balance of financial income and financial expense decreased by HUF 9 million (-55.9%). The decrease was due to the lower deposit interest rates. In the April–December period the average level of cash in hand and in banks showed a 21% year-on-year increase.
The Company’s calculated tax (corporate tax, local business tax and deferred tax) increased by HUF 314 million (52.3%). The considerable increase in deferred tax is the main factor why the calculated tax rose steeper than the increase in the Company’s profit before taxation (32.7%). That is because in the present Report the deferred tax is calculated using the new corporate tax rate of 9% (as compared to the earlier method when 10% or 19% were the tax rates used, depending on the size of the profit). As the Company’s balance of deferred tax is asset type, the lower tax rate will in the future cause a lower deferred tax asset. As a consequence of the lowering of the tax rate, the Company has a one-off increase in the tax liabilities (to the tune of HUF 99 million).
The Company’s profit after taxation according to the International Financial Reporting Standards (IFRS) stands at HUF 2 538 million, a year‑on‑year increase of 26.8% (previous: HUF 2 001 million).
As our track record shows that in the last quarter of the business year the Company is in deficit, the Management’s profit forecast for the entire business year is that the profit after taxation will reach HUF 2 000 million.
Trade and other liabilities showed a year-on-year increase of 25% (HUF 1 238 million). Half of that is due to our higher excise tax and VAT liability, which in turn is due to the increase in gross sales. The other half is because the Company’s debts (within payment terms) to suppliers are higher than before because we purchased higher volumes.
In the first three quarters of the business year the Zwack Unicum Plc. spent HUF 425 million on fixed assets. Nearly half of that expenditure was of a supplemental type, and about HUF 100 million were spent on upgrading infrastructure.
The Company has 228 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 216). Growth in headcount is due to mainly two factors:
– formerly outsourced activities are now executed by our own, newly employed workforce, and
– the marketing department has increased in size.
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 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.
2 February 2017
On behalf of the Board of Directors of Zwack Unicum Részvénytársaság: Sándor Zwack, Chairman and Frank Odzuck, General Manager
Zwack Unicum Plc’s Report is published and accessible at:
