Welcome everyone to the presentation of the first half twenty twenty one results of Brukad Winery's PLC. I'm happy to show some good results today as I'm sure you've seen in the presentation, the documents that you have received earlier.
So let's get into it.
So as Eugenio mentioned, today we have a few participants from our side in the call. My name is Ogenko Mendan. I'm the Chief Operating Officer. We also have Victor Arapang, who is the Chief Finance Officer at the group and Georgina Battag, who you've just as seen the Head of Investor Relations. The agenda for today, I'll go very quickly through the overview of the group, our vision, our strategy and I'll do it quickly, but nonetheless, I do think it's important to keep reiterating what our vision is, what our strategy is and sort of to keep double checking that we are within the said vision strategy and is the formulas working to delivering to what our goal is.
So This is a good slide that shows the overview of the group. As most of you know, there are 4 companies and 4 leading brands: PORCARKAR, the premium brand, we have Camacaptura, Bostavan and Bardar. PORCAR, Bostavan and Bardar are wineries and production platforms in Moldova and Cramaceptura is a production platform and winery in Romania. On the top right side of the slide, you see the sales split based on the countries where we generate our revenue. Romania is still in the lead.
More than 50% of our revenue comes from that market. Now I'm sure many of you may see this as a somewhat a risk that half of our eggs are in 1 basket. Now as much as we want for other markets to gain up in sales share versus Romania. We're also very happy that Romania keeps this share of sales with its very good results. And of course, this goes out to the fantastic teams in the marketing and sales departments and of course the teams that produce these fantastic wines that we sell.
Another important addition in this slide is that we've managed to add on the left list the list on the left, we've managed to add another number 1. So until now, we were Boasting being number 1, which is the most awarded winery in Central and Eastern Europe between the years of 2015 and 2021 at Decanter. Decanter, we consider it as being the Olympics in the wine world. Well, already at half year, we are proud we can probably say that in 2021, Furqar will be the most awarded winery in the world at leading wine competitions international wine competitions. So this is a great achievement, not only further solidifying our status and our presence in the region where we aim to become champions, which Central and Eastern Europe, but it also places Porcar as a significant player in the wine business around the world.
So very quickly, when it comes to the to what creates the formula for success. We do see that we are operating in a very attractive market with a continuation of the shift from other drinks such as beer and spirits towards wine. And overall, we see that in our key markets, the wine consumption, especially in the segment where we are very strong in, which is the more, let's say, more premium segments, we see that the consumption in those segments keeps accelerating. And of course, on the other side, we come into the markets with a significant competitive advantage as we see it, both from the cost side, and the fact that we are in the regions we're producing in regions which are abundant in grapes as a raw material for our products, but also with labor allowing us to have a relatively low cost base. And we're producing wines from these regions, from these TLRs, wines of an incredible quality, which comes to be seen.
On one side, the way the experts judge us being number 1 around the world this year and also the way consumers judge us, as we'll see later on platforms such as Vivino. Now the core of our business model is affordable luxury, and that's the intersection of modern and cost competitive winemaking, being very agile and differentiated when it comes to marketing and, of course, producing very high quality to price ratio lines. Of course, these together creates that sweet spot where the consumers resonate with our wines, both in the way they enjoy our wines, but also the way they associate with our wines because not only do we produce high quality wines, but also we want to see them as ethical and inspirational wines. Well, our mission, you know, it is to provide consumers with this joy that our products can bring to their life. And our vision is to become the undisputed wine champion in the central nation Europe, not only through organic growth, but also acting as a consolidator in this industry, that means through M and A.
And how we're going to do it? Well, we're going to be hungry. We're going to be ethical, thrifty, which means we're going to be careful with our spending. We will be different than others and will be better than our competition. Now I was mentioning becoming the champion in Central and Eastern Europe through consolidation of a fragmented market and this chart keep showing that in industries such as beer and spirits, if you look at the top three players in specific markets, then those top three players hold a significant consolidated market share in those markets.
While in wine, this still keeps being a very fragmented industry, and we do see ourselves as being the company that can create that consolidation. And we can do that to the fact that we keep growing, we keep having high margins, so we keep retaining earnings, having strong balance sheet, which allows us to have the funds or liquidity on our balance sheets to seize on M and A opportunities, but also the ability to fund through other sources of financing in order to convert an M and A potential deal. Another strong chart and this chart keeps getting stronger and stronger. So I was mentioning what the experts think of us. So here it is on the left side.
We were saying decanter. We were the number one winery when it comes to medals received at the counter, again, what we call the Olympics in the wine world, while we've taken a massive lead in 2021, now with 103 medals at the country between the years of 2015 2021, so a massive lead when it comes to the region, Central and Eastern Europe. And on the right side, it's a very strong chart when you think about the fact that we have managed to keep growing our sales year on year on year. And with that, we kept receiving more and more awards at top international wine competitions. And here you see the cumulative well, let's say, the cumulative per year metals received a top 5 wine competitions in the world: Mummus Vinik, Concurma D'Alle Dubucel, challenged Esnaud Du Beurre, International Wine and Spirits Competition and Decatur.
So in 2021 and only at this 5 alone, we have amounted EUR 97 Metals. So this is a great achievement, and it just shows again the when I was mentioning about the competitive advantage that we have, keep into consideration that still our wines, even though of an incredible quality, they are still quite affordable to our customers. Now on the previous slide was what the experts say here is what the customers say. So one thing is to produce fantastic wines and of course, you also have to market those wines. And not only do we produce these fantastic wines, but also we are trendy.
We have trendy and interesting brands. So the consumers, they associate with our brands. You can see on the left the mentions of Purkari in Romania on Instagram. Prokad is still in the lead by a long shot comparing to other competitors. And on the right, we'd like to reference the figures from Vidino, which is this wine rating platform and now it's also becoming a wine marketplace.
But we like to mention the performance on this platform because it's these scores transpose what customers think in the market. So you can see that, for example, in Romania, Prokad, Prokad Wines have received 50 5000 times a score from a customer and the average score is 4.1. So statistically speaking, this gives a very good view in the market and on the brand perception and the perception of customers of our products and our brands. Staying a bit on Vivino. Again, we like to quote the figures here and we have the next slide on Vivino 2.
11 of the top 25 wines in the premium segment are for Caix. So you can see that we basically we dominate the premium segment. A good chart for a good visualization, which shows that our wines become more and more accessible and present in wider geographies. One perhaps good takeaway here is that we see other geographies starting to accelerate in the adoption of Percaud and in the way they are being the customers interact with this platform in ranking Percaud wines, by Ukraine. So we do see good dynamics there.
Overall, if you look here at the figures, we are still top one ranking in the world, and we see, for example, here 21% increase in this year versus last year. So overall, good indicator when looking at this platform. Now moving into the results. So here we are I'll say we are very happy to report 25% increase in the 6 month revenues comparing to the same period of last year. EBITDA has increased by 24% year on year and net income has increased by 31%.
So of course, these are all extremely good results. We see them as positive results. Now when comparing just Q2. So here, as you see, we're comparing the 6 months versus 6 months. But if we were to compare just the Q2 of 2021 versus the Q2 of 2020, then we will see that revenues have increased by 47%, EBITDA has increased by 41% and net profit has increased by 34%.
But of course, in this presentation, we prefer that we compare 6 months of this year versus 6 months of last year because we know that especially the Q2 of last year was sort of the Q1 that was where the effect of the pandemic was felt. And in fact, it was one of the Q1 in a very long history of Prokair Group where we saw a decline year on year. But if you remember, we managed to recover the quarter after that. So overall here, we're focusing on the 6 months. And we also want to compare not only versus 2020 but also versus the 2019 results because in a way 2019 was still sort of a benchmark year, particularly if we look at some of the markets that need to have that recovery, such as recovery from the pandemic effect such as China and Moldova.
So the increases when we look at 2021 versus 2019, the increase of the revenues will be at 21% for the 6 months versus 2019. EBITDA is increasing by 17% 2021 versus 2019 and net profits are increasing by 19% when comparing to 2019. And if you look at the bottom, you can see the margins. We are continuing to retain this healthy and strong margins with 33% EBITDA margin and 19% net profit margins, which we see also as sustainable as I'm sure perhaps in the question and answer session, we you can ask me questions about this and we can dive into it. Now here you see the market data when it comes to market data in Romania audited by Nielsen with primary focus on modern trade.
Now as you see here on the left, Percad as a group continues to gain market share close to 11% or at 11% market share in the overall market. But what's important here to mention is that these charts do not show the impact of Horika. In fact, they do not contain the data from Horika. And what's important, I want to mention here that even though on the right side, you may see a slight dip from 20 6 to 2024 and that, of course, is because last year, we were very strong in using the, as you say, come let a good crisis go to waste. So we even though we were hit in the Q2, we had a good recovery in the second half of the year, again, with great work from the teams in Romania.
But here what I also want to mention that what is not present in this chart because as I said Nielsen doesn't cover Horica is our very successful launch of Porcar Nocturne, it's a series exclusive for Horica. We launched this in Romania late last year. And already in the first half of this year, the sales from this series alone account for 3% of group sales. So this is an outstanding success. And in fact, with this occasion, I want to thank the teams that have been involved in launching this series, amazing wines.
So thanks go to the staff at the winery, but of course also to the sales and marketing teams in Romania that have made the launch such a success. This is a good chart that shows the strength that we have in the remaining market, but not only as a player with the market share, but also a player that keeps growing and still aggressive in the market. So on the y axis well, let's say let's start with the x axis. So on the x axis, you see the revenue growth in percentage. And on the y axis, you see the profit margin in percentage.
These are figures for 2020 for full year 2020, and these are also figures that we have pulled from public sources. Now as you can see that Purkar and I forgot to mention, of course, that the size of the bubble is the represents the revenues in 2020. So as you can see, Perkard is a very strong player with significant size of revenues in Romania, but also second when it comes to its profitability, but number 1 when it comes to growth. What's worth probably mentioning here is that you see Furcargia slightly smaller than the Rekarsh, slightly smaller than it is today. But here with Rekarsh, what's also accounted is their exports.
So it doesn't only cover their Romanian sales, but also exports when in fact for Percai, it covers our sales in Romania as a market. Now I'll go very quickly through this because I'm covering kind of all of these messages later in the presentation. So firstly, accelerating revenue growth, yes, we are sort of recovering to a sort of back to normal conditions. We are surpassing the 2019 figures and we show if we compare on a quarter level, as I mentioned earlier, very strong increases. Romania, still very strong leading the growth.
And in Romania, Perkar is the growth generator. And we also see recovery in Moldova in China. So Moldova in China were the ones that were hit in 2019 the most out of all of our markets. So for us, the recovery of those sales is important, and we see that happening. Not still yet to the 2019 results, but we see that as an opportunity.
In Poland, we're facing some headwinds, particularly from price competition and from price discounts of our direct competitors, but also through some effect from the Tesco restructuring being purchased by Neto. So we see some of that effect and that effect in fact over spilled there's an over spilling effect into the figures in Czech Republic as well. Embardar is showing strong figures and strong growth in Romanian Asia, good recovery in Moldova with some reduction in sales in Belarus, but that comes with a combination of the political situation in Belarus, but also with the fact that long term we're looking to focus more on the high profitability bottled sales of BARDA rather than bulk. So sustaining high margins. Again, I've mentioned the fact that we are confident on the margins that we are producing as a business to sustain them in the future, we had some effect when it comes to the improvement of the mix of sales.
So the fact that Pulkarem has been accelerating growth and Barda has been recovering, these two products are the ones with the high margins and of course they have contributed to an overall strong margins at group level. And also we have sales in China and Moldova recovering also markets with that generate high, we'll see the sales there have higher margins. Now we keep delivering on quality. And as I mentioned, so excellent performance of our wines at international wine competitions. Just in the first half alone, 3 35 Metals versus 158 Metals 1 in 2020.
But of course, I have to say that for this year, we've pretty much exhausted the wine competitions that are available. So this is pretty much the number of metals that we're looking to end the year with. We're very happy with the results of our sparkling with Cuvee de Procard and Rose Brut receiving gold medal at Concours Mondiale do Bucell and the Queve Albrut receiving the best of show whites at Mundus Vini spring tasting in 2021. Now we are committed to delivering value to our shareholders. And we do this one through of course, we're always looking at the fundamentals of our business.
So for us, the foremost of importance is to create a business, a long term business, sustainable business that can create returns for our customers in the future. So that's why, as we call them, the fundamentals, which is developing markets, developing products, increasing sales organically and growing through M and A is at the core of our focus. But also, we're looking at other things that are important to our investors. For example, were the increase of the share capital the doubling of the share capital earlier this year was done again with intention to provide value to our investors, particularly the retail investors. And that was not we do see that as enough compensation for investors.
So we have also gone with the issuance of a dividend in the value of TRY 26 NOK 1,000,000, which will be paid out on the 9th September. This NOK 26,000,000 divided by the 40,000 issued shares at the moment would amount to SEK 0.65 wrong per share. We started the buyback program, which was required to fulfill our obligations to the management when it comes to the stock option plan and the share grant program that was approved by the AGM. And the positive news is that through our divesting of our stake in Glafenstein and Company, we have received an additional cash amount of close to €1,000,000 which is part of that sales transaction. So the total now cash receipt from that sale of our stake in GCC is over €8,000,000 So going a bit more in detail in the financial number in the financials.
We've covered the revenue. So you see 25% growth 2021 versus 2020 and 21% growth versus 2019. Now what's positive to see is the dynamics of the gross profit. And as I mentioned, this is particularly because of an improved sales mix. When it comes to SG and A here, I can spend a bit more time and I can also ask answer questions in the Q and A sessions if you have some, if you have any for me.
But basically the dynamics in the SG and A has multiple components with various effects, so towards either an increase or decrease relative to last year's SG and A figures. So on one hand, the lower brand and trade marketing activities in the first half of twenty twenty one, we've had, of course, a positive effect on the marketing and selling expenses. That's when comparing to the same period of last year because, in fact, last year during the Q2, we kind of went all out on marketing activities on one hand to diminish the potential negative effect of the demand erosion given the pandemic situation, but on the other hand in a way anticipating a slowdown or more quietness from our competitors. And basically, we thought that the approach is to be a bit more active in marketing and gain on visibility and on awareness comparing to our competitors. Also this year, the SG and A expenses includes the remuneration of the sales teams that relates to achieving their KPIs.
As you can imagine, last year, the KPIs or the sort of bonuses or the KPI achieving related remuneration has been pretty much 0 because of the low performance in the Q2 of last year. This year, the teams have done a tremendous job in different markets. So this is represented in a slight increase in SG and A. Additionally, the long term management incentive plan with share grants and with stock options, which is approved by the AGM, has been implemented in the Q2 of this year. So the registering of this expense in one go has sort of had this a bit more skewed effect or this spike effect on SG and A.
So overall, the SG and A is at 24% of revenue. However, if we were to adjust to this, we can call it one off event of this equity settled share based payment that has been applied in the Q2. So the adjusted SG and A would show an improvement to being 20% of revenue versus 21% of the revenue of the same period last year. So 1 percentage point decrease, which shows that nonetheless we are still very much in control of our expenses. Now if we look from the performance of each market.
So in Romania, the international key account performance has been very strong. We also saw strong recovery in the fragmented trade. Purkar has led the growth. So Purkar has had very good sales in the first have, but so had the Gramachapura brand and BARDA. As I mentioned, the very successful launch of Horeca exclusive for KAR Nocturne series has had a strong contribution.
So overall, you see here 29% increase in Romanian sales versus 202060% versus 2019, overall share of sales of 53%. We're happy with the rebound of sales in Republic of Moldova. We're still under the 2019 figures, but we are in close contact with our partners. So we keep sort of, so to say, the pulse on the market and the feedback is that the sellout, which is the sales from the shelves or at least from our partners to the retail accounts is showing good dynamics. So we're waiting for this lagged effect to reach us.
In Poland, as I mentioned, we did face strong price discount activities from our direct competitors that are competing with directly with our brands almost on a copycat scheme, we don't yes, we acknowledge the effect that this had on our sales, but we do see that the long term will be beneficial to us, sort of similar to what happened last year when in Moldova, we decided to not go and be very active in strong discounts because in the long term, we do see that this has a brand perception erosion effect, even though you may have some short term of short term positive effects. So we have abstained from very deep discounts in Poland. But nonetheless, we're working with our partners, and we do have some activities that are planned both on trade marketing and on brand marketing side. And these are planned for the second half here. As I mentioned, the Tesco restructuring continues to have a certain effect with the overspill also to the Czech Republic figures.
Asia, it shows strong recoveries still under the 2019 figures. We see this still as a potential. We do have large projects that are being rolled out with our trade partners later this year. And in fact, some of them are being rolled out. So we are being more active in digital marketing with the support of our partners.
And also now that the restrictions have most of the restrictions have been removed in China. There's more and more activity in, so to say, trade shows and presenting our wines to potential large customers. And of course, to mention that China is one of the markets where we have local presence. So we have local staff there, local meaning also Chinese. And we're waiting for more restrictions to be lifted so that the our, so to say, internal staff can revert to being present in China as well.
When we speak about Czechia and Slovakia, we are managing to hold sales despite the effects of this Tesco restructuring that I keep mentioning. We're yet to ramp up sales through our new distributor because somewhere towards the second half of last year, we started with a slow in out process with an additional distributor, and we're still yet to create that ramp up of sales through that distributor. But the positive news on the other hand is that we are igniting sales of Percada wines through distributors, but also through 8 wines, which is the e commerce wine retailer in which Perkard Group has acquired a minority stake earlier this year. In Ukraine, we have even though the numbers here may show is 6% increase, overall, we have a very positive outlook on Ukraine, this 6% is more than 6% increase is actually a combination of a strong double digit increase in Pokar sales and a slight slowdown in Bostavan sales. So overall, if you were to think from a margin contribution, yes, here you'll see maybe 6% increase in overall sales.
