Welcome to everyone, welcome to the presentation of the unaudited results, financial results for 2022. As you know, my name is Eugen Comendant, I have here other presenters with me. We have Mr. Victor Bostan, who is the founder and the CEO of the Purcari Group. We also have Victor Arapan, the CFO, Eugeniu Baltag, the Head of Investor Relations. We also have Victoria Moldovan, we're very happy to include her here, as Investor Relations Officer and of course, we have Vasile Tofan, Chairman of the Board.
Happy to include Victoria and, from the start, actually, maybe I'll take one short second to congratulate Eugeniu and Victoria for doing an amazing job at investor relations communication and getting again a 10 out of 10 at the VECTOR scoring for investor communication. The agenda for today is the following. Well, maybe I'll go very quickly through the Purcari Wineries Group key info. We'll dive into the, well, not only the Q4, but the 2022 operational results. We have a guidance for 2023. We'll also look at how we've performed versus the guidance of 2022. We'll look at the Purcari Wineries stock, and we'll shortly talk about the ESG impact of Purcari Group.
Shortly about the Purcari Group, we continue to proudly say that we are the most awarded winery in 2021. We continue to receive awards. We continue to be the most awarded winery in the Central and Eastern Europe at Decanter between the years of 2015 and 2022. We have, you know, through M&A, we've increased the area of our vineyards to 1,450 hectares. Now we have three countries. It's Moldova, Romania, and Bulgar ia. We are proud to have among our institutional investors yourselves, you know, companies such as Horizon Capital, Fiera Capital, and others.
As I was saying, we are proud to say that we are a group now with an increased footprint, which also covers Bulgaria, because as you see here on the bottom right, we have a new acquisition, which it's a company that we've acquired 76% in. We've acquired it in October of 2022. This is Angel's Estate. It's one of the leading wineries in Bulgaria. It's in a fantastic location in the central of Bulgaria. It's a known wine region.
The purpose of this M&A is, first of all, of course, is to do a very good M&A, and we'll see that actually performing a good M&A actually has some kind of impact on the P&L, as we'll talk later in this presentation. Ultimately, the goal of acquiring Angel's Estate, but in fact, any other winery in other geographies that we may go with M&A is to create a local champion in that region. This is a good slide because it shows the Purcari Group at a glance. The table on the top left shows the fact that we've been able to grow, consistently grow, the revenues of Purcari Group and in fact, grow the business. Not only the revenues, but also EBITDA and net profit and the earnings per share.
we've IPOed in 2018, if you look today, we are at RON 302 million of revenue. We more than doubled the business since the figures that we've presented for the IPO. We've generated a gross profit of RON 131 million, EBITDA of 95.5 with some adjustment, which we'll talk about it later, and a net profit for 2022 of RON 57.2 million. That equates to a earning per share of RON 1.32 per share. We also put a slide on the, you know, the... Not a slide, sorry. We've also put a chart which shows the growth of the revenue that I've mentioned versus the share price.
Unfortunately, you know, if we look now at the share price, we are below the IPO, but we all understand the reason for this. Of course, we cannot avoid the war that's in the region. In general, we are optimistic and we are hoping that soon this war will end and so the attitude of, well, let's say that the perception of risk that investors have in our stock. You know very well the our business model, which is affordable luxury. Affordable luxury means that we offer really top of, let's say, one of the best wines in the world because we are the most awarded winery in the world.
While we still sell mostly in premium segment, you know, premium in the Central and Eastern Europe may mean, you know, different pricing segment. Overall, it's still a very affordable price level for our consumers while we offer amazing wines. This can be seen through the fact that we continue receiving many medals. You know, on the left, you can see that we are beating the other companies in Central and Eastern Europe when we speak about the number of medals received at Decanter. Decanter is what we call the Wine Olympics. If between these, the years of 2015-2022, we've received 129 medals. Then we take the top 5 most important wine competitions in the world.
We received in 2021 97 medals, and we're yet to calculate the medals for 2022. Overall, again, what's important, and we've stated this many times, what's important is that we are able to grow revenue, grow volumes, but at the same time, maintain, if not even improve, in fact, not even, but certainly even improve quality while growing those volumes. This is an important because we want to be, we want to, you know, be a group which is 10 times the size of what the group is today. To be able to scale to that level, you need to be able to also maintain and grow your quality. The previous slide was the exports, this is the consumers.
We continue to, on one hand, be an appreciated wine on Vivino. Vivino is a rating app, and you can see that we are scoring 4.1 and above when it comes to the quality of the wine which is perceived by the consumers, very important. Combined with that, we are the most mentioned brand on Instagram. Not only do we produce great wine, but we're actually a cool brand. These combined quality and brand leads to the ability to actually price accordingly to generate the EBITDA and the net profits that you as investors expect from us. We continue on the Vivino. I've mentioned this is an application.
You can see that when we speak about the premium segment of RON 30-RON 60, we take the top 25 wines that are on this application, we dominate the first, the top 25. 14 out of these 25 are actually Purcari wines. We dominate the Vivino app. Vivino app, we have an agreement with them. We also do some marketing through them, but that also allows us to view this kind of graphics which shows the geographies where Purcari wines are being scanned. As you can see, Purcari wines, you can say pretty much we're most of the world, at least the northern hemisphere.
Now we'll go to the Q4 and the 2022 operational results. First of all I'm, you know, we are generally very happy with the results. We can announce a growth in revenues of 22%. Now we're at RON 322 million. As I mentioned, we've doubled since we've IPO'd. EBITDA rose by 27%. Here I'll start to make the note. The note here is that we are also including a RON 14 million one-off net positive impact from a bargain purchase of Angel's Estate.
This is done with the involvement of our auditors where the way it works is that if you're buying a company which has lower net assets than what you're paying for, usually you transfer that and you reflect that into goodwill. In our case, in fact, we've paid less for a company that has more net assets. The way the auditors and the way the finance team have reflected this is a one-off positive effect through the bargain purchase of this asset. When we move to net income, you see at the top these are all the figures that have included different things.
The note number 2 is this RON 26 million is the proceeds from selling our stake in the GCC and also through the transaction that we've done with the Speed, which is Hush. In 2021, the RON 6 million, note number 3, is again some proceeds from the sale of the stake in GCC. Now we're mentioning this RON 14 million which is this positive impact from the bargain purchase of Angel's Estate. Below you see the adjusted figure. You can see that in 2020 we know it was a pandemic year, it was a difficult year. We posted this RON 33 million, then we have RON 46 million, and now our adjusted net income is RON 43 million.
Going through some operational highlights, again, as I mentioned, revenue is up 22% when we speak about the group as a whole. When we speak about the wine business, that means we exclude Ecosmart from this, from these figures. We look at a growth of 18%, which is a very good result overall. Already telling you that this 18%, the majority, around 3, sorry, 2/3 to 3/4 is average price per liter, and the rest is growth in volume. This is important and this is good because it shows that we've managed to push some price increases through, though not enough, more, more to come, but also we are good in.
Well, not that we are good, but there are many, many impacts, but we're also good at pushing more the premium segment and the premium wines versus the, the value, the value segments. Actually there's another conclusion here. Excuse me. We'll look into this later, is that in this inflationary environment, and maybe we can call it a crisis, the premium segments are holding up better. Demand for premium segments hold up better versus the value segments. When we speak about So if you look at the fourth quarter, in fact, the fourth quarter has contributed strongly to the growth. We speak about 26% increase versus the same period of last year.
We have some positive effects in the revenue growth that comes from Angel's Estate. It's around RON 3 million. The countries that showed a very strong growth were Romania, Moldova, and Asia. When we speak about the premium brands, these are Purcari, Bardar also again, they showed stronger growth. In countries such as Poland, Czechia, Slovakia, and the Baltics, we see flat or slighted, slight decline, but this is again, is because we are prioritizing margins over selling volume. We've pushed some price increase, obviously, you know, in this value segment. A combination of, you know, some inflationary pressure, you know, maybe some pressures on disposable income of our consumers and with our prices has led to some lowering of demand.
When we speak about EBITDA, on this one, we mentioned the normalized EBITDA, we exclude that RON 14 million, the positive gain from Angel's Estate. We have an EBITDA of RON 81.5 million, and this is a margin of 27%, which is above the guidance that we've provided. We're adjusting net profit. Again, we remove that RON 14 million from Angel's Estate. We have an adjusted net profit of RON 43.2 million, which is a net profit margin of 14%. It's on the upper level of our guidance. When we speak about M&A, I've already spoken about Angel's Estate. We've acquired 76% in this business. It's a full cycle winery.
It has 100 hectares. Even though this year, Angel's Estate still contributed to our consolidated figures with a relatively small net loss, contributions on the net profit. Overall, we have clarity on the actions that we need to do with this winery, especially actions that are focused on one hand, which is primarily is to turn it into a profitable business. When those are clear, most of them are on the production side. Then also on the scaling up the business, which is on the commercial side. That's work with, you know, improving our presence in the HoReCa and the fragmented trade, but also improving our commercial agreements with the key accounts.
Again, the team has done very well here on getting 10 out of 10 in the investor communication score. We've awarded a dividend of RON 0.51 per share. It was awarded on the eighth of September. This translated to a 5.5% yield at that time. We'll see later that we are quite a liquid stock on the Bucharest Stock Exchange. You know, we are also adopting shareholder-friendly tools. For example, the AGM this year will adopt a new system e-vote, where we'll make it easier even for retail investors to vote on the AGM agenda. Going a bit more into detail on the results.
The fourth quarter, we posted RON 102 million. This is one-third. The fourth quarter accounted for one-third of the revenue for the year. We generated gross profit in the fourth quarter of nearly RON 41 million. That's a gross profit of 40%. We can see that some of the pressure on the, you know, inflationary pressure when it comes to the glass, the carton and so on. It's starting to appear. We believe that we'll manage to push price increases forward during this year to account for that and to maintain the margins that we are accustomed to in this business.
The EBITDA for the fourth quarter was RON 34.8 million, with a margin of 34%. Again, this is not the adjusted EBITDA, the net profit for the quarter was RON 21.8, with the net profit margin of 21%. When we look at the 12 months, this is where some things net out and cancel each other out, this is probably a better way to look at. RON 302.5 million, that's a growth of 22%. In fact, I can also tell you that it was what's positive to see is that the third quarter and the fourth quarter showed strong growth.
We've posted around 27% growth year-over-year in the third quarter, and 26% growth year-over-year in the fourth quarter. Overall, we see that the recent quarters showed a positive positive growth, which is good. Gross profit for the year, RON 131.4 million. That's a gross profit margin of 43, three percentage points less than in 2021. The SG&A overall grew by 18% lower or less than the growth of revenue. Now it's at 69.2%. And we have other income expenses. Here this is where the adjustment or the bargain bargain purchase net positive effect of Angel's Estate is included.
It's above the EBITDA, so that you calculate correctly in your models. EBITDA for the year is 95.5%. That's a 32%, you know, margin. Net profit for the year, RON 57.2 million. That's a 19% margin. If we were to look further down with the adjusted EBITDA, and we prefer that we speak about the adjusted EBITDA and adjusted net profit, so to be able to compare more apples to apples. We look at an adjusted EBITDA of RON 81.5 million. That's a 27% EBITDA margin. We look at RON 43.2 million net profit, which is a 14% net profit margin.
This is a good slide, again, probably for your, for your models because we are trying to be as transparent as possible with the fact that we have 65% stake in Ecosmart. Separating this allows you to better see the progress that we have on the wine business versus the effect of Ecosmart. If we were to look at Ecosmart, what's positive to see is that the revenue nearly doubled. We are the revenue of Ecosmart in 2022 were RON 21.4 million, with a gross profit margin of 24%, strongly improved from the 2021. All even though if we go all the way down to the net profit, we post a still a negative net profit.
This is because we have provisioned for some bad debt and some loss through bad contracts that were historical with Ecosmart. Overall, with Ecosmart, we do see, you know, positive evolution of this business. This year, 2023, the plan for Ecosmart is to install a completely independent team, is to, you know, grow significantly the business. Eventually, if you remember in other presentations, we offered three possible scenarios. One scenario is that we stay majority stakeholder in the business, and we collect dividends from this business. Option number two is that with independent management and with a stake under 49%, we would be.
This will not be classified as a subsidiary, the figures will not be consolidated. This will give clarity to you as investors into our figures, but also, in our, you know, messages to other investors of what our business is about, will become clear. The third option would be to fully divest the business in the future when we turn it around. If we were to choose this option, of course, we would choose it because it would give some strong contribution from divesting this business, and we would use those proceeds either to give out an extraordinary dividend or to use for our investment opportunities.
We look on the wine business, just the wine alone, excluding Ecosmart, the revenue is RON 281.1 million. Gross profit of RON 126.2 million. You can see here the margin is 45%, closer to, well, higher because the Ecosmart business has diluted a bit the gross profit margin. If we go down, EBITDA, adjusted EBITDA is RON 81.2 million, which is a 29% EBITDA margin. Again, it's close to our 30% margin that we are always targeting to have for this business. The net profit margin for the wine business alone is 16% with a net profit of RON 44.5 million.
We are strong on when it comes to balance sheet. You know, we have a strong cash position. We have a, you know, a slightly increased net debt, but that's because we have, you know, on one hand, we've acquired the Angel's Estate Winery, but also we started with our CapEx program.
Overall, if you look at also the current ratio, cash ratio and other metrics such as debt to equity and net debt to last 12 months EBITDA, we have a healthy balance sheet, which is important because on one hand, we always want to have a healthy balance sheet to ensure that any headwind or even storm or hurricane we can pass easily. Also from the perspective that if we come across good opportunities for M&A or for other capital allocation, we have the healthy balance sheet to be able to do so. When it comes to the performance of some countries individually, Romania is a very strong performer. The team in Romania, the sales team in Romania has done a fantastic job.
Romania overall grew by 20%. Here, Purcari and Bardar are leading this growth. Bardar with a growth of around 65%. Even though of course from lower numbers, but it's a very strong growth. We plan to invest further into the growth of Bardar sales in Romania because we see it as a, as a, you know, a very high potential market as we see it from the wine business. In fact, even in December, we already went above the line. If you remember the plan for Bardar was initially to do full listing, so presence in the channels. We've done that.
It was a below the line, you know, period, which we've done that, and now we go above the line. Now we are really, you know, full gear into building this brand and ramping up sales of Bardar in Romania. Purcari did very well with 24% growth in Romania. We launched, so Nocturne, by the way, is doing great as a HoReCa line, you know, product line. Now we're also planning to push sales of Sapiens. It's a product that we launched initially. It was a dedicated product for one account, for one partner, but now that's open. Now we have openness to push it into all channels.
That's also a premium wine, which we plan to push and to grow sales in it. Crama Ceptura grew by 9%. Solid growth overall. We will look to create premiumization. There are certainly some price increases that are following at Crama Ceptura in 2023. If you look at Moldova grew by 27%. In fact, all brands did very well in Moldova. Bostavan grew at around 31%, Purcari at 29%, and Bardar at 25%. Overall strong growth.
It's on one hand is the amazing job that the sales teams are doing. On the other hand, we also consider the fact that we had some immigration of Ukraine refugees that have potentially contributed to a growth in sales, even though that's perhaps more towards Purcari sales, less so to Bostavan and Bardar. Purcari is in fact quite a known brand in Ukraine. Poland, we look at -2%. Here, you know, as I mentioned, for Poland, for Czech Republic and Baltics, we focused on the margins rather than volumes.
We see this -2%, we also see a positive figure within this -2% that the Purcari brand Purcari wine sales grew by 23%. We still have work to do in Poland going forward. We also plan to have a local team because this is overall for the long term, it's an important market for us. Asia did very well, it's a +42% growth in Asia, which is primarily for us, we look as primarily China. Purcari wines did very well. The sales nearly doubled with 97% growth versus 2021.
We also saw growth in sales of Bardar, these are good sales because these are all very, you know, especially for Bardar, these are premium products. More the premium range of the product line as being sold, growth of 21%. Even Crama Ceptura showed an increase of 15% sales in China. Ukraine, of course, we are down 42%. Overall, I think, you know, from the performance sales performance perspective, I think the sales teams overall have done an amazing job of countering the loss of the sales whatever we lost in Ukraine and also in Belarus, to compensate us to still generate growth for the wine business of 18%.
Just to mention, by the way, we do not sell any wines in Russia. Moving on, it's again, we're happy to show that we are improving our market share in our main markets or in Romania. Our market share now overall is at 10%, so we've taken over the third spot. Just to note that the first two, the spot number one and spot number two, these are not really our competitors simply because they are players which are playing more in the value segment, in the low end, price segment rather than in the medium or premium segments.
On the premium side, we are, you know, a detached leader with more than 20% points difference when we combine the Purcari and the Ceptura segment shares versus the number 2 of the player in this premium segment. Quickly about the countries, now we look from the brand perspective. Overall, the picture is pretty clear. The Purcari and Bardar, which is only premium products, they've grown Purcari with 25% and Bardar with 21%. Bostavan and Ceptura g rew at 4% and 5% respectively. The growth, again, mainly came from Romania, Moldova, and Asia. In fact, also other markets we are doing.
