ZWACK UNICUM NYRT. Report
on the results of the Zwack Unicum Plc.
in the 2023-2024 business year
The Board of Directors of the Zwack Unicum Plc. has approved the Management's report about the results of the Company in the 2023-2024 business year.
The data have been audited.
1. Analysis of the Report
Total gross sales of the Company were HUF 36 938 million - a year-on-year increase of HUF 1574 million (4.5%). Net sales (sales revenues excluding excise tax and public health product tax [NETA]) were HUF 22 496 million, a year-on-year increase of 6.0% (HUF 1281 million).
Net domestic sales of products had an increase of HUF 1303 million (7.3%) over the previous business year. Net sales of own-produced goods in the domestic market increased by HUF 1111 million (8.6%) (HUF 14 048 million instead of HUF 12 937 million). Broken down in more detail, sales of premium products increased by 8.2% and sales of quality products increased by 9.7% over the previous business year. Within the premium category the sale of only the Unicum liqueur had above-average growth. Though in the last quarter the sale of Fütyülős also went up considerably, if we look at its performance during the entire business year, it continued weakening the statistics of that category. In the quality products segment, the value of the sale of all the brands that are sold in major volumes increased.
Net sales of traded products had a year-on-year increase of 3.9%. Broken down in more detail, the revenues of the Diageo portfolio increased by 3.1%, and the revenues of the other traded products went up by 9.8%. Among the "other traded products", the revenues of Evian and champagnes increased more than those of other drinks.
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
The decrease in the Company's domestic sales in terms of the volume is due to a marked country-wide decline in consumption caused by high inflation - which has had a tangible impact on the profitability of this Company. Although the value of sales rose by over 7%, the volume of products sold dropped by 1%. It was a drop of merely 1% instead of 2.5% mentioned in our earlier report because in the final quarter of the business year the volume of products sold went up by more than 9%. That increase in volume was mainly due to the fact that in this business year the entire Easter season occurred in March. And as for the business year as a whole, the drop in the sales volume continued mainly in the wholesale channel. The retail channel showed a minor year-on-year increase. That was due, to a considerable degree, to the fact that, as from the second half of 2023, the retail division fought an aggressive price war to win consumers back. Those efforts had a favourable effect on the turnover of many of the Company's brands.
According to the April 2023-March 2024 market research data for the retail turnover, the Hungarian country-wide taxed spirits market decreased by 3.6% in volume but it grew by 6.5% in value. In the same period, the Company's retail sales had a year-on-year increase of 0.7% in volume and a year-on-year increase of 5.5% in gross value.
The export of products fetched HUF 2196 million, a year-on-year decrease of 6.1% (HUF 141 million). Among our major export markets, our sales to Italy had a year-on-year growth of 4%, in the case of Romania, the Company almost reached the revenues of the last business year, but exports to Germany fell significantly (by 17%) and decreased to Slovakia (by 12%). Just as in the third quarter, the duty-free segment did better than in the corresponding period a year before, and considering the entire business year, grew by 11%. All in all, in our five major export destinations the Company's revenues were the same as in the previous business year. The revenues of the Company's flagship brand, the Unicum liqueur, were only slightly below of those of the previous business year. The decrease of the aggregated export revenues was the consequence mostly of the underperformance of products that were not in focus. The sale of Borco apricot ended in Germany during the business year, the volume of Kosher exported to Canada and the United States decreased considerably and, just as in the home market, the sale of Fütyülős significantly dropped in export markets.
The revenue from services was HUF 1204 million - a year-on-year increase of 11.0% (HUF 119 million). Within the revenue from services the biggest category that grew was revenues derived from marketing expenditure reimbursement paid by brand owners. The Zwack Unicum Heritage Visitors' Centre (called the House of Unicum) had a steep increase in revenue from ticket sales.
Material-type expenses increased by HUF 438 million (5.1%) while the net sales went up by 6.0%. That is why the gross margin ratio was higher by 0.3 percentage points than a year before (60.2% instead of 59.9%). The decrease in the per unit price of materials was due to a favourable change in the product mix (the sale of own-produced products with a higher margin ratio grew faster than that of the traded products).
The employee benefit expenditure rose by HUF 461 million (12.5%). At the beginning of the business year the Company gave an across-the-board pay hike averaging 15.4%. The Annual
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
General Meeting of 28 June 2023 resolved to pay a dividend of HUF 1 700 per share, which was by HUF 200 higher than a year before. Under the IFRS, the dividend payable after liquidation preference shares, and any change in related liabilities, have to be posted as a personnel type of cost. Consequently, the dividend that was higher than in the previous year increased the employee benefit expenditure by HUF 7 million and the change in related liabilities raised the employee benefit expenditure by HUF 100 million. The other personnel expenditure figure was increased by HUF 26 million by certain cost increases (for example, higher conference prices, training course fees, travel allowance, benefits) and the related tax expenditure. At the same time, the increase in the sum set aside for the long-service award was by HUF 39 million lower than in the previous business year. During the business year the Company did not grant any unscheduled payment to the staff. By contrast, during the previous business year - when expenditure on energy had jumped - the Company paid the staff an allowance for overheads in the value of HUF 52 million and, at the end of that business year, paid a bonus for committed and effective work in the value of HUF 26 million.