But from a margin contribution, we are looking at double digits increase. Overall, in Ukraine, we are working on, let's say, a more aggressive approach to our activity in Ukraine. So we have opened a trading company in Ukraine, and we now have local staff there. So we have, so to say, a country manager and then we have staff dedicated for trade activities, for brand marketing activities and for working with the channels. This is the beginning of developing the formula, as we internally would call the Romanian formula.
So the Romanian formula has worked extremely well, as you can see, until today, and we want to extend this approach in Ukraine and that requires local presence. So this local presence also has some benefits on the cost side too and also on the control in the market because then this trading company will perform importing activities of ROIs and also would, so to say, capitalize all the investments in listing fees and similar costs in the market with the retailers. Changing a bit the direction of perspective. Now if you look at the brands versus the country. So first, PUKA.
PUKA is showing fantastic results across all important markets. So we see growth in all markets versus 2020, but still behind versus 2019 in Moldova and China, the markets that were mostly hit in 2020. We see promising results in Poland. So the sales keep increasing, and we have a planned acceleration for Poplar in Ukraine, where we have already engaged with the from local marketing agencies, and we have a marketing campaign ready to be rolled out as we speak. And then here, I guess, what's also good to mention that with PUKAR, we see this strong growth in the different markets where we are already having this strong presence, but also the fact that we started our cooperation through also being an investor in the company 8 wines, this opens up the geographies for us where the Pukkadu wines are pretty much available in all European markets, but even beyond.
So I can tell you that Pukkad has also been shipped to Australia. Bostavant, so what we see with Bostavant is that the focus needs to remain and still remains on the long term or medium term premiumization of this brand. And we have a good strong pipeline of products that were planned to launch in key markets such as Moldova, Romania and Ukraine, what we see products that already have received a positive review from customers and focus groups. So we do want to create this premiumization effect in the future, entering more and more premium segments, thus solidifying our position of Bostaban sales. And you can imagine Bostaban is accounting for nearly half of the wine production of the group when we speak in volumes.
So you can imagine that the ability to create premiumization an increase in price or increase in the average price of the sales mix at this winery can have significant impacts on the group's margins, gross margins and beyond. When we look at Caramacapura, so Grammatica Pura has shown healthy growth of 17% versus 2020 and 31% versus 2019. We see good dynamics in Romania, but also what's good to mention is that it's good to see that the exports in China, the UK and Germany and markets such as these are picking up. With BARDA, we see a recovery in Moldova, strong sales in China already above 2019, very much above 2019 and also very much above 2020, so very good dynamics. In China, we are accelerating in Romania.
We have this slowdown of sales in Belarus. But again, this is due to that political instability that we see in Belarus and also with our focus being more in selling bottled wine rather than bulk. I thought I'd rub this in a bit with the fact that Pukar is the world's most awarded winery in 2021. And again, this is a message for the customers, but also a message for our potential partners in markets such as the U. S, such as China, such as Japan.
So a message such as these where it really places Purkaj as a player, as a strong significant player around the world globally. It's a message that will help us in developing markets and developing our sales across markets with high potential such as what I mentioned U. S, Japan and other perhaps markets in Asia, but of course also in Europe. Now I'm focusing a lot on Purkar and on the quality that for Car shows over the years and how it competes against other leading brands across the world. But I also want to mention, I spoke a bit about Bostavan.
And here, I want to mention that, in fact, the quality of Bostavan has had a significant gain in quality through some recent investments in our production equipment. And in fact, the quality of the wines, the recent increase in quality of the wines is already appreciated by experts, including that international conscious, but also by customers. So again, the theme here is premiumization of Vosteban is ongoing, and this is strategic direction for creating the growth and maintaining our margins. Just a bit on the fact that on the marketing side, we stayed relevant. So of course, we made ourselves hurt a bit with the fact that Ricard is the world's most awarded winery.
Then we like to be involved on the CSR side and different sponsorships, particularly in this one where we sponsored the Moldovan team, we've been the general sponsor of the Moldovic Olympic team. So PUKA has been the company one of the companies that has facilitated the presence of our athletes in Japan, and there's a great picture. You've probably seen it somewhere on the social media, maybe on LinkedIn with the medal winner celebrating with 1 3 liter PUKARI Sparkling. We had some viral campaigns earlier this year, receiving millions of views in social and digital mediums. And of course, we want to revive one of our traditions, which is for Cara wine run, it was didn't happen last year, but this year it will happen, and we're looking forward to that success.
Another very positive thing, more of a macroeconomic political is the recent stream of wins of pro democratic and pro European party, which is PAS. Firstly, Maia Sandoz has become the President last November, the President of Moldova. Then following that on July 11, this party has had a landslide victory in parliamentary elections, now having 63 seats out of the 101 parliament seats and the appointment of Natalia Gavrilica, the new Prime Minister of Moldova, another technocrat and very pro Western and modern viewed politician. And of course, also Igor Groso, the Head of Parliament, all of these people with this Pro Western views with the focus on the rule of law and the judicial system being functional in this country and in this area. But of course, their close alliance to the Western world also means that we are looking at potentially some improved trade relationships with some markets, but also potentially some the traction of certain EU funds for the development of the country, including for the wine industry, through which we may be eligible to benefit from this as well.
So covering a bit the outlook for 2021, we mentioned in the last call that after the first half, we'll consider whether to review the 2021 guidance. Now of course, you're seeing here that we have beaten the guidance for the organic revenue growth, we mentioned is 12% to 14%. We are 25% now. And also on the EBITDA margin, we mentioned a guidance of 28% to 30% for the year, and we are 33%. Now the first question would be like would we consider revisiting these guidelines and this guidance.
And at the moment, we're looking to maintain this guidance. Now note that we do not believe that we can maintain these results for the rest of the year, but we still want to remain prudent because even though now we're comparing we are now comparing to a relatively slower first half of the year twenty twenty. And when we look at the second half of twenty twenty, if you remember, we made some significant recovery following the Q2 dip in 2020. So that significant recovery means very strong sales figures. So we have a high yield to climb and to beat the figures of last year, and we are planning to do that.
