Increasing Sales at Zwack Unicum Plc.

The Zwack Unicum Plc., the biggest player in Hungary’s spirit market, had total gross sales of HUF 36 938 million in the 2023-2024 financial year – a year-on-year increase of HUF 1,574 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). That is according to a press statement released after the company's Annual General Meeting (AGM) held this Wednesday.

Net domestic sales of products had an increase of HUF 1,303 million (7.3%) over the previous business year. Net sales of own-produced goods in the domestic market increased by HUF 1,111 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, only the sale of the Unicum liqueur had above-average growth.

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 performed higher than average.

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%.

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. A major factor in this was that, as from the second half of 2023, the retail division fought an aggressive price war to win consumers back. Those efforts had a favorable effect on the turnover of many of the company’s brands.

The export of products fetched HUF 2,196 million, with a year-on-year decrease of 6.1% (HUF 141 million). Among Zwack Unicum’s major export markets, sales to Italy had a year-on-year growth of 4%, the company almost reached the revenues of the last business year in Romania, however exports to Germany fell significantly (by 17%) and also decreased in Slovakia (by 12%). Just as in the third quarter, the duty-free segment did better in the third quarter than in the corresponding period a year before, and considering the entire business year, grew by 11%.

All in all, in its 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 the previous business year. The decrease of aggregated export revenues was the consequence mostly of the underperformance of products that were not in focus.

The revenue from services was HUF 1,204 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’ Center (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 favorable change in the product mix (sales of own-produced products with higher margins increased more than sales of traded products), the statement says.

The majority owner (50% + 1 shares) of Zwack Unicum Plc. is a joint venture of the Zwack and the Underberg families; the Diageo Group has 26% of the shares, and the rest of the shares belong to some 3,000 institutional and private investors.