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Preliminary Results for the Year Ended 30 September 2020

Download the full Preliminary Results statement (PDF 1.09MB)

Preliminary results for the year ended 30 September 2020

A resilient performance during uncertain times, with results ahead of expectations

2 December 2020: Stock Spirits Group PLC (“Stock Spirits” or the “Company”), a leading owner and producer of branded spirits and liqueurs that are principally sold in Central and Eastern Europe and Italy, announces its results for the year ended 30 September 2020.


  Reported results   Underlying results at constant1 currency excluding acquisitions made in 2019 Constant currency is calculated by converting 2019 results at 2020 FX rates. Underlying also excludes the impact from acquisitions made in 2019
All values in € millions unless otherwise stated 12 mth to
Sept 2020
12 mth to Sept 2019 % change Underlying 12 mth to Sept 2020 Underlying 12 mth to Sept 2019 % change
Volume (millions 9 litre cases) 14.8 14.4 3.0% 14.6 14.4 1.8%
Revenue 341.0 312.4 9.1% 324.5 303.6 6.9%
Adjusted EBITDA2 71.0 67.0 6.1% 68.9 65.9 4.6%
Operating profit before exceptional expenses 57.8 54.5 6.0% - - -
Operating profit 33.6 42.9 -21.5% - - -
Profit for the year 19.6 28.4 -31.2% - - -
EPS basic - €cents per share 9.83 14.33 -31.4% - - -
EPS adjusted basic - €cents per share2 21.42 19.75 +8.5% - - -
Net debt 22.7 55.4 -59.1% - - -


All comparative figures for the 12 months to September 2019 have been restated to align with the new IFRS16 requirements, which were adopted by the Group on 1 October 2019.
  • Underlying volumes up +1.8%, underlying revenue up +6.9% and adjusted EBITDA up +4.6%: a resilient performance against the backdrop of the global pandemic in H2, and excise tax increases in Poland and the Czech Republic in H1
  • Revenue and EBITDA in Poland up +15.1% and +18.3% respectively (at constant currency), with our market share in the key vodka category at a five year high of 31.6% as at September 2020
  • A robust response to COVID-19 with no disruption to operations and no use of furlough schemes or other government assistance
  • Positive contribution from 2019’s acquisitions – Bartida in the Czech Republic, and Distillerie Franciacorta in Italy - despite on-trade lockdowns in both of those markets
  • Cash conversion remains strong, delivering 112.1% (2019: 91.5%), with close working capital management through the pandemic. Net debt of €22.7m at 30 September 2020 equates to leverage of 0.32x3
  • Exceptional items total a net €23.0m; of which a net €21.1m are non-cash items (largely impairment of our traditional Italian brands and Irish whiskey investment), and €1.9m of cash items
  • Total ordinary dividend for the year +6.8% at 9.55 €cents per share (after a proposed final dividend of 6.78 €cents per share, up +7.4% up on last year’s final dividend4); in addition the Board is proposing a special dividend of 11.00 €cents per share

Constant currency is calculated by converting 2019 results at 2020 FX rates. Underlying also excludes the impact from acquisitions made in 2019

2 Stock Spirits Group uses alternative performance measures as key financial indicators to assess underlying performance of the Group. Details of the basis of calculation for Adjusted EBITDA can be found in note 5 to the statutory reported figures. Adjusted EPS is the EPS excluding exceptional expenses and can be found in note 10 to the statutory reported figures.

3 Leverage at 30 September is net debt as at 30 September divided by the 12 month Adjusted EBITDA to 30 September including    IFRS 16 adjustments for 2020 for both measures

 Subject to shareholder approval at the AGM on 4th February 2021, the final and special dividend will be paid on 19th February 2021 based on the record date of 29th January 2021

Commenting on the results, Mirek Stachowicz, Chief Executive Officer, said:

“We are pleased to have delivered a resilient performance against the backdrop of a hugely challenging year. In H1, we successfully navigated excise tax increases in our largest markets of Poland and the Czech Republic. In H2, we prioritised protecting and supporting our employees, customers, suppliers and the communities around us in the face of the COVID-19 pandemic.

Our strategy of sourcing and manufacturing nearly all of our products locally ensured that there has been no disruption to our operations. In addition, our longstanding focus on the off-trade served us well during the closure of the on-trade as a result of lockdowns. Our portfolio of brands performed strongly, boosted by consumers opting to buy familiar and trusted local brands during times of uncertainty, as well as by the trend towards staycations in our markets. Our strong operational and financial performance has enabled us to continue to invest in our brands and our business, and to return surplus cash to our shareholders in the form of a special dividend.

While there remains some uncertainty in the short-term outlook, in the longer term we are confident that we will emerge from the pandemic with an even more loyal and engaged consumer base, closer customer and supplier relationships, and a stronger business than ever before. As such, we remain confident in the future prospects of Stock Spirits.”

Analyst presentation

Management will be hosting a presentation via an audio webcast and conference call which will be hosted by CEO Miroslaw Stachowicz and CFO Paul Bal at 9:00am (GMT) on Wednesday 2 December 2020. Dial-in details are below. Please dial-in at least 15 minutes prior in order to ensure a timely start to the briefing.

A webcast of the presentation will also be available via and a recording made available shortly afterwards.

Location Phone Number Passcode
International +44 (0) 2071 928 338 3728837
UK 0800 279 6619

Please note that questions will only be taken over the conference call and not the audio webcast.

A replay of the audio webcast will be available shortly afterwards on the same link as above.

For further information:

Stock Spirits Group:                               +44 (0) 1628 648 500

Paul Bal

Powerscourt                                            +44 (0) 207 250 1446

Rob Greening                                 
Lisa Kavanagh
Bethany Johannsen

A copy of this preliminary results announcement ("announcement") has been posted on

Investors can also address any query to

About Stock Spirits Group

Stock Spirits is one of the leading branded spirits and liqueurs businesses in Central and Eastern Europe and Italy, and offers a portfolio of products that are rooted in local and regional heritage. With businesses in Poland, the Czech Republic, Slovakia, Italy, Croatia and Bosnia & Herzegovina, Stock Spirits also exports to more than 50 other countries worldwide. Global sales volumes currently total over 125 million litres per year. 

Stock Spirits has production facilities in Poland, the Czech Republic, Germany and Italy. Its portfolio includes well-established “millionaire” (selling in excess of one million 9 litre equivalent cases per annum) brands including Żołᶏdkowa, Lubelska, Božkov and Stock Prestige, local leaders such as Stock 84 brandy, Fernet Stock bitters, Keglevich and Limoncè, as well as more recent innovations including Amundsen Expedition vodka and Božkov Republica rum.

Stock Spirits is listed on the main market of the London Stock Exchange. For the year ended 30 September 2020 it delivered total revenue of €341.0m and operating profit before exceptional items of €57.8m.

For further information, please visit

Chairman’s Statement

As Chairman of Stock Spirits Group PLC, I am pleased to present our preliminary results for the year ended 30 September 2020.

This year has brought challenges like no other, but we have demonstrated great resilience across the Group. The early response of governments in our key markets shielded us from the worst effects of the pandemic, but we have still had to adapt and respond to protect our people and maintain production for our customers and consumers. To that end I, and the entire Stock Spirits Board, want to thank all our teams for their continued hard work, professionalism and dedication in delivering outstanding service to our customers in hugely demanding circumstances.


Our resilient performance has enabled us to redefine our progressive dividend policy and deliver a higher pay-out than in recent years. Our proposed final dividend for the year is 6.78 €cents per share (2019: 6.31 €cents) and is a +7.4% increase on last year’s final dividend. There were no acquisitions during the year and, while we continue to assess a range of opportunities, the continuing pandemic means that we are unlikely to complete a meaningful and value-creating acquisition in the near-term. The Board has consistently said that it would consider additional distributions to shareholders under such circumstances. Taking into account our robust operational and financial performance that has resulted in our strong capital position, the Board is also proposing a special dividend of 11.00 €cents. This results in total dividends for the year of 20.55 €cents per share, up +130% on the total dividend for the prior year (2019: 8.94 €cents per share).

Looking ahead

We are still in a time of huge uncertainty due to the ongoing effects of the pandemic, and ensuring that Stock Spirits continues to stay resilient, agile and responsive will be the Board’s key focus in the coming months. However, I am confident that we have the right business model and strategy in place, and that our collegiate, collaborative culture – at Board level and throughout the Group – will result in decisions and actions being made to secure the success of Stock Spirits for the long term.

Chief Executive Statement

Against a challenging backdrop, I am pleased to report that we have delivered revenue of €341.0m and adjusted EBITDA of €71.0m, an increase of +9.1% and +6.1% respectively. Excluding the acquisitions completed in 2019, and on an underlying constant currency basis, these increases were +6.9% and +4.6% respectively. Like all companies, we have been tested this year, but our unique locally-focused business model has proved resilient against the pandemic, and our culture of small company agility saw every member of the Stock Spirits team rise to the challenge. I thank all of our colleagues for their dedication in the face of difficult working conditions.

H1: good strategic progress whilst responding to significant excise increases

The year began with uncertainty due to the impending increases in spirits excise tax in both Poland and the Czech Republic, our two largest markets which account for more than 80% of our revenue and profits. However, as reported at our half-year results in May, we performed above expectations due to extensive preparations and management of the changes.

We were also making good progress against our M&A objectives. However, work has been interrupted by COVID-19. This resulted in the write-off of the €1.3m invested in preparatory work. The first pandemic wave also impacted heavily on our investment in the Quintessential Brands Irish whiskey joint venture and resulted in an impairment of €14.2m.

H2: demonstrating resilience in the wake of COVID-19

With c.15% of the Group’s revenues historically coming from the on-trade, we have inevitably suffered some loss of revenues due to the widespread closures of on-trade channels as a result of the pandemic in H2.  However, our long-standing focus on the off-trade and no reliance on duty-free channels stood us in good stead. Our portfolio of local brands performed very well as shopping habits changed and consumers reverted to familiar and trusted brands in uncertain times. This trend was further boosted by “staycations” during the summer.

The extent of this mitigation was particularly evident in the Czech Republic where on-trade would normally account for over 30% of revenues. Despite losing much of the on-trade business for some four months, underlying Czech revenue for the year was almost flat and underlying adjusted EBITDA was up +2.3% (all at constant currency) .

Italy and Croatia, heavily reliant on tourism and on-premise consumption, were the two markets where we felt the most severe impact of the pandemic, resulting in the impairment of €9.6m taken against our traditional Italian brands in H2.  This impairment does not involve the newly-acquired Distillerie Franciacorta brands that performed with pleasing resilience.

Our operating model - built on localised sourcing and manufacturing prevented disruption to our supply chains by border closures. Local relationships with our customers were further strengthened as we temporarily extended credit terms where necessary. Our close ties with local suppliers ensured continuity in the supply chain.

During lockdowns, we leveraged our digital platforms to stay in touch with our consumers and assist key stakeholders. For example in Italy, our ‘Skip the Ordinary’ online campaign for Keglevich has been a significant success, drawing an online audience of over five million views and making a substantial contribution to strengthening Keglevich’s share in the flavoured vodka category from 73.6% to 77.7%5.

Despite the impact of COVID-19, both of the acquisitions made in 2019 performed strongly. Distillerie Franciacorta in Italy showed resilience in the face of very challenging market conditions. It delivered a small positive EBITDA contribution this year, and we continue to expect it to be earnings enhancing in 2021. Bartida, the acquisition in the Czech Republic, performed extremely well, delivering €1.5m in EBITDA in the year - well ahead of our expectations despite its reliance on on-trade distribution.

New Product Development  (“NPD”)

Another strategic response to COVID-19 involved accelerating our NPD programme leveraging our strong routes-to-market and introducing new products faster than our competitors. In Poland, our NPD focused on the more profitable flavoured vodka. A notable example was new Żołądkowa Gorzka Rześka, which sold over one million litres in its first six months. As a result, we significantly improved our market share of these higher-margin products.

We also enjoyed positive results from repositioning the Fernet brand in 2019, with the premium variant Fernet Stock Barrel commanding a retail price c.28% above mainstream Fernet Original.


Given the resilience of our performance, we were able to continue with investments in key projects to develop a more sustainable business model for the future. Planning work continued on the new distillery at our Lublin facility and, whilst we have had to manage the uncertainties around COVID-19, we still expect it to come on-stream in FY2023 as planned, and deliver a five year pay-back. Our OneSAP project to develop and implement a Group-wide enterprise resource planning solution also continued largely unaffected and is making good progress.

Prioritising our stakeholders

The pandemic has provided us with an opportunity to demonstrate our firm commitment to the social aspects of our Environmental, Social and Governance agenda. Although our resilience to the crisis has benefitted all of our stakeholders, our top priority throughout remains the health and wellbeing of our people. We implemented an extensive range of cleaning and social-distancing measures to provide on-site workers with a safe working environment and office-based staff have predominantly been working from home since March.

We have not utilised government support such as furlough schemes or other similar initiatives. Furthermore, there have been no lay-offs or pay reductions as a result of the pandemic. In fact, we rewarded many of our staff with additional incentives for their hard work and dedication when faced with more demanding working conditions in our manufacturing and logistics facilities.

We carried out our annual employee engagement survey in March in the midst of COVID-19 in our main markets. It received a record response, and showed that our response to the situation improved engagement levels.

We are proud to be able to help many of our stakeholders as well. We produced hand-sanitiser in Poland, the Czech Republic and Germany, donating it to customers, local authorities and hospitals along with supplies of pure alcohol. We also allowed the Polish government to use our facilities to produce a spirit that was used in their own hand-sanitiser. Our support to stakeholders is perhaps summed up by our Czech business being nationally recognised by the CZECH TOP 100 Association, acknowledging them as ‘heroes in the fight against Coronavirus’.

For our investors, the pandemic gave us opportunity to demonstrate how differentiated and resilient our business model is. While many companies reduced or cancelled dividends, we are pleased to be able to redefine and enhance what our progressive dividend policy means, as well as propose a special dividend.


Our four-pillar strategy remains successful and as relevant as ever. We will continue to deliver value by focusing on premiumisation, millennials and digital, as well as being ready to re-start M&A activity as conditions permit.

We remain alert to new regulatory developments. In Poland, as previously announced, legislation was passed in the summer to implement additional taxes on small format pack sizes (300ml or smaller) of alcoholic products from 1 January 2021. We have in hand a range of potential commercial and operational actions to mitigate the possible impact, and our successful management of the recent excise changes gives us confidence in our ability to respond to this new development.

As we near the end of the Brexit transition period, our message remains that we expect to see no material impact on our business irrespective of the nature of the UK’s final arrangements with the EU.

We take encouragement from the resilience that our business has shown in a year of challenges, from excise increases to the COVID-19 pandemic. Our products have shown themselves to be trusted brands, our customer and supplier relationships are stronger than ever before, and our business model has been proven to be strong throughout the crisis. While there remains some uncertainty in the short-term outlook due to the pandemic, we continue to see many opportunities for future growth in our markets, and to be confident in the long-term prospects of Stock Spirits.

5 IRI data, total Italy, modern trade MAT September 2020

Our markets in detail


Revenue for the year in Poland was significantly ahead of last year at €193.6m (2019: €171.7m), with adjusted EBITDA also showing strong growth at €49.9m (2019: €43.1m).

Market overview

Despite the +10.0% excise tax increase on spirits in January followed subsequently by the COVID-19 crisis, the total spirits market in Poland achieved value growth of +10.7% and strong volume growth of +3.7%6.

Poland is the world’s third largest vodka market by value and volume, with the highest CAGR growth over the last five years of the top ten vodka markets in the world. Vodka is by far the largest spirits category in Poland (c.80% of total spirits volume)6.

Clear and flavoured vodka was by far the greatest contributor to total spirits growth, delivering c.60% of total absolute value growth, whilst 30% came from the second biggest spirits category, whisky6.

Total vodka category value growth of +8.4% during the last 12 months was well ahead of volume growth at +1.8%, in part driven by the excise increase, but also by the positive impact of premiumisation and reduced price-discounting during the pandemic7.

The fastest overall value growth rate was from the flavoured vodka sub-category at +8.8%, but the far larger clear vodka category also achieved value growth at +8.2% and was the greatest contributor to absolute growth7.

The global trend to premiumisation in spirits continued to be visible in Poland also during the period of pandemic. Total premium vodka achieved value growth of +16.0%, significantly ahead of the total category, reflecting Polish consumers’ readiness to pay more for premium quality vodka as affluence increases. 

Performance of our core brands

Stock Spirits outperformed the total vodka market in Poland, driving continued share gains as we focused on profitable growth.  Stock grew total vodka volume +2.4% and value +9.2%7. Stock’s total vodka volume share grew from 29.0% last year to 29.1% this year and value share grew from 29.5% to 29.7%7. Our market share growth accelerated in the second half of the year, and we achieved 31.6% value market share in the month of September, the highest in five years 7.    

The leading contributor to our clear vodka share growth was the continued success of our largest brand, Żołądkowa De Luxe, with a value growth of +11.1%7, supported by consistent consumer activation at the point of purchase.

Our brand leader in the premium segment, Stock Prestige, grew value by +5.4%7 and maintained its leadership of this increasingly competitive segment, despite being heavily impacted by the reduction in celebratory usage occasions as a result of the COVID-19 lockdown.

Amundsen Expedition, another of our premium vodkas, grew value by +15.1%, over triple that of the top premium segment where it is positioned, whose value growth was +5.0%7.

New Product Development

Stock Spirits grew total flavoured category volume and value versus last year, achieving our ambition to recapture the lead position in flavoured category growth. Żołądkowa Gorzka achieved MAT value growth of +17.5%7, supported by the roll-out of our Kolonialna premium new product development and the introduction of two new lighter tasting variants under the ‘Rześka’ (‘Fresh’) sub-brand. This broadened the brand’s appeal to millennials, in particular female and young adult drinkers, and especially during the summer months.

Our largest flavoured brand, Lubelska, delivered +4.7%7 value growth despite the reduction in out-of-home small format impulse purchases, which is usually a significant proportion of the brand sales. The Saska flavoured range continued to build its position amongst emerging spirit drinkers, achieving MAT value growth of 23.3%7, supported by the roll-out of our highly successful new flavours such as mango in April 2020.

Small format tax

Legislation was passed in the summer of 2020 to implement additional taxes on small format pack sizes (300 ml or smaller) of alcoholic products from 1 January 2021. Our recent successful management of the excise changes earlier in the year gives us confidence in our ability to respond to this new development and we have in hand a range of commercial and operational actions to mitigate the impact from this legislation change.

Czech Republic

Revenue for the year also grew strongly in the Czech Republic to €87.3m (2019: €81.3m) due to the contribution of the prior year acquisition, with adjusted EBITDA at €26.1m (2019: €24.3m).

Excluding the impact of the Bartida acquisition completed last year and at constant currency, underlying revenue was flat at €78.1m (2019: €77.9m) whilst adjusted EBITDA for 2020 was up +2.3%, delivering €24.6m (2019: €24.0m).

Market overview

Stock has held spirits market leadership in the Czech Republic for over 20 years8 and has brand leaders in the key spirits categories of rum9, vodka and herbal bitter liqueurs10.

Total spirits in the Czech Republic’s off-trade grew value at +11.0% and volume +5.6%, despite the spirits excise increase of 13.2% in January of this year and the subsequent impact of COVID-1910. The four core categories on which Stock focuses - rum, vodka, herbal bitters and whisky - together account for c.75% of total spirits volume, and are the key drivers of overall spirits performance. Double-digit value growth was achieved by rum, vodka and whisky. High growth from those categories off-set lower growth from herbal bitters10.

Performance of our core Brands

Overall performance of our Czech brands for the year was ahead of our expectations, particularly given our strong participation in the on-trade. Whilst value share declined slightly from 34.2% last year to 33.6% this year, the combination of our premium innovation, the benefits from previously acquired brands, and the contribution from our distribution brands delivered value growth of +8.8% and volume growth of +4.8%, maintaining market leadership and delivering the greatest absolute value growth in the market10.

Stock grew value share of the largest Czech spirits category, local rum, from 64.6% to 65.8%10, driven by our brand-leading Božkov Tuzemsky, which gained from shoppers’ shift to trusted, well-known local brands, as well as consumers’ increased at-home consumption during the pandemic. Božkov Republica maintained brand leadership of imported rum, supported by premiumisation through its award-winning new aged variant, Republica Reserva, despite the launch of an aggressively discounted ‘look-alike’ competitor.

In the highly price competitive vodka category, Stock maintained its brand portfolio value share leadership and grew value +13.4%10 in the face of aggressive discounting by private label and competitor brands which maintained their pre-excise increase price points.

These successes outweighed share decline in herbal bitters, where Fernet Stock’s value share reduced from 28.0% to 26.5%10, driven by changed retailer promotional strategies coupled with continued aggressive price discounting by Jagermeister. Fernet Stock’s share has been gradually recovering as the full re-launched range is established, and the resulting revised price architecture takes effect.


Stock Spirits completed the acquisition of Bartida in May 2019, bringing new brands and step-changing our capabilities in the premium on-trade channel. Notwithstanding the significant impact of COVID-19 on the Czech on-trade in the second half of this year, the contribution from Bartida exceeded our expectations. In line with our plans, the business is earnings-enhancing in the first year after acquisition.

This was possible thanks to the accelerated roll-out of the acquired brands and faster attainment of cost synergies. Bartida’s expertise is also beginning to make a wider contribution across the Group.


Revenue for the year in Italy was ahead at €30.6m (2019: €26.9m), with adjusted EBITDA of €2.0m (2019: €3.6m).

Excluding the impact of the acquisition of Distillerie Franciacorta completed last year, underlying revenue and adjusted EBITDA for 2020 was €24.7m and €1.9m respectively (2019: €25.4m and €3.8m).

Market overview

Of all our markets, Italy was the most heavily impacted by COVID-19 and the on-trade holds the highest proportion of total spirits sales. Several spirits categories serve ‘higher energy’, social gathering-orientated usage occasions. The on-trade was shut down for several months during the pandemic lockdown, such usage occasions were curtailed, and both have yet to recover to historical levels.

Consequently, total spirits grew +7.8% value and +7.9% volume in the modern off-trade in 202011 but the total market (including on-trade) declined by -2.3% in value.

Performance of our core Brands

COVID-19 significantly impacted several of Stock’s key categories, notably limoncello, the Beam Suntory range that was introduced in H2, and flavoured spirits. The resulting impact of this is an impairment against the carrying value of our historical Italian brands of €9.6m, classed as an exceptional item. At the same time, spirits categories in which we do not participate were impacted less severely. Due to the introduction of Beam, Stock Italia’s value share of the total modern trade increased slightly to 7.2% (versus 6.9% last year)11. Encouragingly, the last quarter of our financial year saw a stronger performance, with growth from grappa, brandy, clear and flavoured vodka. However, this was off-set by continued declines from Limoncè, whose usage occasions remained heavily impacted by COVID-19. Full production and bottling of Limoncè was restored to Italy during the last quarter of the financial year, with the expectation that this should facilitate our marketing of this iconic brand.


The acquisition of Distillerie Franciacorta, completed in early June 2019, made Stock the number-one grappa player in the Italian off-trade.  It also enhanced our premium on-trade sales capabilities and tripled the size of our sales force, bringing growth synergies across the off and on-trade for all of our categories, and helping to secure Beam Suntory brands’ distribution.

The acquisition provides a strong platform from which to enhance the provenance of Stock’s Italian brand portfolio and generally rejuvenate our Italian business, starting with the “repatriation” of Limoncè. The acquisition is performing in line with our expectations to be earnings-enhancing in the current year despite the continuing challenging environment in Italy. Additionally, the stronger on-trade sales force resulting from this acquisition was a direct reason for gaining Beam-Suntory as a distribution partner in Italy in April 2020. Coinciding with the peak of COVID-19 in Italy, and requiring some upfront investment, the Beam agency will begin making a positive contribution to our results in 2021.