But nonetheless, we do not want to overpromise something, and we prefer to stay on the side of under promise and over deliver. From the revenue growth side, as I mentioned, it's we'll be comparing to a very strong second half of last year. And on the EBITDA margin, we do anticipate a potential impact of the fact that last year, the harvest was relatively poor. That's one of the poorest harvest in recent years. So of course, that poor harvest has translated into or will translate into higher cost of sales as the wines that have been produced with harvest of last year will start to get sold.
So that's why we prefer to stay prudent when it comes to these figures and these guidance. I guess this is the presentation of the results. I want to thank you for your attention, and I'm happy to open for the floor for questions.
Ladies and gentlemen, we may start the questions now. We can do either to write down your question in the chat or you can unmute yourself and address your question directly.
Of course, the fact that before this, we were doing the calls with just through the phone. Now it's very nice. We can potentially see each other. So feel free to also to put the camera on and so that we can see each other as well. As you want, no pressure.
Hi. So maybe I'll start. This is Chris, although it says on the margin. So first of all, congratulations on good results. And we mentioned that this harvest in 2020 was poor.
And I think now climate change also is impacting the industry, right? So do you see warming climate as a threat or rather an opportunity to you?
That's a very good question, Chris, and thank you for this question. In fact, we do see this an opportunity. We see it as a threat. We must not overlook this, but we also see this as an opportunity. In one of the slides in other presentations, we do show the wine belts.
And we show that, in fact, with the warming of the climate, in fact, these wine belts are moving more and more towards the poles. Now the good thing is that the parallel at which we are, we are more on the sort of the upper side of this wine belt. So in fact, risks such as freezing in early spring are becoming less. So we have a benefit from that. Now the drought, of course, may become an issue for us in the future, and this has been the issue last year.
So on one hand, we have a decrease in the risks such as frost, but on the other hand, we have an increase in risks such as drought. And for that, the mitigation for such risks are implementing irrigation systems. And this is something that we have planned to do. In fact, for Bozovan, the initial plan was to make it happen this year. But given certain on one side, priorities on CapEx on capital allocation, but on the other hand, also the fact that this year, it was clear from the start there was no need for an irrigation system just this year alone.
For us, the deployment and the implementation of such an irrigation system will take around 3 months. So we know that if we start such such a deployment of such a project somewhere at the end of the year or early next year will be in time to mitigate against, I don't know, some risk of drought in 2022.
Thank you.
If there are no questions, maybe I'll find a subject that is not covered in the presentation.
We have few questions in the chat.
Sure. Right, so what is the difference in price as percentage of the same wine sold in different countries? In fact, our one element of our success, this is the question by the way from Valeo Rin Sabo, something that perhaps is not doesn't transcend to all the figures in our results is the fact that one element of the success not only in a certain market, but also in the region is the fact that we have a relatively a robust pricing policy. So the only places where you would see perhaps an increase or the price being slightly higher than what we call in our home markets would be when, for example, when products are being sold either through online due to shipping costs or in markets where the route to market absorbs more costs such as, for example, the U. K.
But overall, we have a relatively strong and stable pricing policy in order to not create this balance among, on one hand, different channels in one market, but also different distributors, large distributors for different regions. So overall, the difference in price is minimum. Moving on, I think I've answered. You said that harvest of 2020 was low, that only means high quality of wine. Exactly, yes.
So on one hand, yes, it means a higher cost average cost for the wine produced from grapes of the 2020 harvest, but we're looking at an amazing vintage and we're already seeing some amazing wines being produced from that year. What about the harvest of 2021? Do you see better volumes for this year? By all means. So this year, the harvest is looking significantly better.
We're looking to approach somewhere the 2019 harvest figures. So this year is looking much better. What is your view on the inflation rebound in Romania and in other markets as regard of your ability to pass on the cost increase to the customers, particularly in terms of sales and margin stages. So what we see when it comes to inflation is that, of course, as inflation penetrates into different product category, it would also penetrate into our category. When we are looking particularly on the exchange rate between hard currencies such as euro and dollar versus other currencies such as Moldovan leo or Romanian leo.
We have sort of a hedging on the fact that though a majority or a good portion of our revenue is in local currencies, so to call revenue, Rommel, Ron and Moldovan, Leo. A very good portion of sales are also in euros. So that, of course, gives us sort of this mitigation against, on one hand exchange rates, but also inflation in some of these markets. Okay. So what is the expected CapEx stand in 2021 2022.
So the expectation for the CapEx this year would be somewhere around SEK 4,550,000. So that would mean 2020 to 'twenty five sorry, I'm going back €4,500,000 to €5,000,000 if I said it wrongly, so €4,500,000 to €5,000,000 which equates to, say, give or take, SEK 20,000,000 to SEK 25,000,000?
I have a question on Bostav 1. You mentioned you had a large Investment in the bottling plant there. And now you talked a bit about the premiumization Of the brand. When do you think that you will be ready with Operational efforts and start the sales and marketing efforts for Bostavan. I'm referring to the fact that Now there is a bit of stagnation in the brand sales.
And I was wondering when Should we expect to see the same double digit beautiful numbers in growth just as for
So the efforts the first the answering the first portion of your question, when are we planning to exert the efforts into promoting these products? It's imminent. So it's happening pretty much as we speak and in the next month. So we are looking at launching a few new products from the Bostavan winery and there is, let's say, the full attention is given to creating new brands and sort of dissociating ourselves with Bostaban because changing customer perception, even though you have now these very, very high quality wines, the customer perception to be changed is not that easy. So we are launching these products as we speak in key markets, which is Romania, Moldova and Ukraine.
So in the next month or maybe 2 months, you should see them already promoted and potentially on shelves. But in order to see those double digit growth that you are mentioning. Now we still intend to keep pushing double digit growth on, let's say, let's call it the core Vostavane product portfolio. But of course, for the new portfolio, if I were to call it the new portfolio, for it to have a significant share in the overall sales of Bostavan and to have that effect even though it may grow on very high double digits or maybe at the beginning it will be not double, but triple digits growth for it to start becoming significant in the total portfolio of the wines that are being sold from this, why no, this may take some time. So this effect and this premiumization road is a medium to that's more of a medium term, so to say.