The cumulative figure of depreciation increased by HUF 29 million (4.8%). Broken down in more detail, the depreciation of property, plant and equipment increased by HUF 35 million - which was mainly justified by the installation of a new geothermal facility in Dunaharaszti. The immediate depreciation of pallets showed a year-on-year decrease.
The other operating expenses had a year-on-year increase of HUF 756 million (16.3%). Higher expenditure on marketing activities accounted for a considerable part of that increase (HUF 400 million). The Company spent a sizeable part of that sum in the Italian market, where a four-week media campaign (worth the equivalent of nearly HUF 200 million) promoted the sale of Unicum. The Extended Producer Responsibility (EPR) fee, which was introduced in Hungary on 1 July 2023, added HUF 422 million to this Company's expenses during this past business year. Furthermore, there was a considerable year-on-year increase - in the total value of HUF 62 million - in expenditure on corporate security (HUF 18 million), insurance (HUF 13 million), experts' fees (HUF 14 million) and recruitment-agency fee (HUF 17 million). However, during the business year, there was a HUF 48 million year-on-year decrease in exchange-rate loss. The Company managed its inventory efficiently: even though warehousing prices rose steeply, its expenditure on warehousing shrank by HUF 10 million. As the volume of products sold decreased, the Company's spending on transport dropped by HUF 12 million. The Company did not have to pay any late-delivery penalty as caused by some inventory shortage. In the preceding business year, the Company had to pay to its partners HUF 50 million in such penalty. The Company managed to save HUF 15 million in the rest of the operating expenses that are not specified above.
The other operating income increased by HUF 1 million (1.0%). Revenues from the resale of returnable packaging materials went up but the Company sold fewer motorcars from its fleet than during the previous business year.
The profit from operations was HUF 3 466 million - lower than that a year before by HUF 402 million (10.4%).
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
During the period under review the Company gained a net financial income of HUF 170 million. Our funds kept in fixed bank deposits yielded an interest income of HUF 213 million. In order to minimize the risks of exchange rate fluctuations, the Company kept on its bank account a major quantity of euros - which were mostly derived from futures contracts. As a consequence, when it came to fulfil its liabilities in the local currency (forints), in a transitional period the Company had to use an overdraft facility. That is why the Company had to pay HUF 43 million in interest.
Taxes levied on the Company's profits showed a year-on-year increase of HUF 18 million (2.5%). The corporation tax the Company had to pay was by HUF 38 million (11.4%) lower. The local business tax and the innovation contribution went up by HUF 49 million (13.1%). The deferred tax expenditure showed a year-on-year increase of HUF 7 million over the previous business year.
All in all, the Company's profit after taxation was HUF 2 906 million. Though it was lower than that a year before by HUF 542 million (15.7%), it exceeded the Company's plan target as defined in September 2023 by 25%.
Looking at other lines of the balance sheet, the inventories decreased by HUF 831 million (18.4%). During the financial year the Company regarded it a priority to optimize the inventory levels of the own-produced finished goods and their raw materials. Another favourable factor was that the lead time of obtaining the products of the Diageo portfolio markedly shortened. Consequently, the Company could considerably reduce the value of purchased finished goods.
Trade and other receivables increased by HUF 373 million (11.1%) - figures that roughly corresponded with the increase in sales revenue during the last quarter of the business year.
There were no further noteworthy changes in the lines of the balance sheet.
Zwack Unicum Plc. spent HUF 503 million on fixed assets during the business year. Investments related to maintaining the Company's fleet of motorcars accounted for a considerable part of that sum with the rest having been spent on projects that improve the efficiency of operation and promote the Company's manufacturing and marketing efforts.
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
2. Business Environment of the Company
Zwack Unicum Plc. is the biggest player in Hungary's spirit market. As the Hungarian domestic market accounts for nearly 90% of the Company's revenues from selling products, the domestic demand plays a decisive influence on the Company's results. The consumption of premium alcoholic drinks had grown in Hungary in the past few years, but that tendency drastically changed due to the pandemic in 2020. Following the post-pandemicbounce-back, consumption considerably decreased, which in turn was caused by a steep inflation and a related drop in real wages. Then disinflationary measures were swiftly introduced, and in their wake, the decline in consumption was reduced in the past half a year.