Other markets

‘Other’ markets include the results of Slovakia, Croatia and Bosnia & Herzegovina together with our export operations know as International, our Baltic distillery and UK corporate office.

Revenue for the year for Other markets was €29.5m (2019: €32.5m), with adjusted EBITDA of €3.4m (2019: €5.2m).


It was a challenging year in Slovakia, but one in which our expansion in rum - led by Božkov Republica -  coupled with a strong performance in vodka by Amundsen, enabled Stock to maintain its position as the second biggest player in the off-trade. Stock’s total spirits value share declined slightly from 12.1% last year to 11.5% this year, and absolute value was -1.6% versus last year12.

Share growth from Fernet Stock, Republica and our leading vodka brands was off-set by COVID-19-driven declines on the Beam Suntory range and Golden fruit spirits, whose categories are more dependent on ‘higher energy’ social gatherings, which were curtailed by the pandemic.

Other International markets

Croatia was severely impacted by COVID-19 given its heavy reliance on tourism and on-trade consumption. Nonetheless, Stock grew its brand leader Stock 84’s share of imported brandy in absolute volume and value13.

In our export markets, COVID-19 had a negative impact on duty-free volumes as a result of reduced international travel, and also led to severe local lockdowns across many locations. The successful reorganisation of our route-to-market in Germany contributed volume uplift from new retail distribution via our partner Dovgan, notably for our Polish brand portfolio. The Distillerie Franciacorta brands acquired in 2019 were successfully introduced into 32 of our International distribution partners including Germany, the Netherlands, and the UK.

6 Nielsen, total Poland, total off trade, total spirits MAT September 2020

7 Nielsen, total Poland, total off trade, total vodka MAT September 2020. For the purposes of this estimate, total vodka = total regular vodka plus total flavoured vodka plus total flavoured vodka based liqueurs

8 IWSR 2019

9 In the Czech Republic the “rum” category of the spirts market includes traditional rum, which is a spirit drink made from sugar cane, and what is widely referred to as “local rum”, known as “Tuzemak” or Tuzemsky”, which is made from sugar beet. As used in this Report, “rum” refers to both traditional and local rum, while “Czech rum” refers to local rum

10 Nielsen MAT to end September 2020, total Czech off-trade

11 Source: IRI total Italy, total modern trade, total spirits, MAT September 2020. Prior year data excludes Beam Suntory

12 Nielsen, total Slovakia, total off trade, total rum, whisky, vodka, fruit spirits, herbal bitters and fruit distillates MAT to end August 2020

13 Nielsen Croatia, total off trade, total brandy MAT September 2020

Chief Financial Officer Statement

Changes in accounting policies

Following adoption of IFRS 16 “Leases” from 1 October 2019, all comparative figures have been restated to comply with the new accounting standard and enable reporting on a like-for-like basis. Full details of the changes are set out in notes 3 and 15 of the consolidated financial statements. One consequence of this change is an improvement in EBITDA, operating profit and EBITDA margin, as certain operating costs associated with leases are now considered financing costs. The overall impact on operating profit is not material.

Underlying results

In the second half of the prior year, the Group completed two acquisitions - Bartida s.r.o. and Bartida Retail

s.r.o. in the Czech Republic, and Distillerie Franciacorta S.p.A. in Italy. In order to provide a comparison of the Group’s results on a like-for-like basis, we also report underlying growth rates for key metrics (that exclude the impact of these acquisitions in both years) and is stated at constant currency.

Financial performance

Performance differed between the two halves of the year.  Our very strong year-on-year growth in the first half of the year was tempered in the second half as the COVID-19 pandemic impacted the on-trade and duty-free channels for several months. In the second-half of the year, underlying volumes, revenues and EBITDA were lower than the comparable period last year. However, the -1.9% underlying revenue decline in the second half of the year indicates that demand significantly shifted to the off-trade channel during this period.

Volumes for the year were up +1.8% on an underlying basis, as a result of continued strong performance in Poland. On a reported basis volumes rose +3.0% helped by the full impact of last year’s two acquisitions. Reported revenue was up +9.1% to €341.0m (2019: €312.4m) and underlying revenue was up +6.9% to €324.5m (2019: €303.6m).

The underlying revenue increase was predominantly driven by pricing (+4.5%), primarily in Poland where the excise tax increase was fully passed on, with a small margin. In Czech, the excise tax increase was only passed on where competition considerations allowed. There was a benefit from the 2019 acquisitions (+3.9%), but a negative impact from foreign currency movements (-1.7%), due to a slight weakening in the Polish złoty and the Czech koruna during the year versus the euro.

Revenue per litre14 increased +6.0% to €2.55 (2019: €2.41) mainly reflecting the mix benefit of last year’s acquisitions, as well as the increased pricing in Poland and Czech following the excise increases. Cost of goods sold per litre14 increased +7.8% to €1.37 (2019: €1.27), mainly due to last year’s acquisitions and an increase in third party distribution brand cost of goods. This mix reduced reported gross profit margin by 90bps to 46.4% (2019: 47.3%). Underlying gross margin was less impacted 47.0% (2019: 47.4%).

Selling expenses increased +8.1% to €65.9m (2019: €61.0m) from a combination of the full year impact of 2019’s acquisitions and increased investment behind our brands and salesforce capabilities. Other operating expenses increased by +6.7% to €33.4m (2019: €31.3m) mainly due to higher staff costs, particularly in Central Europe, plus the increase from the full year impact of 2019’s acquisitions.

Adjusted EBITDA increased by +6.1% to €71.0m (2019: €67.0m) representing an Adjusted EBITDA margin of 20.8% (2019: 21.4%). On an underlying basis, Adjusted EBITDA was up +4.6% at €68.9m (2019: €65.9m), resulting in an underlying Adjusted EBITDA margin of 21.2% (2019: 21.7%).

Operating profit before exceptional items was €57.8m, an increase of +6.0% versus 2019 (€54.5m). Underlying operating profit before exceptional items increased by +3.3% to €57.0m (2019: €55.2m).

Exceptional items

We have had five exceptional items in the year, totalling a net €23.0m (including tax), which were primarily non-cash related.

As reported at the half year, there was a non-cash impairment expense of €14.2m against the carrying value of the investment in our Irish whiskey venture, Quintessential Brands Irish Whiskey Limited (“QBIWL”).The second was a non-cash credit of €1.5m relating to the net overall release in provisions for contingent consideration in respect of past acquisitions. This predominantly related to the investment in QBIWL (€1.8m), as most of the metrics for payment are unlikely to be met as a result of the impact of COVID-19 on sales and the closure of the visitor centre at the Dublin distillery. The third was an expense of €1.3m relating to the write-off of advisory and legal costs incurred in pursuit of the Group’s mergers and acquisitions strategy. Work in this area had to be curtailed as a result of the impact of the COVID-19 pandemic.

Then, in the second half of the year, the carrying value of our traditional Italian brands incurred a non-cash impairment charge of €9.6m, with a related deferred tax credit of €1.1m. This reflected both the considerable impact of the pandemic on the near-term prospects for the Italian market as well as the corresponding increase in discount rates used in the impairment review. Finally, there was also €0.6m in restructuring charges as a result of management changes. Further details are set out in note 6 of the attached Consolidated Financial Statements.

Finance costs

Net finance costs were €3.8m (2019: €4.5m), including €0.5m (2019: €0.6m) of interest payable on lease liabilities following the adoption and implementation of IFRS 16 “Leases”. The underlying decrease was primarily due to the reduction of bank facility-drawings.


The income tax expense for the year was €10.3m and included an exceptional tax credit of €1.1m recognised in respect of the Italian brands impairment charge. The underlying income tax expense (total income tax expense excluding exceptional items) was €11.4m (2019: €10.9m).  As detailed in note 9 of the Consolidated Financial Statements, the income tax expense reflects a number of factors including the tax expense for the current period, changes in provisions for taxation relating to prior years, and movements in deferred tax. The underlying effective tax rate (excluding exceptional and prior year items) of the Group was 22.2% (2019: 25.3%). The underlying decrease is principally due to a greater proportion of taxable profits coming from Poland and Czech, where the tax rates are 19%.

Group tax provisions totalled €3.5m at 30 September 2020, a decrease of €0.8m from 30 September 2019.

The decrease primarily relates to the release of provisions in the Czech Republic in respect of the 2012-2017 tax years, based on the length of time that has elapsed with no challenge or assessments raised by the tax authorities. As set out in the Principal Risks, the Group is exposed to a number of tax risks in the countries in which it operates. There have been a number of developments with respect to the Group’s unsettled tax years in several countries. This includes Poland, where we continued with the appeal process against the €4.5m assessment issued by the Polish tax authorities in respect of our 2013 Corporate Income Tax return and historical tax positions. In February 2020 the administrative court of first instance upheld the assessment and we lodged a final appeal, to the Supreme Administrative Court, in May 2020. In respect of intellectual property restructuring, representing €3.7m of the total assessment, our view remains unchanged and, on the basis of all the available evidence and professional opinions, we consider that the position adopted by the Group will ultimately prevail. Therefore, we continue to recognise a receivable against the assessed taxes which, in accordance with the local requirements, have been paid in full to the tax authorities to facilitate the appeal. No receivable has been recognised in respect of the remaining €0.8m relating to the deductibility of the intra-group management recharges. Audits have also commenced during the year into aspects of the 2014 and 2015 tax years, but we have yet to receive any assessments. Further details are set out in note 9 of the Consolidated Financial Statements.

Earnings per share

The basic earnings per share for the year was 9.83 €cents per share (2019: 14.33 €cents per share). Adjusted basic earnings per share, removing the impact of exceptional items, was 21.42 €cents per share (2019: 19.75 €cents per share).

Cash flow and working capital

The Group continues to generate strong cash flow from operating activities. Using a measure by which we judge our underlying operational cash flow, the Group generated free cash flow of €79.6m (2019: €61.3m). This represents a strong conversion rate from Adjusted EBITDA of 112.1% (2019: 91.5%), and reflects an increased focus on managing working capital levels during the pandemic, particularly Trade Receivables.

The Lublin distillery project has been initiated, with planning work and permit applications underway. Capital expenditure on the project during the year has been minimal. The plant is expected to be operational by the end of 2022. The Italian bottling plant project is at an earlier stage of planning. The OneSAP project is around its mid-way stage, and it has proceeded largely to plan notwithstanding the pandemic. The new standardised technology platform is expected to be operational during the first half of the year-ending 30 September 2022.

Dividend and reserves

The Board has proposed a final dividend to shareholders which represents a step-up interpretation of our progressive dividend policy. The Board proposes a final dividend of 6.78 €cents per share (2019: €6.31€cents per share), an increase of +7.4%. When combined with the interim dividend of 2.77 €cents per share paid in June 2020 (2.63 €cents interim dividend paid in June 2019), this totals 9.55 €cents per share for the year (2019: 8.94 €cents per share), an increase of +6.8% on the prior year total.

Given that we have not been able to complete any meaningful M&A projects in the year due to the disruption resulting from COVID-19, and the ongoing pandemic means that we are unlikely to complete a meaningful acquisition in the near-term, the Board has proposed an additional special dividend of 11.00 €cents per share payable alongside the final dividend.

Net debt and maturity profile

The Group’s Revolving Credit Facility (“RCF”), which was taken out in 2015, expires in November 2022. Debt can be drawn and repaid at the Group’s discretion without penalty or charge. At 30 September 2020, €14.0m of the RCF is utilised to back excise duty guarantees in Italy and Germany. We also retain a factoring facility capability of €70.0m, which remains unused.

The continued strong cash flow during the year resulted in Net Debt (now including IFRS 16 adjustments) of €22.7m at 30 September 2020, a decrease of €32.8m from 30 September 2019. Leverage has also reduced from 0.83x (as at 30 September 2019) to 0.32x reflecting the significantly increased Adjusted EBITDA and reduced borrowings.

Our financing facility covenants are: Net Debt/EBITDA 3.5x maximum and interest cover 4.0x minimum. We currently operate, and expect to remain, comfortably within these levels and to retain significant unused bank facilities. Our relatively low leverage, combined with the significant headroom in our bank facilities, leaves us well-placed to finance our strategic aspirations.

Foreign exchange

The Group remains exposed to the impact of foreign currency exchange movements, with the major trading currencies continuing to be the Polish złoty and the Czech koruna. At 30 September 2020, there were no formal hedging instruments in place.

A net foreign currency exchange transactional loss of €0.6m was reported within the Adjusted EBITDA for the year. This has arisen on the weakening of the Polish złoty and the Czech koruna versus the Euro.


As reported previously, the Group does not expect a material impact from the UK’s forthcoming exit from the European Union irrespective of the nature of the final arrangement with the EU. As the Group reports in euros and the main trading currencies are the Polish złoty and the Czech koruna, the volatility of pound sterling is not a material factor for our operations. Nevertheless, the implications of Brexit will continue to be monitored as will all the principal risks that the Group faces.

Equity structure

There has been no change to the equity structure of the business in the year to 30 September 2020. The issued share capital remains at 200 million Ordinary shares with a nominal value of £0.10 each.

Directors' responsibility statement

Each of the Directors, whose names and functions are listed below, confirms that:

To the best of their knowledge, the consolidated financial statements and the Company financial statements, which have been prepared in accordance with IFRS as issued by the IASB and IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company on a consolidated and individual basis; and to the best of their knowledge, the announcement includes a fair summary of the development and performance of the business and the position of the Company on a consolidated and individual basis, together with a description of the principal risks and uncertainties that it faces.


David Maloney, Non-Executive Chairman

Mirek Stachowicz, Chief Executive Officer

Paul Bal, Chief Financial Officer

John Nicolson, Senior Independent Non-Executive Director

Mike Butterworth, Independent Non-Executive Director

Tomasz Blawat, Independent Non-Executive Director

Diego Bevilacqua, Independent Non-Executive Director

Kate Allum, Independent Non-Executive Director

14 Revenue and cost of goods per litre is calculated by dividing the total Group revenue or cost of goods by the number of litres sold


Download the full Preliminary Results statement (PDF 1.09MB)

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