Welcome to everybody. Presentation First Half of 2026 by Italian Wine Brands. Alessandro Mutinelli speaking. With me, Gabriella Fabotti, CFO and Investor Relator of the group. Today, the focus will be on business numbers, first half of 2026, the awards of 2026, and the key numbers. Point number two, how the market has moved in the period. Then point number three, focus on the numbers. Point number four, an overview on the market and what's next, and conclusion, and Q&A session.
Good morning, everybody. If no one is against, we are also recording the conference to publish it as requested by some investors.
If there is nothing against, we will register, record this presentation. These are the key numbers. It will be at a glance, total turnover in the first half, EUR 175 million, 83% export, 97 destinations around the world, +7 countries being in the last 12 months. 72.8 million bottles sold. For the first year, we received the Best Producer of Italy, Mundus Vini, most prestigious wine challenge in Germany. On top of the Best Producer of Italian Still Wine by Berliner Wein Trophy. As you probably know, we keep a very flexible business model to focus on cash generation, maximizing cash generation. We will see then the numbers afterwards. Main results in the first half of the year that, I must admit, was very challenging.
You can see then in a chart prepared by Gabriella, how the wine market has moved during the first part of the year. Considering that we pointed out that Top Brands of the group, the strategy is having success. We were able to increase the volume of Top Brands by 8.6% in volumes and 6.6% in revenues. Increasing also the direct margin on those wine categories up to 50.3% compared to 49.6% in the first half of 2025. In terms of quality, 2026, we were able to enter into Italy grocery distribution. We got three new listings in very important chains that will start at the end of this year to receive our products. We launched the Tenuta Le Forconate brand, which is the Top Brand, highest level of positioning of our range, both in the national wine market and abroad.
In the U.S., which first part of the year was very challenging due to the counter numbers of last year on the first six months before entering the tariffs in the U.S. To our main brands, VOGA Italia and Gemma di Luna, we have done a restyling, a complete restyling of the range and launch at the middle of this year in the United States. There is a part on investment in post fluctuation that will enhance our efficiency in production. Go back to the numbers. I am sorry, there is still a part which is not numbers, but it has to do with the premiumization that we are following and for the supports of our Top Brands. You see here several awards that has been achieved by our company in the first half of this year.
I must admit, we were working on these awards for a long period of time. I must admit that this year we are reaching very high results among the Italian producer. You see here are some examples of international awards about our products. Probably the most important one is the Best Producer of Italy by Mundus Vini, achieved a couple of months ago. Okay.
This is number trends. As you see, there is a decrease in revenues. Half of this decrease is due to the B2C business that in any case realized to stop its negative trend in term of EBITDA margin. So we have a new organization in place with a small but positive improvement. The other part of revenue decrease is due to price decrease that we are able to recover in term of cost of raw material. What concerns the volume, there is a slide in the presentation. We are able to maintain the position in the large trade retail, so it is very important because it is the most important part of our business. Despite the market trend, as explained by Alessandro, we are able to maintain our position.
In term of EBITDA, there is a decrease compared to last year, due to the fact that reduced volume realize a lower margin. We are working to improve our result, at least in term of net result, by the end of the year, and we are to publish an outlook as anticipated in the press release just published. For what concern the net result, it is due to the fact that the EBITDA is negative, and in addition, we have some small negative non-recurring item, like the tax that are not as positive as last year. In fact, in 2025, we benefit from reduced corporate tax that is no more in place, so was low just for 2025. We have some exchange rate differences.
Looking at the market cap, despite our analyst went on with a positive outlook on the company, the average target price from the consensus is [EUR 72]. The trend of the company is negative. The positive fact is that we remain and we maintain the highest advanced position in Europe compared to peers that are bigger than us in terms of revenues like AB InBev. The valuation is not satisfactory, but we confirm that in our opinion, there is a good possibility of improvement. Also considering that the cash generation is stable in the historical range of 50%- 55% out of the EBITDA.
We are aware that we have to work to the main KPI of our business on Top Brands growth, that in this first half is confirmed, and reduced leverage that give us the possibility to exploit the opportunities on the market in term of M&A. On the side of risk, we are aware that the wine sector is subject to export pressure during this period, mostly about the U.S. market that is the most important wine market. We also suffer from the not adequate value recognized, the small cap, and the high volatility, but we remain positive about the future. The governance, as you know, is stable and the main entrepreneur of the original company are still part not only of the board, but maintain a substantial control of the group. Going to the result and the financial achievement.
Again, revenues, - 5.3% compared to last year, but we are performing better than the market. We have a slide about that. Again, we maintain our position mostly in term of volume. EBITDA is reduced because of reduced volume, but we maintain the level of profitability at least as just mentioned. The adjusted result is more or less in line with last year. Again, the most important part of our recent equity story is the cash generation. We are going on in generating cash. In this first half, we are able to sustain the supplier, in particular the wine supplier that are suffering from the market condition. This let us improve the possibility to reduce the cost, in particular of bottle wine. The leverage is again below 2.
In this first part of the year, the most important result in term of profitability and future perspective is the restart of Top Brand revenues increase. Top Brand represent an important part of our B2B business. They represent about 30% of the margin of the B2B business, and they are increasing their direct margin. The direct margin of Top Brand went up to 50.3%, and this, again, something that, for us, is important for the future. We are investing on that. Services cost increased because we are investing in marketing, and the target for us is going on improving the mix and improving the margin of our business to guarantee a future EBITDA growth. This is also sustained by the award as represented in the first part of the presentation. This is the market. The market performance in the first half of the year.
The source is Unione Italiana Vini Wine Observatory. As you can see, the total export market went down 6.2%. The revenues of the group, despite the 5% decrease, is better than what realized by the market. We maintain a position in term of volume, and we are performing a little better than market, in particular in U.S. that went down 14%. This is the split of revenues in term of channel. As anticipated, the wholesale, that is the most important part of the business, is stable in term of volume. We didn't lose bottles number on the shelf. This is again important for a future recovery of the business. We entered three additional retailer, and we started to promote Giordano Vini brand in the large chains in Italy.
This is a brand that is suffering in the B2C, but the brand awareness is very, very high also compared to most regulated competitor. We are confident that this launch will help the market penetration of the group in Italy. Distance selling is reducing its revenue, but, as we are to show, we started a new reorganization of the business, try to concentrate the marketing activity on the website channel. This reduction in mail and teleselling business let us reduce marketing cost more than the impact of revenues decrease. So very small, but at least a stop-loss at the level of EBITDA adjusted in the business unit. The HORECA decrease revenues mostly for U.S. market condition. The tariffs were introduced last year, but this year is the first period in which the U.S. consumer see the impact of the U.S. tariff in its portfolio.
It's something that, in addition to the war, give a not positive situation in export to U.S. And U.K., that increased a lot during the last year and went back to previous year revenues. Again, the positive news is that the strategy of the group to increase the position in Italian market is going well, and the revenues in Italian market up 43%. We assume that is to be improved because we are focusing on HORECA market with the launch, presented last week, of the Borga. That is one of our Top Brands with a very well reputation in U.S. and U.K. that has been presented at the Top Brands for the reinforcement of our position in the HORECA channel.
The overall picture is that we lose EUR 4 million in distance selling, and the part of B2B is explained by EUR 3.4 million lower prices and EUR 2 million due to lower volume, mostly in the B2C. This slide compare the revenues by area and the revenues by channel first half 2025 and first half 2026. Italy and Europe show a good trend in Italy, HORECA and in-store sales, and a positive trend in some important market like France, driven by Prosecco increasing. Moreover, we went on increasing our position in East Europe and other market. Historically, this is an important area for us. In Russia, the situation is stable, but we are increasing the position in all the other market. For example, Ukraine, where revenues are sharply increasing compared to last year. In U.S., we have maintained limited exposure to U.S. business.
In this area, the revenues decreased 15%, but we are increasing the revenue in South America, Brazil in particular. We think that with the EU–Mercosur Partnership Agreement , we will able to again improve the revenues in the near future. Another good news in Americas is coming from Canada, that is in part balancing the impact of U.S. Starting from the tariff, we have the opportunity to improve our revenues in Canada. Alchymia, that is an important driving Top Brands in the area of Barbanera, Duca di Saragnano, reached the number one position as a Italian wine in Canada.
Yes. Maybe, Gabriella, I can tell something more about this. Alchymia is a top product under the brand Barbanera. Canada is a very important market for that kind of products. Reaching number one among Italian wines is extremely important award. On top of that, I got this information yesterday evening, is overall in the category wine, is number three among all the wines and very close to number two. So important achievement for our group.
For what concern the distance selling, again despite that direct mailing maintain a big portion of our business, it is decreasing and we are pushing on concentrate the activity on the digital channels that does reach a higher number of people with lower expenses, even if we are aware that this channel is more competitive than the other one. But reducing that mailing will reduce the expenses in the contact. So we are improving the result of the division. In term of EBITDA margin, unfortunately, we lose quite one point. This is due to volume, but we are working on that. We have also considered that the investment that we present at the beginning of the presentation implied a stop to production activity in the first part of the year in January. But now with the new technology, we are able to improve the productivity of the plant.
We assume that this will go on in the second half of the year and we will obtain at least 1 million additional efficiency in the production cost in the second half compared to the first half. In term of cost structure, our supply department, purchasing department, went on in improving the condition. So glass cost reduction went on a single digit, but something that does improve the profitability of the business and to help to sustain the price reduction required by main customer. Wine is stable for what concern the main reference Prosecco, but we were able to obtain better condition in the other reference. So despite price decrease, we are able to go on in dry and wine cost reduction to sustain the margin of the product.
We reduce the service cost, of course, partly due to volume. In terms of B2C, we are able to reduce the cost of marketing due to main business reduction. The transport are stable. That is an important result given the market condition of transport tariff. This let us improve the marketing support to Top Brands to help the result you see in terms of award and to help Top Brands volume and revenues increase. Cost of personnel is increasing for the contract conditions. In terms of segment reporting, this slide shows the revenue split by B2B, that includes HORECA and wholesale, and the B2C that is the more part of the business on the right.
As anticipated, you see that despite EUR 4 million revenue reduction, given to the action taken to restructuring the business, we are able to at least stop the EBITDA adjustments decrease and to obtain four small improvement. The most important information is the stop loss of EBITDA adjusted in this division. In terms of channel mix, of course, the B2B part of the business is improving, and this is the part of the business that realize the highest EBITDA margin in the group. This trend started from 2015 and is going on with aim to support the future EBITDA growth. Looking below EBITDA, we see that depreciation and amortization are in line with previous year. The non-recurring decrease a bit. The net financial cost and income increase a bit due to exchange rate impact, but there is small impact of EUR 200,000.
The tax were reduced, but we lost because was one clear measure. We lost the benefit of reduced corporate tax. So we had a negative impact again about EUR 200,000-EUR 300,000 in terms of additional tax rate. For what concern the second part of the year, we think that considering the trend of the business and considering the reducing impact of extraordinary non-recurring cost, in any case, the outlook for total 2026 is positive compared to 2025. We assume that there will be an improvement in terms of net result in the range of EUR 2 million. Total year, not only second half. For what concern free cash flow, this is an important slide because it seems that we had a negative performance. That it is in terms of numbers, but it is not a negative market situation, but this is a decision.
As you know, we have a bond issued five year ago that we are to negotiate. The interest rate is 2.5%, and we have no interest in anticipating now the reimbursement. So we had cash available that we decide to invest in financing the wine supplier to obtain better condition because of the wine market on producer side is in a very bad shape considering the quantity of wine available in the market. So it is important for wine producer to have the financial support. So the decision was to use part of our cash to finance this supplier. This help us to maintain and improve, in some case, the profitability of the direct margin. The other part of the cash was used to obtain a positive interest.
But this advanced payment is something that we manage. Of course, we will reduce as soon as the cash availability will be not so big as in this period. But it is not something that is a negative management decision to obtain better condition in term of wine purchasing. Despite this sustaining to the supply chain, we were able to improve the cash during the last 12 months. Considering gross of dividend and buyback, the cash generation improved EUR 14 million. If we add to this EUR 14 million, the amount of advanced payment to the wine supplier, we are again in the range of EUR 23 million-EUR 24 million. So in the historical range of the group cash generation. For what concern the market expectation, we confirm that
It is our strategy. Our strategy focusing on premiumization of our portfolio from one side and focusing on sparkling wine on the other side, which are the two categories that are expected to grow also in the coming years. Of course, we have a part of our business made with private labels, very competitive. We can confirm it as a part of our business because it helps us to keep our cost and to split our fixed cost among a larger part of quantities. But again, as you have seen, the strategy of focusing on Top Brands is giving the first positive results. In marketing investment, we are doing B2B business, is proving to be successful, so we will focus on those categories also for the coming years. What is next?
As I said before, we are building our brands because the profitability of these brands is quite double of private labels. So focus on a selected number of brands that you can see here. We are focusing on emerging markets, where we see a positive trend also for the coming years. Cost. We are in process of completing our installation of a new system for the wraparound outer cases in all our plants. That will bring us some efficiency in the production. M&A. I must say that in this general situation of wine market, we see at the moment an increasing number of potential M&A activities. We are scouting, and I believe that in the near future, there could be a good result of this activity. In terms of financing, you know that we have the bond. It is due on May 2027.
We are going to issue a new bond for also a reduced amount of money. The actual bond is EUR 130 million. Probably, we will issue a bond between EUR 70 million and EUR 80 million. Depends on the market condition and on what we decide in the coming months. But our idea is to issue a new bond by the end of the year or at the beginning of next year. Another detail.
The target, again, the Top Brands, the brand building in term of also market and the emerging market that in the last year helped us to balance the situation of the more mature market where the wine consumption is decreasing for some reason. Having a position in quite a lot of country in the world, we are trying successfully to improve our position where the consumption is still increasing and where the attitude towards Italian wine is improving.
If I may add too. To summarize in a nutshell, market condition, the market outside is very challenging. We had to face also the sharp decline of the U.S. in the first half due to the countermeasures of the first half of last year, when it was an explosion of export to U.S. before entering the tariffs. We have beaten in terms of volume the market, so we are gaining market share, and I see that also from the number of customers that is increasing. So is increasing the number of customers, is increasing also the number of countries where we export wines. So a positive trend in this direction and also positive is the growth of the Top Brands. These are the keys for the coming months. Trying to keep under control the cost of production, because as you know, energy is increasing.
Transportation is increasing. But until now, we were able to keep these factors under control. We expect by the end of the year, higher net profit compared to last year.
Thank you. If you have any question, I see at least two. [Alberto].
Hi, can you hear me?
Yes.
Hi, good afternoon. I have a couple of questions. The first is on the guidance, because you are issuing this guidance on the net income. Just if you can provide us more color on the underlying assumption on top line and EBITDA that we should assume in the second half. The second, just to better understand the working capital dynamics, do you expect this supplier financing to change materially in the second half? To what extent it will be temporary? I do not know if you have a sort of leverage target for the end of the year.
Maybe I can answer on the second question about net financial position and advanced payment to suppliers. In the second part of the year, we are going to reduce this advanced payment, and we believe, especially for Prosecco, to increase at the beginning of next year again for some advanced payment to get the best quotes for the products. But you will see in the second half a reduction of this advanced payment, and then again, we will use cash at the beginning of next year in order to get better condition. In terms of guidance, we have not given guidance.
We have given this guidance for the net result. Of course, as you know, the last two months of the year are crucial for the wine business and for us too. We estimate conservative forecast, but considering also what is below the EBITDA. Even if we will not count on the tax rate as last year, we assume that in terms of absolute net result, we will be able to improve because we have also reduced impact in terms of non-recurring. For what concern the business, the outlook is more conservative considering that the market will probably maintain the present condition. We do not see an improvement in terms of EBITDA, but surely we will have an improvement in terms of net result.
I must say that all the contracts now with the customers. We did last year larger quantities. We were able to sell larger quantities to our customers. But due to the slowdown of the market, clients are not collecting as much wine as they ordered at the beginning. It is quite difficult for us to give numbers, because on one side, we have contracts with bigger numbers compared to last year. But on the other side, we see that the actual deliveries to the customers that are below last year. This is the situation of this moment.
Thank you.
[inaudible].
Good afternoon, everyone, and thank you for taking my question. I have two questions for you. The first one is about the margins in Italy. If you can give us more color about the level of margin that you have in Italy, in both division wholesale and HORECA, compared to the other countries. Do you have more costs, for example, in marketing to penetrate the market, or we see margins in line? The second one is about the dealcoholized products. Do you have some update on that? How are they going? If you can give some more details about that. Thank you.
Prices and margins in Italy are more or less in line with the international markets. The markets today are very transparent, so buyers in Italy know exactly what the prices are in U.K. and Germany. More or less are assimilated. Passing first, dealcoholized wine or zero-alcohol products. We are not selling those items. It is a very small part of our business at the moment. They are working quite well in some specific markets. They are not working at all in other markets. Last year, we did some investments in terms of research and development in those products. And seen yesterday, a customer confirming contracts for next year. Positive from this side. At the end, it is a very limited part of our business. And it is a very limited part of the business overall in the wine market.
Thank you very much.
[inaudible].
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For your reference, it is about 20% of the total turnover. Something less than 20%.
20% of the B2B. Considering B2B is more sales.
It is 20% of this EUR 150 million.
Our business plan is to reach at least 25%.
But in term of that margin, there is additional percentage. 20% of B2B, but 31% of the B2B margin. The contribution to the overall profitability is much higher.
Okay. And if I may, on the U.S., we saw the evolution of sales in the first six months, more or less, for the market as a whole. But there was already some positive data for July. Is there something you can share with us how the U.S. market is performing in your case, or what's your view on that market?
Yes.
And finally-
Sorry.
Finally, if I may, Alessandro, you invested some few millions in these, let's say, supplier advances. Can you quantify the savings on the procurement cost that this, let's say, initiative generated for you?
Well, I can answer directly on the last question. We have just calculated this morning how much we will save next year on the advance payment we promised in January to our suppliers. It was in the region of EUR 3 million saving in increasing cost of Prosecco. The advance payment are made in only one item or product or wine, where if you have money, you make the difference, which is Prosecco. Because it's the only one where producers, the wine growers, has a strong position. Because the demand is-
If I understood correctly, it was EUR 3 million. Is that right? EUR 3 million savings.
I can tell you EUR 3 million calculating on the purchase volumes on next year. This morning we did a calculation, how much we would have spent more if we haven't paid, if we will not make any advance payment in January. EUR 3 million.
Okay.
And sorry, the first question was on the
On the U.S., if you can share with us-
Oh, okay.
the recent trends and your view on the evolution of that key market, which for you is only 9% of sales, more or less, but
Overall, the market in the U.S., the wine consumption in the U.S. was down between 6% and 7%. The export to the U.S. in the first six months of the year were a disaster, because there were a huge stock of goods on the market that importers imported last year in the first half before the tariff of Mr. Trump. You can consider that overall, in the long run, the reduction of the U.S. market will be in the region of 6% to 7% compared to last year. It means in the second part of the year, there will be a recovery of volumes.
Okay.
Sorry.
No, please. Sorry.
No, please. Finish.
No, just very quickly. Is it possible for you to share any indication on the final year net financial position compare with the IFRS 16 or without?
For 2026, we assume an overall improvement of net financial position in the range of EUR 10 million-EUR 15 million. The conservative assumption that the policy toward supplier will be still in place.
Thank you very much.
I just add a couple of follow-up. One on the current trading, if you can share more or less which were the trend in July and August. The second on M&A, you said you are quite confident to potentially close something in the second half. Which size are we talking about?
Not in the second half of the year, because we will see in January. We are now just exploring different targets and possibilities both in Italy and outside of Italy on different sizes. We see a lot of competitors having more difficulties than what we have. Big companies are asking themselves, considering the trend of the market, what is the best solution to enlarge it and to reduce the number of players on the market. A lot of discussion in this period of time. I must admit that we are in a position that we do not need to do any kind of acquisition because we have everything what we need. So we are not forced to do acquisition. But my personal feeling is that we are entering in a period where entrepreneurs are more open to this kind of integration more than in the past.
The request in terms of evaluation is now much more in line with the market than the expectation that were outside from the market in the past years. My personal feeling is that it is probably a period where companies are trying to concentrate. We go from acquisition of EUR 50 million to acquisition much, much bigger.
Thank you. I also had a question on the current trading.
Question on current trading. There are some positive months, and there are months that are below than last year. July was positive, August not so positive. September-
Consider that for September, it is very, very difficult. We ship, normally we deliver more than 50% of our revenues in the very last week of the month. We have a portfolio of orders able to match the gap compared to September 2025. It is a question of the production and productivity, but the portfolio is able to match 2025 revenues, that were record revenue because September month 2025 was in the range of EUR 29 million revenue, so very important. The portfolio we have.
Portfolio means orders received from customer for delivery by the end of the month. Then it depends if they collect it really by the end of the month or they collect in the first days of October. But at least the backlog [inaudible] that.
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If there are no other questions, I thank you for joining this meeting. We are going to upload the presentation
Yeah
on the Italian Wine Brands site. See you next time. Bye-bye.