So this will take a few years when this effect is really felt. But we have to start it now so that in 3 years, we look back and we know that we started it when we were supposed to start it and we start reaping the effects then.
Thank you. And an additional question on Porcar, seeing the high growth, Will you need significant more investments to accommodate that growth? Are you comfortable that you can manage to have capacity to replicate that growth in the following years?
That's a good question. Thank you for this question. The capacity comes from well, the capacity and the potential bottlenecks have a few stages. The first one, of course, is sourcing the grapes, the high quality grapes for Porcari. Until recent, Porcado was 100% exclusive on grapes.
Recently though, we started to look at purchasing also third party grapes from the Prokad area and from the Stefan Borde wine region. These, of course, purchasing third party rates is done with partners that we have a very close relationship. We subsidized them through the years and we ensured the very high quality of grapes. So that's how we are we're mitigating the capacity needs on sourcing the grapes. Then on the processing, storage and bottling, we have no bottlenecks because somewhere last year, around mid of the year, we have opened a new production section at Pukai.
So now we've increased both our processing, storage and bottling capacity to 10,000,000 bottles. So until 10,000,000 bottles, we have room to grow without any hindrance. And even beyond that, you probably don't know, but before this line, this new bottling line being opened mid last year. The teams at the Brucayar winery sometimes working 3 shifts, so they're working overnights. So we're in 3 shifts by 8 hours in order to keep with demand.
Now this is, of course, not the case. So when I mentioned 10,000,000 bottles, is 10,000,000 bottles without any additional pressure on the workforce. But should we reach should we cross 10,000,000 bottles, we are able to we're still able to supply for such demand.
Sounds great. Thank you.
Thank you. Sure. Hello. Can you hear me? Yes.
Good. In regard in continuation for the previous question, there must be somewhere a limiting factor in the growth of this extremely successful brand For Kyle. And I mean, it is though the you can only have that much Grapes harvested in that region. Isn't like that? Or how Because you said you have already a lot, but there's no problem with the processing and The rest?
Yes. No. So when it comes to sourcing grapes, again, as I mentioned, for a very long time, Porcado was own grape only. But with the approach of allowing to source from very close parties, 3rd parties that work with regard to now to supply additional grapes. This is not a limitation.
Let's say, we don't see a limitation or any risks in the near future near to medium future.
So you have grapes from you can have grapes from anywhere, you mean in Moldova?
Not anywhere in Moldova, but in that wine region. So we
In that wine region.
Yes, there are 3 wine regions in Moldova, which is caused by our with Rayan and Stefan Bode. And within Stefan Bode, we now allow ourselves to source these grapes. But at the same time, every year, we're planting more and more of our own vineyards. So we've planted some vineyards last year. We planted some more vineyards this year.
Of course, it takes 4 years to be able to get the first harvest from a new plantation. So in 4 years' time, we'll see that our the vineyards that are in our operations that create harvest will increase, and we're planning to keep doing this year over year.
Can you tell us which is going to be the brand you'll use for Postavant? Or it's still a secret?
Well, I prefer that maybe in the next call, we even do a presentation on this because I'd like to see some initial sales. Why? Because we know that a good some the audience for these calls are also our competitors that want to gain some
What about Dor? Are you keeping that brand, Dor?
Yes. So Dor, we are keeping. It's we've recently we rebranded this wine completely, and it's being launched as we speak. So we've done a full rebranding, a full re positioning. So basically, we are reinventing this brand altogether.
And we are launching it as we speak in Moldova.
And I don't want to monopolize, but I'd like to stay a little bit on this side of the branding story because I guess Even yourself, many people have been surprised by the Extraordinary success that Furkar has and that's conquered the Romanian market. And I guess, how do you see that? What was the It was in the name, it was in the what was the The formula success?
What made Prokazio?
Yes, yes, yes. Because it's evidently that it's very hard to replicate that As much as you will try, but it's going to be hard.
Yes. Well, let me start with the fact that the history of Furqay started in 18/27. So Furqay has this great legacy and heritage of how we became more than winery than it is. So 201827, the year of its foundation. Then in 18/78, Pukar already won its first so Negro de Pukar, which is the flagship wine from our portfolio.
In 18/78, it already has won the gold medal at at Bordeaux wine contest. So already in 18/78, it has placed itself as on this world map of top wines. Then there are sources, different sources that Tucano was even the preferred wine of Queen Mary, so before Elizabeth. And it's in all the line that's present in the private collection of Prince Charles.
I'm sure they've made they played the role, but
So I'm getting
Not every Romanian that bought a full car knew all those things. Yes, of course.
So I just took some opportunity to give a bit to the history. Because at the end of the day, wine is not just you don't sell the product. You don't sell a product that just gives or an elliptic sensation, but it's also a product that comes with a history and a story behind it. So in 2004, Mr. Vito Bostancu, the founder of the modern Pukari winery and Pukari Group, he is sort of the legend and the head figure in Moldova and Romania?
It's a pity we don't seem too often On the conference calls and things like that. But yes, continue, please.
Well, Mr. Bostanz, perhaps English is not appropriate to go into the discussions, but he's very much at the helm of this group. And his most important contribution is to the production of wine, to the quality of wines that are being produced. So with his direction, Purkari has grown to what it is today. And at the core of this is extremely high quality wines delivered to customers for an affordable price.
Of course, I can go a bit more in the history how Tokayo was the leading exported to Russia, then the embargoes, then the folks moving
to Russia.
Yes. Well, I'll finish with that. And The proximity with Ukraine, which is opening up so much now, and It's always kind of I ask myself why you could not replicate In any way, the success you had in Romania or even on some further away markets On this Ukrainian, they don't like wines. Actually, they have a great winery a little bit further east. But I don't know how the how their tastes are.
But anyway, it's a big market, it seems to me.
