Q4 and Full-Year 2023 Operating Results

Q4 results

·         The company successfully completed the peak selling season.

·         Overall sales were up 4.7% and reached 6.2 million 9L cases, an all-time quarterly high.

·         In-house brands increased by 3.4% and exceeded 5 million 9L cases.

·         Imported brands grew 10.2% to 1.2 million 9L cases.

·         The number of WineLab stores increased by 69.

Key figures for 2023

·         Overall sales increase by 1% and approach 18.9 million 9L cases. Compared to a stable 2021, this represents growth of +7.5%.

·         Excluding export sales, positive dynamic to 2022 is +2.6%.

·         Sales of in-house brands fell by 4% to 14.8 million 9L cases, mainly due to the cessation of exports. Nevertheless, the trend is +1.1% compared to 2021.

·         Imported brands grew by 23% to more than 4 million 9L cases, with spirits up 33% and wine up 16.8%. This is 39.8% more than the volumes realized in 2021.

·         WineLab: over the year, the number of outlets increased by 306 to more than 1,650, with sales up +35%.

Highlights of the year

·         The successful orientation of the business to the Russian market allowed the company to pass 2023 at a consistently high level.

·         Starting from the second half of the year, overall sales exceeded the figures for 2022, which were marked by a surge in sales in February-March.

·         Throughout the year, the premium brands from high-margin segments achieved double-digit growth rates, which had a positive impact on the financial performance.

·         The group was renamed Novabev Group. The new name emphasizes the uniqueness of the business model, which combines production, distribution and retail, and allows to put the focus on the group's coverage of all categories of spirits and wines.

·         In Russia, the fastest growing brands among the in-house ones are Beluga, Orthodox, Snow Owl vodkas, Green Baboon gin, Tête de Cheval and Golubitskoe Estate wines, while among imported brands are Barceló and Plantation rums, Armenian cognac Noy and wine portfolio, as well as novelties presented last year.

·         Twelve products were added to the range of in-house brands — three flavors of Beluga Noble Botanicals, three Golubitskoe Estate petnats, Orthodox Old Gold vodka, Fox & Dogs Smoky Barrel and Red Orange whiskeys, Golden Reserve Orange & Chocolate cognac, Devil's Island Pineapple Crush rum and Green Baboon Old Tom gin.

·         Import portfolio also includes new products: whiskey from Ireland, cognac from France, gin and whiskey from Japan, as well as wines from countries in demand among Russian consumers.

·         The financial results allowed the company to pay dividends of 320 rubles per share before tax for the first half of the year and 135 rubles for the third quarter.

WineLab results

·         The development of WineLab continued in 2023. The number of stores for the period reached 1,657, the scale increased by 23% over the year, the expansion took place in almost all regions of the chain’s presence.

·         Compared to the prior year, sales volume grew +35% and traffic +21%. Excluding organic growth, like-for-like sales were up 11.9%, traffic was up 3.5% and average ticket was up 8.1%.

·         E-commerce is expanding: online sales through the click & collect system more than doubled and the number of online orders increased by 124% to a total of 2.7 million. E-commerce accounted for 10% of chain’s total sales. This significant growth was supported by both storefront updates and the introduction of additional features, as well as the development of new sales channels — marketplaces and the launch of the WineLab Business B2B online service, which allows corporate customers to order alcoholic beverages. In 2023, the chain won in the category "Best E-com Transformation" in the prestigious RetailTech award and "Online Takeoff" in OMNI RATING.

·         One of the year’s achievement is the expansion of the WinClub loyalty program in all regions — points are accumulated for both online orders and offline purchases. The number of WinClub members exceeded 7 million. For the second year in a row, WineLab is among the top 3 chains with the best loyalty program in the prestigious rating of the INFOLine agency.

·         The functionality of the WinClub loyalty program for shareholders continued to develop: during the year, several additional motivational programs were held for shareholders participating in the program, including an accrual of an additional semi-annual dividend with WinClub points.

In 2023, the group continued to consolidate its position, diversify its product range, enter into partnerships, improve business efficiency and develop the WineLab retail chain, with a particular focus on the e-com business. The results demonstrate the company's ability to deliver resilient performance, even under challenging environments. It is important to give credit to the 13 thousand employees across the country who drive the group to record performance and create the future of Novabev Group. In 2024, the company will introduce new products, strengthen its retail business and e-commerce presence, and ensure consistently high product quality and large-scale presence in outlets.