The data are audited (both those prepared according to the IFRS standards and those prepared according to the Hungarian accounting rules).
Total gross sales of the Company amounted to HUF 24 792 million, a year-on-year increase of 17.3%. Net sales (sales revenues excluding excise tax and public health product tax) were HUF 14 281 million – a year-on-year increase of 14.6% (HUF 1 823 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 16.5% (HUF 1 822 million). (That is, HUF 12 854 million instead of HUF 11 033 million in the previous year.) In the fourth quarter gross sales increased by 4.6% – the lowest growth during the business year (in earlier quarters the increase of net domestic sales was 23.9%, 12.3% and 19%, respectively). That increase was substantional nonetheless because in the previous business year the revenues from the Easter season fell on the fourth quarter while in this year a part of the sales occurred in April. Furthermore, the spike in the sale of Kalinka in late 2016 – which was mentioned in the previous interim management report – had a negative effect on the January–March 2017 sales. (As since January 2017 a broader range of alcoholic drinks has been affected by the Public Health Product Tax [NETA], our trading partners brought up the purchase of considerable amounts of Kalinka vodka.)
On the domestic market, the net sales of own-produced goods, calculated for the entire business year, had a year-on-year increase of 16.2%. Domestic sales of premium products increased by 1.1% and the net sales of quality products rose by 57.3%. In the latter segment the sales of Kalinka accounted for the bulk of the increase due to the events described above, and the sales of St. Hubertus also rose by 10%. In the net earnings from traded products there was a year-on-year increase of 17.9% and, broken down, sales of the Diageo portfolio increased by 24.5%, while those of other products traded went up by 6.0%.
Market research for the entire business year indicate that the Hungarian market of spirits decreased by 0.8% in volume. A slight growth has occurred in the premium segment (+2.2%), there was considerable increase in quality segment (+8.7%), however the volume of the non-branded segment substantially decreased (by 8.1%).
Export earnings were HUF 1 427 million, which is roughly the same as those one year before (+HUF 2 million, 0.1%). The export revenue of Unicum grew by 2.5% but the export of pálinka plummeted by 31% (about 40 Th. liter), chiefly in the USA and Germany. As for Italy, the sale of the entire export portfolio repeated last year’s performance; exports to Romania jumped by 33%, and sales in the Duty Free segment rose by 30%.
The increase by HUF 738 million (equivalent to 13.9%) in the material cost of goods sold was due mainly to changes in volume.
The gross margin of sales improved by 0.3 percentage points (it climbed from 57.4% to 57.7%) mainly thanks to increase in sales prices.
Employee benefit expense increased by HUF 104 million (4.1%). At the start of the business year the Company granted an average pay hike of 3.8%. The headcount also grew, and those two factors raised the employee benefits expense.
The other operating expenses increased by HUF 135 million (5.0%) due mainly to increase both in marketing expenditure and in sponsorship under a tax benefit scheme. The increase in marketing expenditure is connected mainly to innovations, and other items were trade marketing and research. In the second half of the year the Company introduced in the Hungarian market Kalinka Gold premium vodka and Unicum Riserva super-premium digestif.
The other operating income decreased by HUF 46 million (-5.8%). That the Company had a lower year-on-year exchange rate gain explains the decrease.
The balance of financial income and financial expense decreased by HUF 12 million (-85.9%). The decrease was due to the lower deposit interest rates. The average level of cash in hand and in banks showed a 27% year-on-year increase.
The Company’s calculated tax (corporate tax, local business tax and deferred tax) increased by HUF 231 million (47.8%). The rise in calculated tax was higher than that in the Company’s profit before taxation (35.1%), and that rise in calculated tax was due mainly to a considerable increase in deferred tax. 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.
The Company’s profit after taxation according to the International Financial Reporting Standards (IFRS) stands at HUF 2 226 million, a year‑on‑year increase of 31.4% (previous: HUF 1 694 million).
There were few noteworthy year-on-year changes in balance sheet. Shareholders’ equity and Cash and cash equivalents increased by approximately HUF 550 each, which corresponds to the year-on-year increase in profits.
During the business year the Zwack Unicum Plc. spent HUF 585 million on fixed assets. Nearly half of that expenditure was of a supplemental type, and about 30% was spent on upgrading infrastructure. The Company spent about HUF 150 million on expanding its technological capabilities (the most important item being a de-palletising machine) and on projects of a marketing type connected to certain products.
The Company has 227 employees at the end of the 2016/2017 fiscal year (at the end of the 2015/2016 business year it had 218). Growth in headcount is due to mainly two factors: formerly outsourced activities are now executed by our own workforce, and the marketing department has increased in size.
This 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 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.
24 May 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:
