Zwack Unicum

Quarterly Report • Jul 30, 2009

News Details

Advance Financial Reports | 30 July 2009 07:53

Zwack Unicum Nyrt.: Interim report according to Tpt. 54. § (7).

Advance notification: Zwack Unicum Nyrt..
Interim report

30 Jul 2009

Interim report according to Tpt. 54. § (7) with the objective of Europe-wide distribution.
The issuer is solely responsible for the content of this announcement.

Interim Management Report
on the results of the
Zwack Unicum Plc.
during the first quarter of the 2009-2010 business year

The Board of the Directors of the Zwack Unicum Plc. has approved the
Management’s report about the results of the Company during the first q
uarter of the 2009-2010 business year.

This business report refers only to the data of the international
accounting standards so that it can be compared with the previous reports.

Total gross sales of the Company stood at HUF 6,669 million, 0.61% lower
than in the corresponding period of the previous business year. The net
sales of the Company were HUF 4,212 million, 0.48% lower than those at the
same time a year before.
Export earnings amounted to HUF 304 million, 5.4% lower than the export
performance of the corresponding period of the previous business year.

The Company’s profit before taxation according to the International F
inancial Reporting Standards (IFRS) stood at HUF 1,005 million, which was
by 2.47% lower than in the corresponding period of the previous business
year (HUF 1,030 million) but considerably higher than the plans on a time
proportionate basis.

Due to the amendment of the IFRS standards, the Company diverted from
previous practice on several occasions when drafting this Interim
Management Report about the first quarter. The changes are as follows:
– Until now the commercial services granted to us by trade debtors (as for
instance, secondary placements and appearance in leaflets) were posted
under the heading of “Other operating expenses”. From now on those items re
duce the sales revenue. Consequently, the figures both on the sales revenue
and the other operating expenses lines are lower than before.
– Until now the material costs of marketing character were posted on the l
ine of material costs. From now on they are posted alongside the other
expenditures of marketing character on the line of “Other operating e
xpenses”.
In the Profit and Loss Account both the data for the corresponding period
of the previous business year and the data for this quarter are presented
in compliance with the new arrangement. The above mentioned
reclassification has no impact on profit from operations.

The data (either those calculated according to the IFRS standards or those
of the Hungarian accounting rules) are not audited.

Within domestic sales, the turnover of self-manufactured products was 2.8%
lower than in the corresponding period a year before. The domestic sales of
premium and non-branded products decreased by 4% each, while those of the
quality products increased by 6%.
Earnings from products the Company distributed increased by 14%. The sales
of products of the Diageo portfolio grew dynamically, by 20%, while the
turnover of the Wine Division and other imported products went down. In the
case of products of Diageo, the outstanding increase in sales was the
result of several extremely successful retail promotions.

Overall, the domestic sales were higher in the first quarter than what the
Company expected. However, the increase in the excise tax as of July 1
played an important role in that result, as it prompted many of our retail
and wholesale partners to make their purchases earlier than in previous
years. As a consequence, a considerable decrease in sales is predicted for
the second quarter.

The costs of materials went up by more than 7%. The increase was due in
part to a change in the product mix (the weight of products with a high
COGS that the Company distributes has grown) and in part imports were more
expensive because the local currency (the forint) became weaker. Moreover,
the cost of the production of Unicum – whose packaging has undergone a c
onsiderable qualitative change – has also increased. As a consequence of t
hose factors, the gross margin decreased by nearly 5%.

Payroll expenditure decreased by 4.43% because staff cuts in April made
savings possible.

The revaluation of forward deals that matured during this business year
increased the sum of the other operating expenditure by HUF 312 million.
(At the end of the previous business year those transactions resulted in
accounting earnings at HUF 290 million.) However, as compared to the
corresponding period of the previous business year, the Company reduced its
marketing and other operating costs – which are posted on that line – by HU
F 364 million. Savings were realized on every related field (marketing,
logistics, consulting, etc.), and additionally by fulfilling some
activities with our own staff the company could entirely eliminate certain
costs. As a result of those two developments of contradictory effect, the
other operating expenditure eventually went down by nearly 5% (HUF 52
million).

The other operating income increased because brand owners reimbursement of
marketing expenditures went up.

The financial result of the Company was half of that in the corresponding
period of the previous business year because in February 2009 the Company
paid out more than HUF 2.6 billion interim dividend. The sum of the
financial result is as predicted by the Company. The above-mentioned
distribution of the interim dividend also explains the decrease in the
stock of securities and cash.

The trade and other receivables increased by HUF 816 million (16.06%) due
chiefly to the above-mentioned higher sales turnover in June 2009.

The retained earnings from previous years decreased because the Company
could distribute a total of HUF 4.68 billion in dividend by using both the
balance sheet net profit figure of the previous business year and retained
earnings from previous years.

The non-current liabilities consists of financial leasing liability (which
refer to specific manufacturing tools) and the liabilities related to
redeemable liquidation preference shares. Liabilities related to the new
bottles of Unicum and Unicum Next account for a considerable part of the
total increase in HUF 73 million (nearly 70%). Since June those two
products have been supplied to the market in the new packaging being much
more effective now.

In the course of the first quarter the Zwack Unicum Plc. spent HUF 162
million on fixed assets. The investments were primarily of a supplementary
character and were in compliance with the plans.

The Company has 276 employees (at the end of the 2008/2009 business year it
was 291. In the corresponding period of the previous business year the
figure stood at 296.)

This report has been made according to the relevant accounting regulations
and the financial statements made on the basis of our best knowledge and
they are in accordance with both the Hungarian and the international
standards: it gives a real and reliable picture about the assets,
liabilities, financial situation and profit of Zwack Unicum Plc. This
business report gives a reliable picture about the Company’s situation, d
evelopment and performance and it includes the major risks and factors of
uncertainties.

Additional information:
– There was no change in the ownership structure of the Company.
– At the end of the previous business year (26 March 2009) the Company a
nnounced organizational and personnel changes as follows:
– The Company established a Production and Technical Directorate as of 1 A
pril 2009. The following units belong to the new directorate: the plant at
Dunaharaszti, the plant in Kecskemét, the Unicum plant, the Technical
Office, the Central Laboratory, and the Product Development Unit. László S
eprős, Production and Technical Director, heads the new directorate.
– As of 3 April 2009, the Export Directorate ceased operation through r
eorganization. Since 4 April 2009, export activity has come under the
direct supervision of the Sales Directorate, and personally the Sales
Director. The job of Export Director Balázs Vass was terminated as of 4
April 2009.
 The Company does not possess shares of its own, just as before.

29 July 2009
On behalf of the Board of Directors
of the Zwack Unicum Plc.

Sándor Zwack Frank Odzuck
Chairman General Manager

Financial Statements

PK3. Balance Sheet (according to IFRS)
Data in million HUF

30.06.2008 30.06.2009 Variance %
ASSETS
Non-current assets
Tangible assets 4 035 4 311 275 6,82%
Intangible assets 142 137 -5 -3,45%
Returnable packaging mat.69 54 -15 -21,74%
Available-for-sale 18 18 0 0,00%financial assets
Non-current receivables 33 43 10 29,52%
Deferred tax asset 136 199 63 45,91%
4 434 4 762 328 7,39%

Current assets
Inventories 2 480 2 492 12 0,47%
Trade and other rec. 5 080 5 896 816 16,06%
Securities 301 0 -301 -100,00%
Liquid assets 5 115 3 112 -2 003 -39,16%
12 977 11 500 -1 477 -11,38%

TOTAL ASSETS 17 411 16 262 -1 149 -6,60%

Shareholders' equity
Share capital 2 000 2 000 0 0,00%
Share premium 165 165 0 0,00%
Retained earnings 9 045 7 417 -1 628 -18,00%
11 209 9 581 -1 628 -14,53%

Liabilities
Non-current liabilities
Other liabilities 105 178 73 69,66%
Provisions for other 11 3 -8 -76,22%liabilities and charges
Non-current liabilities 116 181 65 56,15%

Current liabilities
Trade and other liab. 6 021 6 383 362 6,00%
Borrowings 0 0 0
Provisions for other 65 118 53 81,85%liabilities and charges
6 086 6 501 415 6,81%

Total liabilities 6 202 6 681 479 7,73%

TOTAL EQUITY & LIABILITIES 17 411 16 262 -1 149 -6,60%

PK4. Profit & Loss Statement (according to IFRS)

Data in million HUF

2008-2009. 2009-2010. Variance %
I. quarter I. quarter
Gross Sales 6 710 6 669 -41 -0,61%
Excise Tax 2 478 2 457 -21 -0,84%
Sales net of excise tax 4 232 4 212 -20 -0,48%

Material costs 1 552 1 665 113 7,26%

Gross Margin 2 680 2 547 -133 -4,95%
63,32% 60,47%

Employee benefits expense 661 631 -29 -4,43%
Depreciation and 176 174 -2 -0,93%amortisation expense
Other operating expenses 1 099 1 047 -52 -4,73%
Total operating expenses 1 935 1 852 -83 -4,28%

Other operating income 182 258 75 41,24%

Profit from operations 927 952 25 2,74%

Interest income 104 53 -51 -49,09%
Interest expense and 0 0 0 48,72%other
similar charges
Net financial income 103 53 -51 -49,12%

Profit before tax 1 030 1 005 -25 -2,47%
Tax (corporate, 270 264 -6 -2,06%solidarity and local
industrial)
Profit after tax 760 740 -20 -2,62%

PK4/1 Segment report (according to IFRS)

Data in million HUF

Traded products 2008-2009 2009-2010 Variance %

Gross Sales 792 929 137 17,24%
Excise Tax 158 207 49 30,70%
Sales net of excise tax 634 721 88 13,88%
Segment(operating)profit 22 31 9 42,05%

Own produced 2008-2009 2009-2010 Variance %

Gross Sales 5 918 5 740 (178) -3,00%
Excise Tax 2 319 2 250 (70) -3,00%
Sales net of excise tax 3 598 3 490 (108) -3,00%
Segment(operating)profit 905 921 16 1,78%

Total 2008-2009 2009-2010 Variance %

Gross Sales 6 710 6 669 (41) -0,61%
Excise Tax 2 478 2 457 (21) -0,84%
Sales net of excise tax 4 232 4 212 (20) -0,48%
Profit from operations 927 952 25 2,74%

PK5. Cash-flow (according to IFRS)
Data in mill. HUF

Cash-Flow 2009-2010. I. quarter

Operating income 952
Depreciation and amortisation 174
(Gain) / loss on sale of fixed assets (3)
Increase(decrease) in trade creditors 378
(Increase)decrease in inventories (75)
(Increase)decrease in trade and other receivables (809)
Other changes (169)
Cash generated from operations 449

Interest paid (0)
Tax paid (290)
Cash inflow from operating activities 158

Capital expenditures (162)
Sales (purchase) of investments 0
Dividends received 0
Interest received 53
Proceeds from sale of fixed assets 14
Cash outflow from investing activities (96)

Dividends paid (0)
Cash outflow from financing activities (0)

Change in cash and cash equivalents 62
Cash and cash equivalents, beginning of the period 3 050

Cash and cash equivalents, end of the period 3 112

Consists of:
Overdraft 0
Cash in banks and on hand 3 112

Balance end of the period 3 112

PK3. Balance Sheet (according to Hungarian Accounting Standards)

Data in thousand HUF

30.06.2008 30.06.2009 Variance %
Non-current assets 4 574 978 4 830 822 255 844 5,6%
Intangible assets 130 048 118 185 -11 863 -9,1%
Tangible assets 4 378 800 4 625 045 246 245 5,6%
Financial investment 66 130 87 591 21 461 32,5%
Current assets 13 566 261 12 139 723 -1 426 538 -10,5%
Inventories 2 616 884 2 646 605 29 721 1,1%
Receivables 5 533 960 6 380 751 846 791 15,3%
Securities 299 994 0 -299 994 -100,0%
Liquid assets 5 115 423 3 112 367 -2 003 056 -39,2%
Prepayments 164 605 180 015 15 411 9,4%
TOTAL ASSETS 18 305 843 17 150 560 -1 155 283 -6,3%

Shareholders' equity 12 054 545 10 461 198 -1 593 347 -13,2%
Share capital 2 008 750 2 035 000 26 250 1,3%
Share premium 264 044 264 044 0 0,0%
Retained earnings 8 977 459 7 171 126 -1 806 333 -20,1%
Profit for balance sheet 804 292 991 027 186 736 23,2%
Provisions 75 482 120 341 44 859 59,4%
Liabilities 5 908 476 6 313 049 404 573 6,8%
Subordinated liabilities 0 0 0
Long term liabilities 0 0 0
Short term liabilities 5 908 476 6 313 049 404 573 6,8%
Accrued expenses and 267 340 255 971 -11 368 -4,3%deferred income
TOTAL EQUITY & LIAB. 18 305 843 17 150 560 -1 155 283 -6,3%

PK4 Profit & Loss Statement (according to Hungarian Accounting Standards)
Data in thousand HUF

2008-2009. 2009-2010. Variance %
I. quarter I. quarter
Net sales revenues 7 585 246 7 663 872 78 627 1,0%
Capitalised value of 115 511 -14 804 -130 315 -112,8%own performance
Other revenues 79 726 244 991 165 266 207,3%
Material type expend. 3 105 102 2 786 791 -318 311 -10,3%
Payments to personnel 705 704 792 444 86 740 12,3%
Depreciation charge 157 716 168 191 10 475 6,6%
Other expenditures 2 825 584 2 922 271 96 687 3,4%
TRADING PROFIT 986 376 1 224 362 237 986 24,1%
Revenues from financial 123 997 98 816 -25 180 -20,3%transactions
Expenditures of financial 110 678 128 266 17 589 15,9%transactions
FINANCIAL PROFIT 13 319 -29 450 -42 769 -321,1%
PROFIT ON ORDINARY BUSINESS 999 695 1 194 912 195 217 19,5%
PROFOT / (LOSS) ON 1 679 -2 903 -4 582 -273,0%EXTRAORDINARY ITEMS
PROFIT BEFORE TAXATION 1 001 374 1 192 009 190 635 19,0%
Tax liability 197 082 200 981 3 899 2,0%
PROFIT AFTER TAX 804 292 991 027 186 736 23,2%

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