BELUGA GROUP announces its operating results for 1H2022

Results vs 1H2021:

·         BELUGA GROUP showed double-digit growth in the reporting period.

·         Overall sales up 13.6%.

·         In-house brands grew +10.9%.

·         The sales of imported brands increased on 29.4%

The company's overall sales totaled of 8.26 million 9L cases in the first half of 2022, up 13.6% from 2021 year on year.

Growth was recorded in all business divisions.

Sales of the company’s own brands rose 11% to 6.87 million 9L cases. Commitment to the strategy of portfolio diversification helps the company to achieve high operational results. Double-digit growth was demonstrated by brands in the premium segment and higher, which indicates a better sales margin. The key brands showing a strong growth dynamic were Beluga, Snow Owl, Orthodox, PARKA and Arkhangelskaya vodkas, Tiflis Treasures brandy, Fox & Dogs whiskey, Beluga Hunting bitters, Green Baboon gin, Devil’s Island rum and Golubitskoe Estate and Tête de Cheval wines.

Sales of imported partner brands showed double-digit growth +29.4% to 1.39 million 9L cases. The spirits brands with the most impressive increase were Armenian cognac Noy, Dominican rum Barceló and the collection of imported wines, which showed + 31.3%.

The quantitative and qualitative growth of WineLab continued: the volume of own retail sales increased by 33.8%, the number of outlets reached 1,234.

Alexander Mechetin, Chief Executive Officer of BELUGA GROUP commented: “In the first half of the year, our company showed double-digit growth owing to the increased demand in a situation of uncertainty and the consumers’ desire to stock up on products. In this regard, I would like to note the importance of brand portfolio diversification, and, in particular, the localization of the production of a number of spirits. For example, Fox & Dogs whiskey and Devil's Island rum, which are produced in the homeland of drinks and bottled in Russia, are growing at a faster pace. The collection of the latter was enriched in June with Dark Añejo, a dark aged rum, and now the brand's line comprise of four flavors. In addition, in the second quarter, we introduced a number of novelties – Belenkaya Klyukvennaya vodka, Golden Reserve Apricot aperitif, Arkhangelskaya on Pine Nuts and Arkhangelskaya Pepper with Northern Honey, as well as Myagkov Cherry with Cognac and Myagkov Cowberry with Honey, and the wine collection introduced Golubitskoe Estate petnates and new volumes of Tête de Cheval 0.375 and 1.5 liters. In general, the collection of the company's own brands is represented by strong products, which are an alternative to outgoing foreign spirits and the possibility of import substitution.

The demand for our products and their strong position in the world is confirmed by the recent annual ranking of The Millionaires’ Club 2022 by the high-profile British magazine Drinks International, which ranks global spirit brands selling over 1 million 9L cases. Belenkaya, Arkhangelskaya, and Tsar. Arkhangelskaya tops the ranking of fastest-growing spirit brands worldwide across all categories while Belenkaya is the No. 1 Russian brand in the general ranking. Based on the the results of 2021, three BELUGA GROUP brands Belenkaya, Arkhangelskaya and Tsar were again included in it. At the same time, Arkhangelskaya moved up four lines in the overall rating compared to last year.

WineLab continues to expand: sales increased by 33.8%, and the number of outlets exceeded 1,200. Both customer traffic (+38.7%) and the average check (+12.7%) are growing. The e-commerce sector continued to develop: it’s share in the chain is now 4.97% versus 3.7% last year, click & collect sales increased 2.1 times YoY. More than 55,000 e-orders are picked up in WineLab stores every month. We continue to work on increasing sales volumes, operational efficiency and customer focus in the chain, and we approach the opening of new stores with even greater attention and selectivity, focusing primarily on quality, not quantity.

Summing up, I would like to note that the company's positions are stable, and the results of the first half of the year strengthened them even more. We see a number of opportunities for business development even in the current environment. At the same time, the team has to solve completely new tasks every day and minimize the risks associated with the availability of components, supply chains and settlements with foreign counterparties. I would like to thank colleagues for this work and dedication, we will continue to make such an important and necessary extra effort to overcome challenges and further develop the group in the interests of our customers, employees, partners and shareholders".