Earnings Report /
Russia

Beluga Group: (U/R) – 2021 IFRS results – NEUTRAL

  • BELUGA GROUP reported its 2021 IFRS financials, with both the revenue and EBITDA performance in line with our estimates

  • 2021 net revenue came in at RUB74.9bn, 18% higher y/y, in line with our estimate

  • 2021 EBITDA came at RUB10.5bn (+14% y/y), 1% above our expectations, implying 14% margin (-0.5pp y/y)

Evgeniy Kipnis
Evgeniy Kipnis

Senior Banking/Consumer Analyst

Olesya Vorobyeva
Olesya Vorobyeva

Analyst, TMT, Agro and Retail

Alfa
28 March 2022
Published by

BELUGA GROUP (BELU RX: U/R) reported its 2021 IFRS financials, with both the revenue and EBITDA performance in line with our estimates. Net revenue grew 18% y/y, supported by a favorable product mix, strong Beluga export sales and sales growth in the WineLab stores. EBITDA grew 14% y/y, suggesting reinvestment of the profitability gains from the premium sales mix into WineLab chain expansion. The company as expected did not provide 2022 guidance and no dividend decision was announced.

Looking ahead to 2022, we think export sales might come under pressure (~ 5-6% of total revenues and 12-13% of EBITDA, we estimate) with exports to the US ( ~10-15% of total exports) under the main threat given the restrictions put in place. Imported products distribution (~25% of revenues) might suffer from logistics disruptions, though the company might have enough inventories to secure sales for at least six months. On a positive note, there might be increasing demand for domestic brands (BELUGA’s own production) as its pricing is likely to stay more favorable for consumers vs imported brands amid ruble devaluation. Still, we would expect BELUGA GROUP to raise prices on its own production by at least 10% on average, which should support profitability for 2022F amid only 4% excise tax growth stated for this year, we think.

2021 net revenue came in at RUB74.9bn, 18% higher y/y, in line with our estimate. That was driven by 1) 0.6% y/y sales volumes growth; while 2) the product mix was more favorable (significant growth in premium products, while Beluga vodka export sales grew 104.5% y/y, according to the company); 3) 31.9% y/y WineLab sales growth (14.8% y/y LfL sales with 55% y/y growth in the number of stores).

2021 EBITDA came at RUB10.5bn (+14% y/y), 1% above our expectations, implying 14% margin (-0.5pp y/y). The EBITDA growth slower than revenue growth is a result of accelerating increase in expenses amid dynamic growth of WineLab stores: distribution costs and G&A costs grew +18% and +35% y/y, respectively, while gross margin was flat y/y. Segment-wise both retail and alcohol EBITDA grew 19% y/y each, while retail EBITDA margin declined 1.1pp y/y vs alcohol margin slightly 0.3pp higher y/y.

2021 net income of RUB3.9bn (+57% y/y), 12% higher than we had expected. That is driven by the same factors as EBITDA, as well as 37% lower y/y net finance costs (incl. FX gains/losses).

Figure 1: BELUGA GROUP 2021 IFRS highlights

Source: Company data, Alfa-Bank