Well, look, if we speak about Forkaris, Forkaris alone has grown 26% in Ukraine this the 6 months versus last year. And I would say in the for sure more than 50%, but I would say close to 100% growth for KARIA alone in Ukraine versus 2019. So your conclusion that the success there is not as is Romania right now because we're happy to see Romania keep growing at 25% or 29% year over year pace. But Ukraine, in fact, is showing very good adoption of Brucado wines and is becoming really a trendy product. And in fact what we're doing now, we want to support this full effect that we see in the market.
And the way we want to support it is with local presence to replicate the Romanian formula. So it hasn't been done until now, but we're doing it now. And in fact, we're not looking at doing that only in Ukraine. We're looking to do that in the Baltics and we're looking to do that in Poland. So we know that maybe for some years, the reliance has been on growing these few key markets such as Moldova, Romania, Poland though Prakade was not present there and Czech Republic though Prakade was not present there, Baltics though Prakade was not present there.
But now if you look at Fukaya's presence in those markets that I mentioned that they are not present. In fact, the sales are accelerating for in the Baltics, for example, for Carc has already I want to I don't want to mislead, but it already has surpassed some other markets that were fairly significant for Prakash, and we see success there. So for Ukraine, we do see a strong opportunity, and we are continuing the growth of KUKA there. And the opportunity in Ukraine is through the fact that unfortunately for Ukraine, Russia has done this aggressive move of removing or let's say, annexing Crimea. However, 50% of the vineyards of Ukraine were in Crimea.
So players like Inkerman and such, the total surface of vineyards of technical vineyards for winemaking in Ukraine is 60,000 hectares. Now 30,000 were in Crimea. So now with sort of this depletion of supply, we see a further opportunity there. One opportunity is for us to push our products from Moldova, but now also from Romania. So we're looking at from Kramachaptur as well.
But the second one is on the non organic, so the M and A side. So of course, we are careful that we're assessing the risk, the political risk, because we have opportunity costs where we could invest in other areas and other regions. But there's also an opportunity to actually do an M and A and create a local champion. And here I mentioned another sort of side route of our M and A strategy because on one hand, we're looking at let's say, if we look geographically, our M and A the spectrum of our M and A focus incorporates also countries such as Georgia, such as Croatia, such as Czech Republic. Some of them are with the focus of perhaps export rather than local consumption.
Georgia would be an example. But then we're looking at regions such as Bulgaria and such as Ukraine for an M and A or for different formulas of entering those markets to create a local champion. And with our expertise, for example, if we were to look at Bulgaria and we've done a full analysis of the full wine shelf. And we have plotted we basically plotted the whole wine shelf in Bulgaria. And we do see that when we look at quality versus price, we see that the with the quality to price ratio that we have, we can become local But of course, Bulgaria being a wine producer, the strategy is not to export from Moldova in Bulgaria, but actually to produce local wine there and basically create a local agenda.
And that similar can be done in Ukraine.
Thank you.
Sorry, I've gone a bit in more details. And we will try to rely not on luck but on our expertise. Thank you.
Thank you.
Thank you. Hi.
This is Juliana from Morgan and Company. I already included some questions in the chat. I thought I just want to make sure that I get the time to ask them. Although the discussion on Ukraine was indeed interesting, Should I just go through them?
Yes, please. Juliana, we always appreciate your questions.
First, a very short one. You're mentioning that you received another €1,000,000 for the from the glass container company. Will that be included in the P and L in the Q3?
I'm not sure if we have Mr. Victor Arapan, the CFO here. Perhaps he can elaborate more on the way the transaction is reflected. But here it's a bit of a combination on the fact that we have created some provisions for some we have retained the recording of some, let's say, beneficial effects of the transactions and they are reflected in different periods. But perhaps Victor, you can elaborate on this, please.
Yes. Thank you, Jan, for the question. The transaction Okay. On July 30, so it is not yet reflected in the P and L of the company. It will be Recording in the Q3.
So the full but what does that mean? We'll issue the full EUR 1,000,000 reflected in the P and L?
Yes, this amount of you mean you speak about the amount of €978,000 we received From Metropark, yes?
Yes, yes.
Yes, this full amount will be recognized in the P and L in 3rd quarter.
Okay, great. Thank you. And you're mentioning in the presentation as well that 2021 harvest was good, not like the one in 2020. Should we see an impact on margins from that? Can you estimate what the potential impact on margins could be?
Well, from the 2021 harvest, we're looking to refer to the usual margins that we are used to. So in the areas of 50% gross margin and then the third is for EBITDA and the 24% for net profit. So there is an impact there is a negative impact in margins from the 2020 harvest. And yes, there will be we're expecting some negative effect as the wines that have absorbed higher cost per liter from the harvest of 2020 will start being sold in 2021 for the whites and roses and 2022 for the reds.
Okay. And when we're looking now please go ahead.
So I wanted to say I think you asked about an estimation of the effect. Of course, this is it's a more advanced modeling to be a bit more precise on the margin the negative effects on the margin from this harvest because, of course, it's an amalgamation of different harvests, especially for the rents, but also on the because of the fact that we continue to push prices up where this can be done. And even though there will maybe be some cost pressure from the cost base, we will look to relieve this through applying increases to our pricing policies. Okay.
So you don't I mean, from your answer, I can understand that it doesn't necessarily have to be to have an impact on the margins.
We do not foresee a heavy impact on the margins, no.
Okay. Because anyway, in the first half of this year, the gross margin was very close to 50% anyway.
Yes.
And you're guiding at 50% in a good harvest year as well.
Yes.
And regarding Yes, the stock option plan that the impact of the stock option plan, SEK 5,000,000 in the second quarter. Should we do we expect to see should we see an impact in the second half of the year as well? That is not really a one off because I see there are there is another baguette program approved. When do we see any impact on that? And how does this work?
So I will answer, but again, I'll let Mr. Arapan correct me in case I say it wrong. But this is 75% of the what had to be allocated through the share grants and the stock options has been allocated. So that's why a hit has been received in the first half of this year. There's another some portions that we'll see being allocated in the first half of next year and then some of them in the first half of the year after that.
