Hawesko posts outstanding result for 2008
Outlook positive despite the recession
The wine trading group Hawesko Holding AG (HAW, HAWG.DE, DE0006042708) published its preliminary results for the fiscal year just completed (1 January – 31 December 2008) today. The Group increased its net sales in 2008 from € 333.7 million to € 338.8 million, corresponding to a rise of 1.5%. Sales in Germany rose by 4.3% compared to the previous year; in contrast, foreign sales of premium older-vintage Bordeaux wines declined after a strong upward trend in 2007. In 2008 the German wine market overall grew in terms of value by only 2.2%, according to the German Wine Institute. Thus, Hawesko has once again increased its share of the market. According to preliminary calculations, the consolidated result of operations (EBIT) amounts to approximately € 25 million (previous year: € 18.3 million) which is well within the expected range. The financial result will amount to a net expenditure of € 3.2 million (previous year: € -2.6 million) as planned. According to preliminary calculations, the rate of tax expenditures will be 34%, so that consolidated earnings after deductions for taxes and minority interests is currently anticipated to be approximately € 14 million or € 1.60 per share (previous year: € 6.7 million or € 0.76 per share). Free cash flow is expected to exceed the previous estimate of € 14 million by € 2 million to € 3 million. Against the background of these preliminary figures, the Hawesko management board sees the economic basis to propose a dividend payout at least in the same amount as the previous year (€ 1.00 per share) to the supervisory board. The consolidated accounts of the Hawesko Group will be audited in March 2009 and presented to the supervisory board for review.
For the fourth quarter of the recently concluded fiscal year (1 October to 31 December 2008), the Group achieved sales of € 111.3 million, a decrease of 4.6% compared to the corresponding quarter in the previous year (€ 116.7 million). Sales achieved in Germany in the fourth quarter were at the same level as in the previous year; outside of Germany, on the other hand, the demand for older Bordeaux vintages declined significantly. The Group’s EBIT amounted to about € 13 million in the final quarter of 2008, compared to € 13.2 million in the same quarter of the previous year. The stationary specialist retail segment (Jacques’ Wein-Depot) increased its sales in the fourth quarter by 4.4% to € 37.3 million; on a like-for-like basis sales grew by 3.6%. At the end of fiscal year 2008, there were 271 stores (end of the previous year: 269). During the course of the year, five new stores were opened. As part of the ongoing adaptation of the network to the customer base, three depots were closed and three moved to new locations. In the fourth quarter, the mail order segment achieved sales at the level of the comparable period in the previous year, € 32.9 million (previous year: € 33.2 million). Despite the increasing threat of recession, the business volume of the successful 2007 holiday quarter was achieved once again. In the wholesale segment, fourth-quarter sales amounted to € 41.1 million, corresponding to a decline of 13.8% compared to the previous year. This was due primarily to the worldwide weakness in the secondary market for older-vintage Bordeaux wines, which is the focus of the French subsidiary Château Classic Le Monde des Grands Bordeaux, especially in the Asian markets.
Alexander Margaritoff, chief executive officer of Hawesko, stated: ‘After we had dealt with extensive non-recurring charges and considerable investments in new customer acquisition in 2007, we accomplished a major step forward in 2008. Our business has continued to grow; we have increased the result from operations by more than 35%, at least doubled the net result and achieved the highest level of profit in the company’s history. The continuous improvements made in recent years are bearing abundant fruit, for we are now operating even more efficiently than before. The pundits are expecting a severe recession in fiscal year 2009. Things will become more difficult for Hawesko as well, especially in the first six months with the previous year as a challenging basis for comparison. Despite this, we believe that many consumers consider the enjoyment of wine an indispensable pleasure even in difficult economic times, so that wine consumption will remain relatively stable during the year overall. Of course, the current economic developments will not bypass us entirely, but we won’t experience a disastrous slump. After all, we’ve already met challenging economic conditions in the past as well.’
Hawesko Holding AG is a leading supplier of premium wines and champagnes. In fiscal year 2008 the Group achieved sales of € 339 million through its three sales channels – specialist wine retail (Jacques’ Wein-Depot), wholesale (Wein Wolf and CWD Champagner- und Wein-Distributionsgesellschaft) and mail order (in particular Hanseatisches Wein- und Sekt-Kontor), and employed 610 people.