Poland rebound boosts Stock Spirits full-year results

4th December, 2019 by Amy Hopkins

Stock Spirits Group will invest €25 million (US$27.6m) in growing its distillation capacity in Poland after announcing its full-year profit more than doubled.

Stock Spirits demonstrated “strategic progress” in its 2019 fiscal year

In the 12 months to September 2019, the group’s profit increased by 107.8% to €28.3m (US$31.3m), while reported revenue increased by 9.2% to €312.4m (US$345.8m). Stock Spirits described the year as showing “good operational and strategic progress”, driven by a “turnaround” in Poland and growth in Czech Republic.

In Poland, where the group previously experienced significant difficulties, Stock Spirits has delivered 29 months of consecutive growth. In its 2019 fiscal year, the firm saw reported revenue for Poland grow by 14% to €171.7m (US$190m).

Poland is Stock Spirits’ largest market and it is the world’s third largest vodka market by value. During 2019, the country’s economy strengthened, disposable incomes rose and unemployment fell – which Stock Spirits said increased consumer confidence and purchasing power.

The vodka category in Poland grew in terms of both value and volume, according to the company. Flavoured vodka witnessed the fastest growth by value, but the “far larger” clear vodka category returned to value growth. Premium vodka recorded double-digit value and volume growth, however the ‘economy segment’ continued to decline due to pricing competition.

Poland is set to introduce a 10% increase on alcohol excise tax next year, but Stock Spirits has expressed “confidence” in its “ability to mitigate any impact”. The group will spend €25m (US$27.6m) to increase its distillation capacity in Poland, which will be completed in three years’ time.

In Czech Republic, Stock Spirits’ second largest market, underlying revenue increased by 10% to €81.3m (US$90m). Similar to Poland, the group has benefited from favourable macroeconomic conditions and the growing success of its rum brands.

Czech Republic is also set to ramp up alcohol excise taxes, this time by 13%, but Stock Spirits said it has “implemented actions to manage the proposed change”.

The group reported a mixed performance in Italy, with an increase in revenue but loss of volume and value share in the off-trade. In Slovakia, Bosnia, Croatia, and Bosnia and Herzegovina, revenue increased.

Continued progress

“We have delivered a year of good growth as our successful strategy of premiumisation continues to make progress,” said Mirek Stachowicz, CEO of Stock Spirits.

“The turnaround of our Polish business is complete, and we have now delivered 29 consecutive months of year-on-year volume share growth in that market. We have also strengthened our leadership position in the Czech Republic, taking market share in volume and value.”

Stachowicz also said his company will “continue to assess a range of M&A opportunities” following a number of acquisitions this year.

In January, the firmed snapped up Italian grappa producer Distillerie Franciacorta for €23.5m (US$26m), while in May, it bought Czech Republic on-trade spirits business Bartida. In 2017, Stock Spirits acquired a 25% stake in Quintessential Brands’ Dublin Liberties Distillery.

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