So this, let's say, spike will not be there anymore. Worth to mention here though that when we speak about these long term management incentive plans, their reflection on our books and our financials depends also on the price of the stock because, of course, we will speak, for example, on the options. Some options, they are in the money at different strike prices. So we have options that are in the mining at a strike price of ZAR10 and options that are in the mining strike price of 15% and others strike price of 20%. We are now at 1.15%.
So only, let's say, the first the onethree or the only the stock options that are with a strike price of 10 are in the money. Not the latest, remember that when this plan was devised, it was in 2,000 it was approved initially through the prospect and was approved by the AGM. The share price, if we were to convert into today's price following the increase of the share capital was at around SEK 9. Even the first portion was not in the money. So it just again shows that these kind of plans, they work.
It creates alignment with the management and creates an incentive that we are the top management, including some of the members of of the teams that have a direct impact on the success of our company do not only look at short term effects and perhaps reaching certain personal KPIs, but also looking at contributing to the overall well-being of the company in the medium to long term so that they can benefit from the value of the company increasing. Victor Arapan, not sure if you want to mention or to correct me regarding the impact of the allocation of these management incentives.
Okay. I can just add that we can estimate an impact in the second half of the year Around 15% in addition will be recognized in the P and L.
So 15% of EUR 5,000,000 or 15% so what we saw right, EUR 5,000,000 were 85% and it's 15% left.
It's about EUR 15,000,000 out of all share based payments Recognize in the first half of twenty twenty one, meaning from 6 Exactly EUR 6,600,000.
Okay. So EUR 6,600,000 Would be the total impact and we already saw 5, okay? Yes.
We will invest additional 15%, around 50%. This is not taking this is only due to the time frame. We will recognize it will make like an accrual. But if the price of the share will continue to increase, of course, this will have its impact.
It does depend slightly on the share price as well.
No, but so just to make it clear, so it's 6.3 should be kind of an estimate for the total impact, EUR 5,000,000 in fact that I didn't understand the 15% what that refers to,
And then
we are going to see an impact in the first half of twenty twenty two, twenty twenty three. That's separate to this. Yes?
Yes, this is separate to this So we expect to have an additional €1,000,000 around €1,000,000
In the second half, not 1.6 or just 1.
But without taking into consideration The possible increase in the price of the share, which will have an additional impact.
And so actually that means that anyway in the second half, the impact will become quite small from this. So in principle, we should see margins improving in the second half. I'm just wondering about the guidance because If you sell exactly the same, if your sales are exactly the same in the second half as they were last year, Full year sales are still up by 7%, 11% and your guidance is 12%, 14%. So I'm just wondering why are you so cautious? And same with margins.
At the moment, margins are somewhat in line with guidance, but taking off the assuming, of course, a much lower impact in the second half, margins should improve or is that not right?
We do still expect some pressure on the cost side from more expensive wines were more costly wines produced from the 2020 harvest and in general in 2020. So we would see some pressure on the cost side. And also we're prudent when it comes to the sales mix because, for example, in the first half of this year, yes, Furcark has been growing, and we do expect Furcark to keep growing. But we also do expect some bounce back of sales from Bostava in Poland and Czech Republic and Moldova. So again, overall, we do see that if we look at this guidance and also considering that 2020 second half was a strong 6 months, then our the way we see it is that this is a more prudent approach to setting the guidance.
It doesn't mean that we will not push to overachieve it. But at the same time, we don't want to lead into optimism that may not convert.
Because I'm looking that in the second quarter, you already sold in Romania about EUR 30,000,000. And that's already What you saw in the Q3 of last year. And of course, in the Q4, we see the 4th quarter effect. So that's why I'm just wondering why you're so You might be a bit cautious. Are you seeing restrictions in Moldova?
Are you expecting further restrictions in Moldova maybe?
And yes, and there's also the situation with the pandemic. We do not necessarily expect strong restrictions. But given that the uncertainty is still there, we still for example, Czech Republic was a market with restrictions for a good portion of 2021. So even though they were their figures when it comes to the COVID infections was very low. They maintained those restrictions similar in to a certain extent in Poland.
So we're yet to see how the situation with this pandemic would evolve. But overall, for example, if we speak about Romania, we had an extremely strong last year second half of last year, especially the Q4. But I'm looking forward to stand here in 3 months and then 6 months saying that, yes, Juliana, we should have been a bit more bold.
Thank you.
Thank you.
Can we have a few more questions via chat?
Okay. Let me find them.
Meantime, I will show to Jan Utsadhan. It's the next question regarding Divin. I will show What we are going to do with our cognac, our DYLAN, is at 20 years old and now we are launching 25 years old. Of course, it's a great product, as I said, Januzza Dan. And we have a lot of plans with this brand, especially we are more active in Romania and penetrating other markets.
So good things are still to come. Actually, it was the brand which has been mostly affected by the pandemic, but now it's recovering.
And in fact, it's good that the subject was diverted a bit to what's not a very, but went a bit towards BARDAR because we speak a lot about Pukari and the that Buckeye is the most awarded winery in the world this year. But also worth to mention that the Bardar, our brandy, Bardar 25 years has taken the TasteMaster and Brandy Master at Brandy Taste Masters Worldwide. So this is, let's say, the number one Brandy competition worldwide and the Bardar 25 years, has taken the number one spot. So also worth to know that. Again, it shows the fantastic abilities of creating this really amazing product.
Am I missing any questions? Okay. I think I've covered all the questions. Do you see any other questions that I haven't covered?
No, you have covered them, all questions.
All right. Well, if there are no further questions, I want to thank you for your presence. And let's see how the situation with the pandemic and with the restriction goes. We do look forward some more opening up of borders and opening up of abilities to travel. And once that is happening and we see that the moment is more opportune.
We're looking forward to host an investor event where we would see each other face to face. And for those that have participated in some of our wine battles, Porcar versus Parker, 2 of them, those were live and both of them we won. So you can imagine, Porcar has won against 95 points Robert Parker, which is the number one wine critic in the world. So we're looking perhaps to host another one of these bouts. And over there again to see each other face to face and for you to again taste the competitive advantage of our wines.
So thank you again for your attendance, and I wish everyone a great day.
Thank you.