3. Objectives and Strategy of the Company
The Company's primary activity is producing and selling branded premium and quality alcoholic drinks. The principal aim of Zwack Unicum Plc. is to maintain its market leading role in spirits in Hungary. Furthermore, we aim to strengthen the export markets.
In Hungary the Company is the official distributor of several international brands like the Diageo portfolio. Thus, in addition to the self-manufactured premium brands of outstanding importance in the Hungarian market (Unicum, Fütyülős, Vilmos, St. Hubertus, Kalumba and Kalinka), Zwack Unicum Plc.'s portfolio is enriched by world brands such as Johnnie Walker, Baileys, Captain Morgan and Tanqueray. With such a portfolio our Company offers an impressively rich assortment of branded products for consumers.
Product innovation and successful product launch are crucial means of keeping and strengthening the market leader position. Regarding exports, we intend to increase their share in sales revenue of products from an actual 11% to 15% in the next three years. Our core export markets are Italy, Germany and Romania.
As from autumn 2019 the Company has been exclusively using green electricity. During the 2022-23 business year the Company completed heat pump and solar panel projects in Dunaharaszti. Recently we started to utilize geothermic energy, and further steps are planned towards promoting the circular economy. Further environment protection projects are underway and being evaluated and planned (Kecskemét and Soroksári plant). To see our Sustainability Report 2022/23, please visit our website.
(https://zwackunicum.hu/en/cegunk/fenntarthatosag-napjainkban/)
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
4. Main Resources and Risks of the Company's Activities
- Material Resources
- Production and Plant
The Company has three production plants. Unicum production and part of early maturation are done in the Unicum plant in Soroksári út, Budapest. The Dunaharaszti plant takes care of additional maturation and bottling of Unicum, and also the bottling of the majority of the other products produced by the Company. The fruit palinka and gin distillery operates in Kecskemét, and this is where the small series products are bottled.
The Company intends to maintain those three production plants in the long run. The output capacities of the plants concerned are appropriate for bulk production and bottling.
As for planned capital expenditure in forthcoming years, energy-efficiency investments are prioritized.
- Financial Position
The Company's financial position is stable and it always fulfils its financial obligations on time. Financial transactions were made by UniCredit, Erste and K&H Bank from among the largest commercial banks.
- Human Resources
Average statistical headcount of the Company in the business year was 255 (it was 258 during the last business year).
The Company's Chief Executive Officer, Mr Frank Odzuck, is about to retiring from his current post in summer 2025 after having spent more than twenty successful years in that position. The Company's responsible staff, the Board of Directors - acting with the participation of Mr Odzuck - have started making preparations for arranging his succession.
In the Hungarian spirits market the Zwack Unicum Plc. has the biggest human resources for sales and marketing. Indeed, the related competitive edge in distribution and innovation are among the Company's most important strengths.
- Risk factors
In Hungary, as well as in the rest of the world, the post-pandemic economic rebound has created an environment of high inflation. Other negative factors include a weak local currency, the war in Ukraine, and sanctions against Russia. Those factors have a strong impact on the purchase price of raw materials and, thereby, on the retail price of our products. Furthermore, reductions
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
in the purchasing power of households in Hungary have made the domestic demand for spirits precarious.
Important risk factor affecting our Company are the possible changes of the regulatory environment that may have a negative effect on consumption and consequent sales volume decrease.
Company activities are exposed to various financial risks: market risks, credit risks and liquidity risks. Seen the high volatility and uncertainty of the current financial market, the Company seeks keeping the possible negative implications affecting Company finances at the minimum.
Regarding its market risks, to reduce the foreign exchange risks arising from the export and import activities and from the Euro deposits, the Finance Department monitors, in line with the hedging policy, the foreign exchange liabilities, and keeps the relevant amounts of forex on its bank accounts. Occasionally the Company can enter into derivative transactions to reduce said risks. Having said that, if the exchange rate changes during the business year, that can have a major impact on the Company's comprehensive income and the Shareholders' equity.
The environment of high inflation has generated a considerable rise in the prices of raw materials and packaging materials, which for the Company involves market risks.
The Company has no significant credit risks, nor related to accounts receivables, due to the diversity of its customers. Also, a significant portion of the accounts receivable is insured by financial institution up to 95% of single liabilities. The Company applies no other credit rating methods since this credit guarantee method is deemed to be effective enough to manage credit risks.
Most of the Company's cash and cash equivalents and fixed deposits are denominated in forints. The counterparty risk is low since Zwack Unicum Plc. placed its funds with reliable financial institutions.
Liquidity management of the Company covers the necessary number of financial tools and also the necessary credit lines. The Management continuously monitors the necessary liquidity provisions based on the expected cash flow.
