Hawesko: Business development in the first quarter of 2009 meets expectations
Wine business viewed as relatively stable even in times of crisis
At today’s annual results press conference in Hamburg, the wine trading group Hawesko Holding AG (HAW DE, HAWG.DE, DE0006042708) presented its financial statements for 2008 with complete annual accounts as well as its three-month interim report for 2009 for the period from January to March. In the first three months of the current fiscal year, Group sales declined by 9.5% to € 73.0 million (same quarter in the previous year: € 80.7 million). As already disclosed, the figure for the comparable quarter of the previous year includes additional sales of € 2.8 million from the delivery of the 2005 Bordeaux vintage, which was in strong demand. Sales of ultra-premium wines from Bordeaux and other wine-growing areas posted a noticeable decline in the quarter under review. However, the specialist retail (Jacques’ Wein-Depot) and mail order segments – the latter adjusted for the effect of the delivery of the 2005 Bordeaux vintage in the same quarter of the previous year – achieved a course of business which was stable to slightly above that of the previous year. Both of these segments focus on sales to end consumers. Business in the wholesale segment was characterised by the worldwide weakness of the secondary market for older-vintage Bordeaux wines, which is the primary focus of the French subsidiary company Château Classic – Le Monde des Grands Bordeaux, as well as by restraint in the catering trades. The result from operations (EBIT) amounted to € 3.1 million (previous year: €4.6 million), while the consolidated result after taxes and minority interests amounted to € 1.9 million (previous year: € 2.7 million). Earnings per share amounted to € 0.21, down from € 0.31 in the comparable quarter of the previous year.
The Hawesko management board notes that the figures for the first quarter of 2009 are within the expected range of its financial planning, considering that the outstanding performance in the previous year’s quarter is a very high basis for comparison. In view of the extremely difficult economic situation the management board expects a decline in sales in 2009 in the mid-single-digit percentage range (Group sales 2008: € 339 million). It makes no forecast for the 2009 result, but a clearly positive result as well as free cash flow significantly in the positive range for the year overall are expected.
Chief executive officer Alexander Margaritoff stated, ‘No matter which indicators or indices, barometers or statistics you use, the economic situation is desolate. Despite this, our development in the current fiscal year is not as negative as could have been expected. In times of crisis, people may give up their glass of champagne or ultra-premium wine, but not wine as such. We do not expect to beat the successful 2008 fiscal year – the best in our company’s history – but from today’s standpoint we have a good chance that 2009 could be the second-best year in the history of the company. As the strongest company in the wine sector, highly profitable and debt-free, we are in an excellent position in the market. We can rely on the best exclusive rights available in the wine business, we have an experienced executive management staff and a clearly defined and proven strategy which has been based for the past 45 years on Hanseatic virtues such as long-term relationships, solidity and transparency, and on customers who place their trust in the quality of our wines, our service and us as a company.’
The annual report presented for 2008 confirms the previously announced figures for the reporting period: net Group sales (excluding VAT) increased by 1.5% to € 338.8 million. Sales in Germany rose by 4.3% compared to the previous year, while a rise of only 2% was posted for the German wine market overall in 2008. Hawesko thus once again gained market share. At € 25.5 million, the operating result (EBIT) rose by 40% compared to the previous year (€ 18.3 million). The non-recurrence of a special tax expenditure in the previous year meant that the Group result after deductions for taxes and external interests more than doubled to € 14.6 million (previous year: € 6.7 million). Likewise, earnings per share rose to € 1.67 (previous year: € 0.76). At 23%, the return on capital employed (ROCE) for 2008 clearly exceeded the hurdle rate defined by the management board of 16% (previous year: 16%), while the free cash flow amounted to € 17.5 million (previous year: € 13.6 million). An increase in the dividend to € 1.20 (previous year: € 1.00) is being proposed to the annual shareholders’ meeting on 15 June 2009.