The data are not audited (either those prepared according to the IFRS standards or those according to the Hungarian accounting rules).
The Company gross revenues amounted to 9,249 M HUFs, 2.8% lower than in the previous year. Net sales were 5,597 M HUFs, which is basically the same as the base period revenues (-13 M HUFs; -0.2%).
Net domestic sales were up by 0.2% (a year-on-year increase from HUF 4,953 million to HUF 4,965 million). Within domestic sales, the turnover of own-produced goods increased by 0.7%. Domestic sales of premium products increased by 3.6%; the net sales of quality products increased by 0.7%. The sales of the non-branded portfolio decreased by HUF 81 million ( 96.9%). The Company terminated producing non-branded products at the end of last year and discontinued its sale in June 2014. This termination caused additionally a significant drop in excise tax.
The net earnings from traded products decreased by 1.5%.
Market research data in April-July 2014 indicate a 4% increase on the premium alcoholic beverages market in value, while that of the quality products dropped by 1.3%. In retail, sales of premium products increased significantly, by 14.3%. That was mainly because this year Easter fell on the second half of April while in 2013 it fell on March. In gastronomy, revenues from premium products dropped by 0.7 %.
Export revenues amounted to 632 M HUFs, which is 3.8% lower than last year’s data. The main reason is that this year delivery of Christmas promotion products will start in October, while last year it started already in September.
The material costs and material-type expenditures decreased by HUF 77 million (3.1%), which was mainly due to the termination of the production of non-branded products. As the net sales levelled off and the material costs declined, the gross margin of sales went up by 1.3 percentage points. The Company managed to improve the gross margin levels on own produced goods, while in case of import – due to the weakening of HUF – a decrease was registered. The average gross margin rose also because the weight of the own-produced premium products – which have the highest profitability ratio – increased.
Employee benefits expense increased by 120 M HUFs (10.1%). The Annual General Meeting of the Company that took place on 26 June, 2014, decided on the payment of a dividend of 2500 HUF per share (last year dividend was 775 HUF). Significant part of this unusual high dividend was founded by the cumulative retained earnings of the Company. According to IFRS, dividends paid after liquidation preference shares is a personnel type of cost, therefore the increase in the dividend increased the amount of personnel type of costs by 60 M HUFs. Also in July the Company paid special bonuses to its personnel. Having obtained the uniform support of the majority shareholders, the Management of the Company decided to reward the dedicated and successful work of the personnel by distributing bonuses to all employees. This resulted in an increase of 70 M HUFs in the personnel type of costs. Without these items, employee benefits expense are slightly lower.
That the other operating expenses decreased by HUF 63 million (5.2%) is due in the first place to the fact that in the first half of last year the Company sponsored various sports and cultural organizations by paying them by HUF 90 million more than in the first half of this year. Such sponsorship entitled the Company to a tax allowance and that explains why the Company had to pay a lower tax last year and why this year the tax obligation has risen considerably.
Other operating income increased by 79 M HUFs (38.9%). Of this, 66 M HUFs are due to the higher cost reimbursements because the brand owners of the distributed products increased their marketing expenditures compared to the base. The remaining HUF 13 million was exchange rate gain posted during the first half of this year. (In the first half of last year there was a HUF 16 million exchange rate loss, and that increased the other operating expenses that time.)
The net financial income decreased by HUF 58 million (-59.1%). Though on average the net funds of the Company showed a year-on-year increase of 10% in the first four months of the business year, the deposit interest rates were halved as a consequence of the decrease in the base interest rate. Payment of dividend in late July exceeded that of the previous year by HUF 3.5 billion so from then on the Company has had a considerably smaller disposable fund than a year before – and as a result, financial profits dropped at a larger scale.
The Company’s profit after taxation according to the International Financial Reporting Standards (IFRS) stood at HUF 587 million, a year-on-year decrease of 11.8% (previous: HUF 665 million).
Within current assets, stock value increased by 133 M HUFs (6.1%) compared to the closing value of the base. As imported products and euro-denominated domestic purchases account for a considerable part of the inventories, a significant part of the increase was due to the weakening of the forint.
The 3,586 M HUF (49.7%) drop in the profit reserves is the result of the higher dividend payment than the annual profit.
In the first half of this business year the Zwack Unicum Plc. spent HUF 232 million on fixed assets, and the investments were of a supplementary character and complied with the plan. The Company made a 35 M HUF capital investment into building a warehouse suitable to store marketing materials in the Dunaharaszti factory in an area unused due to terminating the production of non-branded products. That investment project is expected to reduce the Company’s expenditure on storage by HUF 20 million yearly.
The Company has 227 employees (at the end of the 2013/2014 business year it had 234 and in the corresponding period of last year it had 236.).
Despite efficiency-boosting measures that have been underway and taking into account the above-mentioned, unplanned one-off expenditures (as for instance the bonuses paid) and that the euro/forint exchange rate is way behind the plan (planned 300 HUF/Euro; estimated 308 HUF/Euro; expected exchange rate loss: 70 million HUF), the Management presently predicts a profit about HUF 200 million less than the profit target that has been communicated to the public.
This Quick Report for the first half of 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 half of the 2014–2015 business year there was no change in the organization of the Company.
– The Company does not possess shares of its own, just as before.
4 November 2014
On behalf of the Board of Directors of Zwack Unicum Részvénytársaság: Sándor Zwack, Chairman and Frank Odzuck, General Manager