This report has been made according to the relevant accounting regulations and the financial statements made on the basis of our best knowledge. It gives a truthful and reliable account of the assets, liabilities, financial standing and profits of Zwack Unicum Plc. This report gives a reliable picture also of Zwack Unicum Plc.'s situation, development and performance.
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
Additional information:
- There was no change in the ownership structure of the Company.
- During the 2023-2024 business year there was no change in the organization of the Company.
- The Company does not possess shares of its own, just as before.
24 May 2024
On behalf of the Board of Directors of the
Zwack Unicum Plc.,
Sándor Zwack | Frank Odzuck |
Chairman | Chief Executive Officer |
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
Financial Statements
PK3. Statement of financial position (according to IFRS)
data in HUF million
Change to | ||||
31.03.2023 | 31.03.2024 | 31.03.2023 | % | |
ASSETS | ||||
Non-current assets | ||||
Property, plant and equipment | 3 946 | 3 755 | -191 | -4,8% |
Intangible assets | 75 | 77 | 2 | 2,7% |
Employee loans | 1 | 0 | -1 | -100,0% |
Deferred tax asset | 99 | 88 | -11 | -11,1% |
4 121 | 3 920 | -201 | -4,9% | |
Current assets | ||||
Inventories | 4 517 | 3 686 | -831 | -18,4% |
Trade and other receivables | 3 362 | 3 735 | 373 | 11,1% |
Cash and cash equivalents | 3 433 | 3 622 | 189 | 5,5% |
11 312 | 11 043 | -269 | -2,4% | |
TOTAL ASSETS | 15 433 | 14 963 | -470 | -3,0% |
Shareholders' equity | ||||
Share capital | 2 000 | 2 000 | 0 | 0,0% |
Share premium | 165 | 165 | 0 | 0,0% |
Retained earnings | 7 095 | 6 601 | -494 | -7,0% |
9 260 | 8 766 | -494 | -5,3% | |
Liabilities | ||||
Non-current liabilities | ||||
Other liabilities | 680 | 683 | 3 | 0,4% |
680 | 683 | 3 | 0,4% | |
Current liabilities | ||||
Trade and other liabilities | 5 480 | 5 507 | 27 | 0,5% |
Provisions | 13 | 7 | -6 | -46,2% |
5 493 | 5 514 | 21 | 0,4% | |
Total liabilities | 6 173 | 6 197 | 24 | 0,4% |
TOTAL EQUITY & | ||||
LIABILITIES | 15 433 | 14 963 | -470 | -3,0% |
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Data sheet heading (general)
Company name : | Zwack Unicum Plc. | Telephone | 456-5218 |
Company address: | 1095 Bp. Soroksári út 26 | Telefax | 216-4981 |
Business branch | Food | szucs@zwackunicum.hu | |
Period | 2023-24. business year | Investor Relations | Balázs Szűcs |
(01.04.2023-31.03.2024) |
PK4. Statement of comprehensive income (according to IFRS)
data in HUF million
2022-2023. | 2023-2024. | Variance | % | |
I-IV. | I-IV. quarters | |||
quarters | ||||
Gross Sales | 35 364 | 36 938 | 1 574 | 4,5% |
Excise Tax | 12 517 | 14 442 | 1 925 | 15,4% |
Public Health Product Tax (PHPT) | 1 632 | 0 | -1 632 | -100,0% |
Sales net of taxes | 21 215 | 22 496 | 1 281 | 6,0% |
Material-type expenses | 8 511 | 8 949 | 438 | 5,1% |
Gross Margin | 12 704 | 13 547 | 843 | 6,6% |
59,9% | 60,2% | 0,3% | ||
Employee benefits expense | 3 685 | 4 146 | 461 | 12,5% |
Depreciation and amortization | 600 | 629 | 29 | 4,8% |
Other operating expenses | 4 651 | 5 407 | 756 | 16,3% |
Operating expenses | 8 936 | 10 182 | 1 246 | 13,9% |
Other operating income | 100 | 101 | 1 | 1,0% |
Profit from operations | 3 868 | 3 466 | -402 | -10,4% |
Financial income | 293 | 213 | -80 | -27,3% |
Financial expenses | 1 | 43 | 42 | 4200,0% |
Net financial income/loss | 292 | 170 | -122 | -41,8% |
Profit before tax | 4 160 | 3 636 | -524 | -12,6% |
Income tax expense (corporate income, deferred, | ||||
local business tax and innovation contribution) | 712 | 730 | 18 | 2,5% |
Profit for the year | 3 448 | 2 906 | -542 | -15,7% |
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Zwack Unicum Nyrt. published this content on 24 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 May 2024 08:05:03 UTC.