The team have done great job in opening up sales into United States, into Turkey, there's some good development for the United Kingdom. Looking at the harvest, this 2022 was a very good year for us when it comes to harvest. If we were to compare with 2018, which was sort of a record harvest that year, we followed with some decline with 2020, which was one of the record poorest harvest. In 2022, in fact, we also beat 2018 figures. We had a good harvest. The other positive effect was that overall the prices of grapes from third parties was relatively low this year. What we've done, we've loaded on third-party grapes.
Of course, we as a requirement for our for the wine production, but also for distillation at Bardar in order to already prepare to have enough stocks for the future. What's important here is to say that Purcari was, you know, for the half of the year, Purcari vineyards were irrigated. On the first of July of 2022, we've launched the irrigation at Purcari. It's a irrigation in fact which improves the quality, so it's a state-of-the-art irrigation system. We are planning to do the same in 2023 for the vineyards that we have in Alexandru Loan Cuza around over 600 hectares of vineyards.
We keep on being innovative and progressive when it comes to product development. We mentioned here Purcari Nocturne, which has proven a tremendous success. Purcari Academia. It's a ultra-premium range of wines that are vinified in clay amphoras. This is a very limited edition wine range, wine collection. In fact, it's we need to now potentially to increase prices to slightly reduce demand because we are running out of stock from the first edition of these wines. We're also going towards the more the organic and more health-oriented products. We've launched the Purcari Native.
This is, these are wines coming from a plot which, around 25 hectares of vineyards, which in 2023 we expect to finally to receive the certification of being organic. Now they're classified in a transitionary towards organic vineyards. Native is, the Native Rosé is launched, and in the future we'll be looking to launch other products, other wines from from those organic vineyards. We also launched Prociano. It's all that you can imagine, all that you can put as a healthy statement to a wine. It's zero alcohol, it's low calorie, and it's very high in procyanidins or flavonoids, bioflavonoids.
These are antioxidants which are healthy for the body. In fact, I do invite you to somehow to find this wine and to try this out. In fact, also, even though it's 0% alcohol, it's very pleasant to drink. We're launching new ranges like now we launched initially Wine Crime Rosé, now we're launching Wine Crime White, soon we'll be launching the Wine Crime Sparkling. Of course, the 25-year-old Bardar was launched, and it received the number one spot in the world when among brandy. It took the title of Taste Master at the most prestigious brandy competition in the world.
This shows, we were always speaking about the quality and here also the Brandy Taste Master that I mentioned for Bardar is being presented. Number 1 worldwide is extremely important award, but also we receive awards for many other of our wines. You see that we received at Mundus Vini, the best producer from Moldova. The Decanter, Negru de Purcari was included in the top 100 classical wines in the world. This is an extremely, you know, good award to receive from Decanter. Decanter is the most important competition, but also the critics at Decanter are the most important in the world. We continue to...
Again, we've, we have this top 10 best sparkling wines in the world at the Effervescents du Monde with our sparklings. Gold, grand gold for our rosé and Jancis Robinson mentioned, so she dedicated, she called Freedom, the Freedom Blend, the wine of the week in the UK. Again, a very important nomination. We continue to be innovative when it comes to marketing. As I mentioned earlier, creating a brand is important also for the business, and we continue to do that. We see here some campaigns for Bardar. As I mentioned, Bardar was even on TV in Romania. We started a partnership with Horea Brenciu.
Whoever is from Romania knows that this is a famous, it's a public figure in Romania, and this will be our brand ambassador. This is a longer-term partnership that we have with Horea Brenciu, we foresee that this will help us ramp up the growth in sales of Crama Ceptura We look at the guidance. First, we look at the guidance for 2022 and how we performed against it. We at the beginning of 2022, we issued a guidance and we kept this guidance for the whole year. We issued a guidance of 15%-20% revenue growth.
We, when we speak about the group overall, we managed to beat that, so we've closed the year at 22%. We issued a guidance of 10%-50% growth in the revenue of the wine business. We managed to beat that with 18% growth. When it comes to EBITDA margin, we issued a guidance of 20%-25% for this for the margin. We also beat that because we have 32% when it coming to the business overall. When we speak about wine, or when we speak about the adjustment that we that we have for the acquisition of Angel's Estate, we have a 27% margin, which is above our guidance.
For the net income margin, we issued guidance of 10%-50% margin. If we were to go full accounting that we're beating the this guidance, if we were to adjust for the RON 40 million, then it's 14% in the upper range of the guidance. I would like to issue today a guidance for 2023. If you notice that in 2022, the spread was 5 percentage points to our guidance here, in 2023, we try to narrow it to 4 percentage points. We are expecting revenue growth overall as a group 18%-22%, and the revenue growth for wine of 14%-18%.
We see this from the fact that overall, first of all, we are planning to further introduce price increases into the market. We'll have some contribution from the price increase, but also maybe from the mix. We have high ambitions for growth in Bulgaria, and we also have ambitions for growth in other markets which are outside our home markets, but also growth in those markets as well. When we look at EBITDA margin, the guidance for 2023 is 22%-26%. Again, we prefer to go with the principle of underpromise and overdeliver. We understand that we will have some pressures on the EBITDA in 2023 coming from a cost inflation.
We believe that this is a prudent EBITDA margin guidance for 2023. Net income margin guidance 12%-16%, which is also driven, of course, from the fact that, you know, we have all this, the EBITDA margin that I've stated here as a guidance, but also the cost inflationary pressure. Additionally, we've put into use some of the CapEx that we've done in the previous period, so that also will have some impact on the from the depreciation perspective. That's why the cost is the reasoning for this net income margin guidance. I'll quickly go through the Purcari stock. I mentioned that, you know, in this slide we were second after TeraPlast.
Now, you know, we're slightly beating TeraPlast when it comes to this relative to market cap liquidity. So, you know, the average daily trade in terms of basis points is 10.9% for Purcari Wineries. When it comes to our margin, we remain, you know, in the top when it comes to our peers that are listed on stock exchanges where with whom we can compare the EBITDA margins. So our margin is 27% versus an average EBITDA margin of 13.6% in the industry.
