Purcari Wineries (WINE) Q3 2024 earnings summary

Executive summary

• Group revenues reached RON 262 million for 9M 2024, up 4% year-over-year, with core wine revenues growing 14% due to the discontinuation of Ecosmart.

• Gross margin improved to 47% (up 6 percentage points year-over-year), and EBITDA margin rose to 33% (up 4 percentage points), reflecting strong operational performance.

• Net profit margin stood at 17%, flat year-over-year, with net profit for 9M 2024 at RON 43.4 million, mainly impacted by FX and taxation.

• CEO succession confirmed for January 2025; Board of the Year award received; 2027 strategy launched to double key metrics and reach RON 200+ million EBITDA.

• Premium brands led growth, with strong performance across Romania, Bulgaria, Czech Republic, Slovakia, and expansion into new markets.

Financial highlights

• Gross profit reached RON 123.2 million for 9M 2024, up 19% year-over-year, driven by pricing, product mix, and COGS optimization.

• EBITDA for 9M 2024 was RON 85.9 million, up 19% year-over-year, with margin at 33%.

• Marketing and selling expenses increased 25% year-over-year, mainly due to higher trade investments, payroll, and logistics costs.

• Net profit for 9M 2024 was RON 43.4 million, down 1% year-over-year, with a margin of 17%.

• Net debt-to-EBITDA at 1.27x–1.7x, within the target maximum of 2x.

Outlook and guidance

• Q4 is expected to contribute 33–40% of annual revenues, with efforts focused on meeting 5–10% revenue growth guidance for 2024.

• Premium product sales and price increases in Romania are expected to support both revenue and margin.

• Guidance for EBITDA and net income margins maintained, with seasonality and promotional intensity as key variables.

• Ambition to double key financial metrics by 2027, targeting RON 200 million EBITDA, 50%+ gross margin, and RON 630 million revenues.

• Robust inventories from previous vintages support 2025 growth plans despite reduced grape harvests.