Hawesko Holding (HAW) Q4 2022 earnings summary

Executive summary

• Sales were €671.5m in FY2022, down 1.3% YoY; EBIT fell 26.4% to €39.1m as inflation-driven costs and normalising post-pandemic demand pressured profitability.

• The diversified e-commerce, Retail and B2B model helped sustain sales in a contracting wine market; market share increased in Germany.

• Consolidated net income was €26.2m, versus €34.3m in 2021; reported EPS was €2.85, down from €3.74.

Financial highlights

• Revenue was €671.5m versus €680.5m; excluding the Global Wines & Spirits acquisition, sales fell 3.5% to €656.4m.

• Gross profit was €293.7m and gross margin 43.7%, down 0.5 percentage points YoY; EBITDA was €61.8m versus €75.2m.

• EBIT was €39.1m versus €53.1m; EBIT margin was 5.8% versus 7.8%, below the 6.0%–7.0% forecast range.

• Free cash flow was €16.6m versus €37.3m, below the €18m–€22m forecast; operating cash flow declined to €36.8m from €49.0m.

• Net income attributable to shareholders was €25.6m versus €33.6m; reported EPS was €2.85 versus €3.74.

Outlook and guidance

• FY2023 sales are forecast to change by +2% to -3% YoY; EBIT before possible restructuring costs is expected at €37m–€42m.

• FY2023 free cash flow guidance is €18m–€22m and ROCE guidance is 14%–18%.

• Inflation and restrained consumer spending are expected to persist; e-commerce sales and EBIT margin are forecast to decline slightly, while Retail and B2B sales and margins are expected to improve slightly.

• Profitability measures in 2023 are expected to reduce EBIT at affected businesses by a mid-single-digit million-euro amount; the first quarter is expected to see the sharper earnings decline.

• A long-term target remains ROCE of at least 14%; management will shift from EBIT margin to absolute EBIT as its profitability measure from FY2023.