When we look at the price-to-earnings ratio, we versus our peers, we have 8.4 price-to-earnings ratio, which is below the average of 16.2 price-to-earnings ratio at our peers in the wine business which are listed on other stock exchanges. When we compare to the Bucharest Stock Exchange, again versus the 14.3 average price-to-earnings ratio on the main market, we are at 8.4, which is below the average. Excuse me. I always like to show this slide to investors because here, you know, we've seen in the presentation that Purcari not only is a company that is in business with relatively high margins, but also it's a business that keeps growing.
We've shown a CAGR of, you know, around 20% over the last few years, while our price to earnings multiple still remains low. We understand there are some other implications and some other considerations for our investors when it comes to the price of our stock. When it comes to ESG, for us it's important. We are in fact giving more and more attention to this. We recently hired a consultant, consulting company to support us in developing the ESG strategy, and to, you know, be on par with the best when it comes to non-financial reporting. We're using the UN SDGs, these sustainable development goals.
When it comes to the environment, you know, first thing to mention is that we've launched the irrigation, which is irrigation with least water waste, which is underground irrigation for our 300 hectares in Purcari. We plan to keep on doing that in the future. We've installed the 200 KW capacity at Purcari with solar panels. This provides now around 10%-15% of our needs at the Purcari Winery. We plan this year to add another 200 KW capacity. Purcari will be around 400 KW capacity this year. This should give around 20%-30%, or should cover around 20%-30% of our needs. In fact, we plan to do that also for Bostavan and for Bardar.
In fact, all the three companies that we have in Moldova, we plan to install solar panels to make strong progress in utilizing renewable energy. We've, through our Ecosmart Union SA company, recycled 73,811 tons of waste. This is a significant amount, and from the message of ESG, this is a strong point to make. Through our partners, we calculated that we've sequestered around 3,566 tons of CO2 in 2022. We also have one person that will be certified in the sustainable tourism with a sustainable tourism certificate. On the social side, we launched the Purcari Foundation.
In fact, we're very busy now of with implementing projects. The projects are directed now maybe perhaps more towards helping Ukraine and Ukraine refugees, but also to Moldova and Romania, these regions of removing poverty and helping children and education. It has a clear charter towards these goals. We, as you know, we've done a lot for the refugees.
You know, we've helped more than, if I remember correctly, it was around 4,000 refugees that we've sheltered, and we've helped around 13,000 refugees at our supporting centers. We are contributor or with CCF Moldova, which is under patronage of Hope and Homes for Children from the U.K., and we're also a contributor for the Hospice Angelus. We are a general sponsor of the Moldovan National Olympic Committee. We've done many other projects in the communities that we support. From the governance perspective, we have a 5-member board composed of both women and men with high skills.
Notable is that we've the board of Purcari has been awarded best board of directors in 2021 by ARIR, the Romanian Investor Relations Association. Good. This was the presentation for today. Now we can open for questions. Yes.
Hello.
Unless we have something on the chat. Maybe we have something on the chat as well.
Hello?
Hi.
Yes, we can hear you.
Can you hear me?
Yes. Yes, we can hear you.
Thank you. I have a question on working capital, please. There was significant negative working capital during the year. Cash flow is important. If you could allude to what was driving that and what the trend will be next year, that'd be great. Thank you.
Thank you. On working capital overall, our business, especially growth needs to be, in a way, fueled by working capital. We are constantly increasing our stock, especially with the red wines, to be able to fuel the growth of that we are planning for the years to come. It's part of the structure of, or the nature of the business to have high inventories. Additionally, since we've purchased, as you've seen in the harvest slide, we've purchased quite a bit when it comes to third party grapes. We've loaded, because the third party grapes were at an attractive price, we've increased our purchases, so we've processed more grapes, and also we've distilled more at Bardar.
Overall, the working capital is fueled by the necessity to constantly increase our inventory to fuel future growth.
Okay. Thank you.
Thank you.
Hi, Eugen. I have a question regarding the wine stock. What are you going to bottle next, and what price is gonna be? I mean, they're an expensive or a cheaper harvest. The second one is about managing this producers, third parties from which you acquire wines, I mean, grapes. I remember that you used to have in place some quality control policies, but that would be nice to be reiterated. Also about input inflation, how do you see the beginning of the year, and where are we going to get in the end? Thanks.
Thank you, guys. Thank you for the questions. On the, on the cost of inventory, we still have some more older wines, like red wines, that are coming from the harvest of 2020. Even in the 2022, we had some of the impact on the cost of goods sold from higher cost of inventory that was coming from 2020. In 2022, the harvest was one of the best harvest that we had in recent years, and the cost per kilogram of grapes was lower or was, let's say, on par with the best years that we've had in previous years.
Overall, when we look at the impact of the grapes in the cost of inventory, we should have a positive impact from the harvest and the purchases of 2022. Of course, this does not avoid the cost inflation of other packaging materials such as glass, such as, you know, carton and labels and so on. That will, you know, that will potentially have an impact going forward. To cover straight away your third question, of course we all see the situation around us. We all see the inflation rates that are happening all over Europe, but also especially in the regions that we operate. Our plan is to push price increases to the channels to eventually match this inflation.
Of course, we need to do it in such a way where we balance a few things. We need to balance a few things. On one hand, we need to balance our relationship with our, you know, with the channel, such as the key accounts. They are difficult to negotiate with. We know that, and you've seen us in the future take strong stances with them. We've done one time we've done this with Lidl in Romania, we've done this with Biedronka in Poland. This is all part of negotiation. I'm not saying that we, you know, we're planning to. What I'm saying is that this is a, is a tough process and but we're planning to push through with price increases towards the channel. That's on one hand that we need to balance.
The other thing that we need to balance, of course, is the purchasing power and, you know, the elasticity of demand, the price elasticity of demand to our consumers. What we see from even the figures of today is that there is more sensitivity in the value segments. Any price increase in the value segments may reflect into potentially a higher, you know, delta of demand. At the same time, it's actually we know from the market that all the wineries will actually push price increases forward. For everyone, it's a difficult process, but it will happen because there's no other way.
