BELUGA GROUP announces its operating results for the 3Q and 9 months of 2022

october 6 /2022

9 months results:

  • The company's overall sales +8.4%.

  • The sales of the company’s in-house brands 6.2%.

  • The sales of imported brands +20.2%.

  • The WineLab retail chain has continued to develop: the number of outlets now exceeds 1,250, total sales have increased by 55.7%.

In the first 9 months, sales of the company’s in-house brands rose 6.2% and totaled to 10.5 million 9L cases, sales of imported brands increased on 20.2% to 2.2 million 9L cases. Thus, the company’s overall sales grew on 8.4% and reached 12.7 million 9L cases.

In the Q3, sales of the company’s in-house brands are slightly down to 3.6 million 9L cases (-1.5% in comparison to the last year's performance). It was caused by a halt in exports to the US, Europe and Travel Retail (Duty Free stores) after sanctions’ imposition, as well as stock of products made by chains and outlets in the 1st half of the year. At the same time, brands in the premium segment and higher demonstrated a very positive dynamic. Sales of imported brands are up by 6.6% to 784 thousand 9L cases. Thus, the company’s overall sales remained on the last year’s level and amounted to 4.4 million 9L cases.

The growth of brands in the premium segment and above continued. Sales drivers in the Q3 among the in-house products are Bastion (+38%), Tiflis Treasure (+18.8%) and Golden Reserve (+5%) brandies, Orthodox vodka (+36.7%), Fox & Dogs whiskey (73.4%), Green Baboon gin (+217.2%), and Devil’s Island rum (+322.4%), and among the imported – Noy cognac (+6%), Dominican rum Barceló (+26.3%) and the collection of imported wines (+25%). In the Q3, the product portfolio was strengthened by promising SKUs that have already appeared on store shelves. Among them are the relaunched vodka brands in the mid-price segment Zimnyaya Doroga and Staraya Moskva, novelties in existing lines, in particular, cranberry vodkas in the Belenkaya and PARKA collections, Arkhangelskaya on Pine Nuts and Arkhangelskaya Pepper with Northern honey, as well as banana and blackcurrant gin in the Green Baboon range.

The increase of the in-house non-vodka brands’ share in premium segment as well as growth of imported products, exclusively presented by the group in Russia, have a positive effect on business profitability, and also vindicate the efficiency and accuracy of the chosen premiumization and business diversification strategy. At the same time, BELUGA GROUP continues to develop brands in the mainstream segment, considering the economic situation. The company will continue to monitor trends and consumer preferences and release new products in popular categories as well as sign new contracts with promising suppliers, whose assortment will replace the outgoing foreign spirits and wines.

The development of beverage supermarket chain WineLab is one of the priorities for the group. The number of outlets for the period exceeded 1,250, and sales increased by 55.7% compared to the 9 months of the last year. Both customer traffic (+38.6%) and the average ticket (+12.4%) are growing. The e-commerce sector continued to develop: the click & collect sales up 114% YoY, and the number of orders increased on 143%. More than 598,000 e-orders were picked up in WineLab stores for the reporting period. The chain is actively cooperating with marketplaces and online delivery services; Yandex.Food, SberMarket and Delivery Club were added to partnerships with SberMegaMarket and Wildberries in the third quarter. In addition, WineLab has launched a points-based loyalty program that successfully complements the discount program, which counts over 5.5 million members.

Based on the half-year financial reporting results, the shareholders approved in October the payment of interim dividends for 1H2022 in the amount of RUB 150 per share before tax, a total of RUB 1.996 bln or 88% of BELUGA GROUP’s net consolidated profit for 1H2022 under IFRS. The growth of dividend’s payment per share for H1 2022 is 106% compared to H1 2021.

The company demonstrated strong results in the 9 months. This was achieved due to a wide range of brands represented in all key categories and segments, the operation of in-house retail and the effective actions of the team, managing to cope with the challenges of 2022. The group will continue to strengthen its position in Russia, using emerging growth opportunities, provide customers with in-demand products, including by entering into new contracts with foreign partners, and develop the WineLab retail chain, paying special attention to e-commerce.

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