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BELUGA GROUP announces its operational results for the 1H2020

07
july 2020
  • BELUGA GROUP showed double-digit growth in the reporting period.
  • The company’s overall sales grew +15% up to 7,2 mln 9L cases.
  • The sales of the company’s own brands increased on 12% to 6,3 mln 9L cases.
  • The sales of imported brands showed strong positive trend +41% to 890 thousand 9L cases.

In the first half of 2020, the company’s overall sales amounted to 7,173 thousand 9L cases — exceeding last year’s result by 15%. Sales of the company’s own brands also demonstrated an upward trend of +12% and increased to 6,283 thousand 9L cases. The main drivers were Belenkaya and Arkhangelskaya vodkas, Zolotoy Rezerve cognac, Fox & Dogs and Troublemaker whiskeys and Green Baboon gin.

Significant upward trend is demonstrated by imported brands, with sales increasing by 41% to 890 thousand 9L cases. In the spirits, Barcelo rum and brands from the William Grant & Sons portfolio showed the most active growth. Sales of imported wines increased by 51%, with the best dynamics shown by Torres, Masi and Faustino wines.  

Alexander Mechetin, Chief Executive Officer of BELUGA GROUP commented on the results of the 1H2020: “The Group has demonstrated solid performance in a volatile environment. The company is showing double-digit growth in both its own and partner products. This is a direct consequence of our diversification strategy alongside the qualitative development of our distribution platform and innovations in brand marketing. Despite challenging environment, the Group has continued to launch new products, including the vodkas Snow Owl with Organic Spirit, Copper Horse Hearth Bread, Belenkaya with Organic Spirit, Arkhangelskaya Northern Herbs and Myagkov with Alfa Spirit, Orthodox — vodka based on a traditional, by-the-book recipe, which certainly will find its niche in the premium segment,— and the strong 60% tincture Arkhangelskaya Garlic with Pepper. In May, we introduced the long-awaited Tête de Cheval sparkling wines, which are made at the Golubitskoe Estate winery using the traditional Champagne method and grapes grown in Golubitskaya Strelka on Taman Peninsula.

Let me highlight the success of our products in global rankings. Three of the Group’s brands are named among the top 30 world vodkas in the Millionaires’ Club 2020 ranking by the high-profile British magazine Drinks International, with Belenkaya placing in the top 15. Arkhangelskaya topped the ranking of the fastest growing vodka brands around the world and placed second in the overall list of dynamically developing brands.

Together with strengthening our own products’ positions, the Group continues to increase the sales of both spirits and wines by partner brands. The growth in this segment amounts to 41%. Q2 marked the launch of a promising new product in the Group’s imported spirits range: the Armenian brandy Noy, one of the leaders of the category. And our agreement with Sogrape took effect on March 1, under which BELUGA GROUP became the exclusive distributor of the Portuguese brands: Mateus — a leader among Portuguese wines in Russia — as well as Sandeman ports and Silk & Spice wines.

The most important channel that allows us to quickly bring our brands to the market is our own WineLab retail chain. The number of click-and-collect orders increased in 1H2020 by 46% compared to the same period in 2019. Special attention was paid to managing the range and prices, developing digital tools and a customer-centric approach in general to ensure an even faster and better service that minimizes the time customers spend in stores and facilitates contactless handing of purchases. The number of outlets in our own retail chain grew to 622 by the end of Q2.

The company’s results enabled the inclusion of BELUGA GROUP shares in the Broad Market Index and Consumer Sector Companies Index of Moscow Exchange in late May. Thus now the base for calculation of the Broad Market Share Index, which features the top 100 securities selected based on the criteria of liquidity, capitalization and the proportion of shares in free float, includes ordinary shares of our company.

The COVID-19 pandemic demanded quick and precise actions from BELUGA GROUP in the interests of its investors and employees. These include increasing team security, adjusting the focus of work and tactics and supporting all our processes. We also provide targeted support to local communities, primarily to the regions where our teams are located. We have allocated tens of millions of rubles for the purchase of necessary equipment and for support of healthcare systems in Arkhangelsk, Primorsky Krai, Moscow and the Moscow Region.

The results from the first half of the year demonstrate that high performance of all the departments, new products in the brand portfolio, the development of WineLab retail chain together with effective management allows the company to successfully overcome challenges and hold a leading position in the Russian alcohol market. And I want to thank the whole team for these results — today even more than ever.”

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