We are, in fact, you know, one of the companies with, probably with a higher efficiency and, with a better margins and a better economies of scale versus others. Managing the demand and this, you know, looking at the price elasticity of demand in different segments is something that we also need to do. Again, as I said, more elasticity in the value, less so in the premium segment. Overall, as we saw in 2022, when we saw this shift and maybe a stagnation in the countries which primarily we sell value, like the, from the Bostavan winery, such as Poland, Czech Republic, Slovakia and the Baltics. We saw, you know, an increase in the premium segment.
This change in sales mix, in fact, give us as a positive impact on the margins overall. When it comes to the third-party management, indeed, so, the way we work with the third parties, not only do we have these agreements and we monitor how they work the vineyards, but we in fact, we also finance them. In a way, we make them more, not necessarily dependent, but we are supporting them, and we become their preferred partner because we also finance them during the year for the works that they do in the vineyards.
Overall, the answer is yes, we manage them closely, because for us, the quality and the quantity and the cost price for the grapes that we buy is very important. I hope I've answered your questions.
Great. Thank you. One more thing. You'll be sorely missed. Wish you all the best in your future endeavors.
Thank you very much. I hope to continue to contribute to Purcari by staying on the board of directors. I guess this will be something for the AGM on the 28th of April. Thank you very much, guys.
Okay. I have a question, please. Can you hear me?
Yes, we hear you very well. Thank you.
Okay. Thank you. Congratulations again for the good results. What I am surprised a little, it's about Poland. What is happening really with the market of wine in Poland? They don't like wine from Moldova or from Romania. I mean,
Yeah.
Really, I'm surprised by low share of sales in Poland.
It has nothing to do, by the way, with the Moldovan wine. Poland is still an incipient market. It's not a mature wine market. The average consumption per capita is around 6 liters versus 20 liters in Romania. It still has a long way to go. It's still a market which drinks quite a good share of semi-sweet wines, so it's not all primarily dry. This means that it's still a price led demand. Price is very important.
Why Poland is important to us and why it's very important to us to maintain market share, because we foresee that as other markets such as Romania and other markets have evolved and became what we call a more mature wine market, where the consumption is higher per capita, above 10 or above 15 liters per capita wine consumption, yeah. When there's a shift between Shift from semi-sweet wines to dry wines. We know that this shift will happen because it pretty much all the market that has, you know, we see this shift in pretty much all markets when we look at even worldwide. Eventually this shift in the market will happen.
When will happen, we know that that's when we'll be able to reap the benefits of having that market share and beating the competition at the premium segment, not necessarily competing on price and the value. At the moment, we are not trying to be overly aggressive on the price just to acquire share at the expense of the brand. We're just there to, you know, to grow with the market and just to maintain our market share in the Polish market for now.
Thank you.
In the future, as I mentioned, we are planning to have a local team because that's in the same way that we've grown Romania, and we have a very strong presence in Moldova. We've managed to do the penetration in Ukraine. Ukraine was also with a local team because we've opened Purcari Wineries Ukraine with, you know, local head, with, you know, people in marketing, people in sales. That's how we've managed to get a good penetration in Ukraine. We know what's happening in Ukraine, but overall before that, Ukraine was showing very strong figures. Probably Romania is the best model that we can compare with. The same way that we grew Romania, we would be looking to grow Poland.
Of course, not necessarily with having a winery, local winery, even though this is also a subject. You know, having a local winery, they have around 3,000 hectares of vineyards. You know, it's something. Not necessarily that we are very expert on this, but it's something. We're looking to have a local team that knows the market, that speaks Polish, is Polish, understands the channels, and will keep growing our presence in Poland. Think about it this way. Right now we have pretty much zero presence in HoReCa, pretty much zero presence in the fragmented trade. We only deal with large accounts.
Thank you.
Yes. Eugen, playing the moderator here, we also have some questions in the chat maybe you can quickly cover.
Yeah. Let me have a look.
Maybe to give you, give you some breathing room. The last question is on our expectations in terms of the security situation in Moldova. Let me tackle that up front. Probably it's on top of mind of many people. The short answer is that we do not feel concerned now, and our source of comfort is primarily the messages we're getting from Washington D.C. and from the U.S. local embassy. If there is one, say, party in the world that controls the situation, we believe it's them. Just to contrast it, you know, they were out of Kyiv in early January, and they've been making warnings about the military risks in Ukraine since November 2021, so way before the actual invasion, full scale invasion.
In Moldova, the latest statement, I think we need yesterday from the State Department and the Ministry of Defense, have been that they do not see military risks for Moldova. That's one data point. The second, the travel advisory note as published by the State Department has stayed at two. It's the same, it's the same risk level as for the last 12 months. By the way, it's not a very high risk level. In that sense, yes, there's a lot of information war. You know, Russia doesn't want, doesn't want for things to be quiet in this part of the world. I think this is more informational intimidation than real movements on the ground.
Again, the message from the State Department is very clear that they don't see military risks for Moldova at the moment. The U.S. ambassador and the entire staff is here, which is also a comforting factor.
Hi. Do you hear me?
Yeah. Yeah, we can hear. Thank you, Vasil.
Oh, okay. Thank you for your presentation and congratulations with the results. I also have a couple of questions. Can you please update us with the number of points of sale in Poland, and what is the relation with Lidl? Also in Tesco, in Czechia and Slovakia?
In Poland, if we speak from a RON perspective, we sell primarily Bostavan. From what you see there, around 20 million RON sales in Poland. I think that was the question, yeah?
No, I.
What are the-
Can you please provide the number of point of sales?
The number of point of sales?
Yes.
Well, this will be in the, probably the, in the high hundreds, because we are working with companies, you know, our wines can be available in, you know, Biedronka, Auchan, Carrefour, and.
