Half-year report: Semper idem Underberg AG continues growth - consumer crisis and cost increases cloud expectations

Despite the ongoing consumer crisis, Semper idem Underberg AG has once again bucked the trend and performed well in a volatile market environment thanks to its strong core brands: The Rheinberg-based spirits company posted a 2.8 per cent increase in sales in a declining market in the first half of the 2022/23 financial year (Apr. to Sep.). Compared to the same period last year, net sales rose from €70.7 million to €72.7 million.

"The increase in turnover is in line with our expectations. It was a half-year with extraordinary challenges," says Michael Söhlke, CFO of the group. Above all, the massive increases in energy and material costs had an impact on business activity. "The development of our own brands is all the more pleasing. Underberg and Asbach in particular are benefiting from the consistently pursued modernisation process."

Underberg and Asbach: disproportionate growth
Sales of the herbal bitter Underberg, for example, grew by 22.3 per cent compared to the same period last year. Brandy producer Asbach performed similarly well, with sales up 17.9 per cent. PITÚ presented itself as very robust: the broadly diversified range of sugar cane spirits recorded an increase of 3.3 per cent - and that in an overall declining market. According to Nielsen, the German spirits market lost around 2.7 per cent in volume in the first half of 2022 compared to the same period last year.

The Underberg Group is thoroughly satisfied with the development of its international business. "Here, we were able to achieve significant growth of around 9 per cent with our New Balance measures," notes Sales Director Thomas Mempel positively.

Weakening of domestic demand noticeable
Also highly relevant is the noticeable weakening of demand in German trade and gastronomy: "The dynamics have clearly weakened since October. We are noticing a certain reluctance on the part of consumers and end users. Since we do not expect a quick turnaround at the moment, we have made preparations," says Thomas Mempel. Furthermore, an end to cost increases by suppliers is not yet in sight. "There is a lot of inflationary pressure in the market, and political measures such as the energy price brake cannot yet be validly taken into account," Michael Söhlke sums up.

Outlook: Slight increase in turnover
The volatile market environment will continue to challenge the Group. "We are consistently addressing the issues, especially in procurement, product availability and production. Price increases will also be necessary as the general uncertainty remains high. Against this backdrop, we expect a slight increase in sales and adjusted EBITDA for the full financial year, slightly below the level of the Corona financial year 2020/21," says the CFO.

Overall, both board members see the Underberg Group in a solid position: "We have prepared ourselves for economically challenging times at an early stage and, as already happened in the Corona pandemic, we will overcome this very difficult phase thanks to our many strong brands in different price segments."