Tesco.
Tesco was bought in the new I forgot the name of the new chain that bought Tesco in Poland. We are in Billa and so on. We are present in many accounts. I would say it's in the high hundreds.
I would say I think it's over 5,000 accounts. Biedronka alone has 3,300 outlets. Żabka has 9,200. We are in a good portion of Żabka, not all of them, about a third of them. You know, with the big hypermarkets, we're probably crossing 5,000.
How about the relation with Lidl?
We are yet to be included in Lidl, Poland.
Okay.
The negotiation is still going on.
Regarding the Tesco in Czechia and Slovakia.
Well, Tesco, we are present. We are more so present in Slovakia, in fact, than Czechia. We are working of improving our presence in Czechia. Overall, the Tesco sales contribute to less and less towards our sales in these countries.
Thank you. My next questions will be regarding the increase in excise duties in Poland and Republic of Moldova. Are you planning to increase the price of brand products or how do you achieve the demand in the following period for these products?
Based on the increase in the excise tax, we in fact already pushed some increase forward. This primarily for Bardar. Still more to come in 2023. We're still planning to push some price increase in 2023 towards the market.
Thanks. Regarding dividend, are you going to maintain the up to 50% payout ratio?
Of course, I can make a statement now, this will be proposed by the board of the AGM. Generally, we tend, we want to remain the company that's also growth, and that also is a quality company that gives dividends. Yes, generally, we are looking to pay up to 50% of the profits generated in a year.
Thank you. Regarding the level of CapEx for 2023, can you provide a level or in what segment the CapEx will be oriented? I understand that will be a significant amount in the Angel's Estate winery, but can you detail please?
For 2023, it's still a relatively CapEx intensive year, because we have Angel's Estate. We were planning to install solar panels. We are planning to install the irrigation for over 600 hectares in Alexandru Ioan Cuza. All of these projects have, you know, we are, of course, we're doing our ROI and break-even analysis. All these are good projects that we should definitely allocate capital towards. If you were to look from a percentage of sales, we'd still expect this year for the CapEx to be high single digits, maybe low double digits from sales.
What we also expect is that following 2023, the CapEx should normalize and should go more towards the maintenance CapEx at maybe low single digits from sales. Of course, if we, you know, when there's a M&A opportunity, that'll be something else.
Okay, thank you. Can you provide a guidance regarding Angel's Estate brand? What it will represent as a % of total revenues?
Now if we look at the fourth quarter, it was RON 3 million, so it was 3% of the fourth quarter group sales. This was wine. If we remove EcoSmart, it's probably more. If we were to take 2022, it's around 5% of sales of wine. Going forward, of course, we are looking forward to increasing this, and we are planning to accelerate growth pretty quickly. Now it's at 5% of total sales, of wine sales, and depends on how good we are in the future to make it a much higher number than that.
If I were to give you a guidance, definitely, I don't know, strong double-digit growth, maybe not if not 2023, 2024 onward. Because we, why I believe so, because we've identified clear directions where we can create improvements, clear directions when it comes to our cost base or operations, but also commercially.
Okay, thank you. Are you willing to introduce Purcari brand in Bulgaria?
That's a yes. That's a yes. The same way that Crama Măciuca acted as not only as a winery in Romania, but also as an importer from Moldova of Purcari and now Branda, which is doing great, and Domeniile Cuza, which is doing great. Similarly, we would want to do that for Bulgaria. Bulgaria is an attractive market. That's one of the first thing that we've analyzed, where the price, the quality to price ratio of the competition is fairly low. Price to quality ratio is high. The pricing is attractive for us as a company. In fact, Purcari is already available in Bulgaria, but in a very small.
We have a small partner, but of course, now that we have a winery there, we will look to strongly enhance the distribution in Bulgaria.
Okay. My last question will be, if you can provide a guidance on the long term regarding gross margin for EBITDA margin?
Yes. The guidance we showed it in the presentation, I mean for the long term, not only for 2023.
Yes, on the long term, if you can provide.
Look, on the long term, of course now it's a bit turbulent times with the inflation, with war and everything. That's why we are being prudent when giving guidance for the margin. Overall long term, the way we see our business, the margins for our wine business is 50% gross margin or maybe very high 40s. Let's say roughly, I'm thinking rough figures, 50% gross margin, 30% EBITDA margin, 20% net profit margin. That's where we always target for the long run.
When you speak long term, we refer 5 year or 3 years?
We can speak three to five years.
Okay, I understand. Thanks a lot. That was from my team.
Thank you.
Hello. Can you hear me?
Yes. Yes, Dan.
Hi. In conjunction with the last question, I guess the key to keep the high growth margin will be how you will manage to keep the Purcari brand as high as possible on the market. What I've seen in the last year is that at least in Romania, your biggest market and by far, it's almost a household name, Purcari as you can see it everywhere. I guess you count more and more to keep the premium on the new lines you've just launched, and I can say that they're really premium. As I tasted them a lot. How do you see this evolving?
Since you have so much of the brand on the Romanian market, I almost can't see where it can grow anymore. How do you see this, keeping the premium and also, being strong in volumes on the Romanian market?
Well, there's that's a very good question. One is Romania, but also the group overall. In fact, we've. It's interesting that you say that Purcari is almost like a household brand or household name. We didn't have the concern, but we wanted to gauge the perception how and how young the brand is in Romania. In fact, we've done a quite extensive and advanced market research on our brands and versus, of course, our co-competitors. What has proven is that Purcari is still a very young brand. We are definitely not in the risk of becoming this old brand that everybody knows, "Oh, it's Purcari." No, we are still very young, we're very fresh. We're being very perceived very positively.
Definitely we can, you know, there's a lot of room to keep pushing and increasing the sales of this brand. From awareness perspective, there's still room to grow awareness in Romania, number one. Number two is, if you look at our share overall in the market, we only have 10% market share. There's still room to gain market share. We want to do this through growing Purcari, but we also want to do this by growing other brands such as Bardar, which is picked up, such as Domeniile Cuza. On one hand, we want to grow Purcari.
We want to create premiumization in Purcari. We want to grow both volume but also price. Domeniile Cuza, in fact, the purpose of Domeniile Cuza is to come and to cover the price segment that Purcari is leaving when it moves up in price. That's why we're coming with Domeniile Cuza. We're pushing it hard because we want to grab whatever Purcari leaves behind. Bardar, so it happens that the brandy segment in what the brandy segment in Romania is somehow underutilized, underdeveloped. It's proven that we are actually building this category with Bardar and quite successfully. This when it comes to Romania. I forgot of course about Crama Ceptura.
With this, there's still premiumization that's available at Crama Ceptura. Right now, for example, you see Astrum Cervi at around RON 15. Our competitor, our direct competitor, which was Schwaben at also RON 15, now moved to 17 or more. We have now space to come and cover that space from behind with price increases. Overall, we still have room for growth in Romania. We've also added Angel's Estate. Angel's Estate is a premium brand. It sells at an average price even slightly higher than Purcari. Overall, we've acquired a company which is, you know, everything is, you know. The good thing is that we have where to fix. We bought it with a bargain. As you can also see, it translated into this bargain purchase.
Net contribution of RON 15 or RON 14 million. Very importantly, the brand Angel's Estate is perceived as a high-end brand, as a premium brand in Bulgaria, and we can build on that. Overall, as a group, we have where to grow in our existing markets, but also we are growing in other markets. You know, we've exported Purcari in total wines in United States. We've started large partnerships with players in Turkey. We are constantly developing Asia, Japan, South Korea, and even China, because China is a continent. You could almost say China is Europe. There's huge potential. Overall, as a company, we have where to grow, but even so in the home markets as we would call them.
Thank you. Thank you very much.
If I may.
Sorry.
That's a very important question. I really want to add to this. This is one thing we keep thinking a lot about, how to preserve the premiumness and relevance with the brand and the use of the brand while scaling it massively, because sometimes you cannot get two. Just to comment on main. The first, as Eugen said, it's a very young brand perceived in Romania. The research we've done, we've just completed our annual research, shows still the NPS very high. You know, the trendy people in Bucharest still see Purcari as a very kind of, up and coming brand. There's no sign of brand fatigue or anything. A good example, and, internationally, you understand we're still only scratching the surface of global market. A good example for us is Penfolds.
Penfolds is an Australian brand that has sales about $800 million per year. You understand $800 million. You understand this is Purcari. Just to put it in context, Purcari is selling at 20 times less. I'm repeating only the Purcari brand without the other brands. We have a very, very long way to go, you know. Penfolds is, in a way, the benchmark for us. A premium brand with global appeal that manages to combine volume and premium perception because Penfolds is moving very high volumes. They are selling about 40 million bottles per year. Four zero. Very high volumes.
Thank you. Yeah. Yeah, this is a good problem to have, to manage Purcari brand, even if I think it's somehow it makes you nervous to see that you're over-relying on just a single market and a single brand with Purcari and with Romania. I would like to take the opportunity of seeing Mr. Bostan here and saluting him. I would just want to ask him something in regard to the security in the region, in Moldova.
I guess, the energy and the energy transition is just as much a security issue, like, say, a full-blown invasion by the Russians. I see Purcari already started with that program with 15% to cover its energy needs. I think Purcari could do more than that. I wanna see if you can see Purcari as a leader in this regard, and if the community, business community in Moldova is full aware of what they could do as a business community in alleviating this threat of over-reliance on Russian energy. I would like to see what Mr. Bostan has to say in this regard. Yeah.
Uh,
I don't mind. Yeah.
Uh,
Maybe I'll a little to translate. The short version is that we will keep investing in renewables. We expect to increase that 15% you mentioned quite significantly, actually. The payback on that is quite high. Mr. Bostan gave the examples of the partner plants who will be introducing photovoltaic panels to the production there. Importantly, we will work on, also on the recuperation technology. This is because as part of the production process, we, in some parts of production process, we have to use heating, for example, you know, in branch distillation, for example, but also thermification for wines. In some parts of the production process, we have to use cooling. Energy is used in both cases.
We're looking at the very advanced options of channeling some of that, you know, heating, cooling, energy actually, in the right direction so that we compensate.
Thank you very much. Do you have a target of achieving 100% of renewable or you don't yet?
I think that's our target, I think. That's, by the way, a realistic target because at the moment, the payback from solar as in Moldova is, you know, just around three years with the current electricity prices.
When can you see yourself of being fully independent?
We're not ready to give an exact number, but within five years we expect to have a majority of our electricity being produced from renewable sources. That's a very safe expectation to make. I'll say one more last thing on security, because I feel our stock is beaten up by security so much. I want to stress again what level 2 by the U.S. Department means. Level 2 travel advisory is the same travel advisory as for Denmark, Germany, France, Netherlands. I'll tell you more. Hong Kong has a level travel advisory of 3. Hong Kong, based on the U.S. Department of State travel advisory level, is a riskier destination than Moldova. Again, level 2 is pretty safe really.
I just feel we're taking too much beating from all these press headlines. Let's trust the Americans. They know what they know, let's not get carried by all the security concerns.
Thank you.
Okay. Maybe we should be wrapping up. You know, it's been going for 1 hour, 35 minutes. Look, everybody, thank you for attending this session. It has been a very rich session. Eugen, thank you for doing such a detailed presentation. You, thank you for your interest in Purcari, and thank you for backing our company. Look, we take it with a huge degree of responsibility you're backing. You know, our attitude is always to meet and exceed the expectations. I think we've been trying to do this over the years, you know, exceeding our guidance. You know, under promising, over deliver, and we'll really set on keeping doing that. Thank you for backing. We'll make sure not to let you down. Thank you very much.
Thank you, everyone. Thank you for being here.