Group of companies "Beluga" (MCX: SPECKLE) - the largest alcohol producer in Russia and one of the few domestic alcohol companies, whose shares are on the Moscow Exchange. Despite the fact that its shares have little liquidity within the Russian stock market as a whole, by the standards of food companies, trading volumes are quite high.
About company
The group of companies was founded in 1999 under the name "Synergy". Preparatory work was carried out until 2002, when they acquired the first enterprise - the distillery "Ussuri Balsam". In the next five years, they acquired five more factories. In 2007, we purchased the business cards of the group - Beluga and Belenkaya brands., at the same time, they held an initial public offering on the Moscow Exchange.
Since 2008, there has been a diversification of production: if before that exclusively alcoholic beverages were produced, then since that time the product line began to expand, first due to cognac, then wines appeared in the assortment, whiskey, rum. Since 2011, we have also focused on distribution, the first stores of the Vinlab chain began to open. Import portfolio began to form.
Composition of enterprises. The enterprises of the group of companies are mainly engaged in the production and distribution of alcoholic beverages.: JSC "Alviz", JSC Mariinsky Distillery, AO "Bastion", JSC "Ussuri Balsam", OOO "Georgievsky", Golubitskoe Estate LLC, OOO Beluga Brands, JSC "Beluga Market Arkhangelsk", OOO Beluga Market Vostok, Synergy Import LLC, OOO Beluga Market Khabarovsk, OOO Beluga Market Vladivostok, OOO Beluga Market Perm, Beluga Market LLC, Beluga Market West LLC, company "Beluga vodka".
There are also three non-core food production companies: JSC "Dakgomz", JSC "Meat-packing plant" Nakhodkinsky "", Roadstore Group LLC.
However, now there is a trend towards the sale of non-core assets. A special role in the group of companies is played by its own network of alcoholic beverage stores "Vinlab", which deals exclusively with retail.
Shareholders. The most significant share of PJSC shares is held by Cynexac Securities Limited (Synexec Securities Limited), which has been a shareholder since 2007. This is an offshore company, registered in the British city of St. Helier, the capital of the crown dependency of Jersey on the small island of the same name in the English Channel - one of the most famous tax havens in the world.
The composition of the shareholders of PJSC "Beluga group"
| Shareholder | Share in the authorized capital | Ownership of ordinary shares in PJSC |
|---|---|---|
| Mechetin Alexander Anatolievich | 0,2491% | 0,2491% |
| Molchanov Sergey Vitalievich | 1,47% | 1,47% |
| Nikolay Belokopytov | 0,3% | 0,3% |
| Ikonnikov Alexander Vyacheslavovich | 0,046% | 0,046% |
| Ordovsky-Tanaevsky Blanco Rostislav | 0,04% | 0,04% |
| Malashenko Nikolay Gennadievich | 0,0001% | 0,0001% |
| Bazhenov Vladislav Valerievich | 0,0006% | 0,0006% |
| Sycheva Maria Pavlovna | 0,00025% | 0,00025% |
| Erokhin Dmitry Viktorovich | 0,27% | 0,27% |
| Prime Gold Investments Limited Company (Prime Gold Investments Limited) | 0,37% | 0,37% |
| Saineksek Securities Limited (Synexec Securities Limited) | 55,31% | 55,31% |
| Tottenwell Limited (Tottenwell Limited) | 12,24 | 12,24 |
| Synergy Capital Joint Stock Company | 0,0006% | 0,0006% |
| Company "Beluga vodka international limited" (Beluga Vodka International Limited) | 0,001% | 0,001% |
| Joint Stock Company "Orient- west » | 0,004% | 0,004% |
| Anokhov Andrey Sergeevich | 0,0399% | 0,0399% |
| Joint Stock Company "Vinlab" | 0,0006% | 0,0006% |
| Prokhorov Konstantin Anatolievich | 0,11% | 0,11% |
| Zhmakin Maxim Anatolievich | 0,01% | 0,01% |
| Vasilenko Grigory Vitalievich | 0,08% | 0,08% |
What he earns
Own production and distribution. Beluga PJSC companies produce and import a wide range of alcoholic beverages: vodka, absinthe, balms, brandy, bitter, wine, whiskey, gin, calvados, tinctures, liqueurs, rum, tequila. Besides, PJSC "Beluga" companies are also distributors of cognacs made in Russia, Armenia, Georgia, France.
Raw materials for the wine and vodka and chemical industries are also produced.: rectified alcohol, fusel oil, head impurity concentrate, grain stillage. Among Russian producers of alcohol, the group of companies has the most diversified range of products.
The flagship product is the line of Beluga vodkas, by the name of which PJSC "Synergy" once became PJSC "Beluga group" for marketing purposes. It is the leader in sales in Russia among premium vodkas.. The line includes brands: Beluga Noble, Beluga Noble Night, Beluga Celebration, Beluga Transatlantic Racing, Beluga Transatlantic Racing Navy Blue, Beluga Allure, Beluga Gold Line, Beluga Epicure by Lalique.
Second, an equally important segment in the income structure is its own network of alcoholic stores "Vinlab". At the end of 2020, the number of these stores reached 640. Now it is the largest alcohol network in Russia.
Non-core activities include the production of soy products, sausages, semi-finished meat products, dairy products, wholesale trade in tobacco products, as well as distribution of premium glasses and other glass products of the Austrian brand Riedel.
Geography of production facilities. Production facilities are dispersed throughout Russia - this is the strength of the group of companies, this is how logistics costs are optimized. The main production sites are located in the Central, Far East, Northwestern, Privolzhsky, Siberian and Southern federal districts.
Flagship Enterprise, from which the company's business began, — Mariinsky distillery, city-forming enterprise of Mariinsk, Kemerovo region. This is the only enterprise, where the line of premium Beluga vodkas is produced.
Also significant elements of the production base can be considered:
- Arkhangelsk Distillery. Production of the line of vodkas "Arkhangelskaya", one of which received the highest rating of Roskachestvo;
- plant "Ussuriysky balsam". Production of a wide range of spirits, the largest alcoholic beverage enterprise in the Far Eastern Federal District;
- LLC "Plant" Georgievsky ". Tradition of quality ". Strong alcohol production, including the sales leader of the Russian vodka market, vodka "Belenkaya", located in ZATO Krasnoznamensk, Moscow Region;
- Chugunovsky Distillery JSC, Nizhny Novgorod Region. Production of raw materials for the wine-vodka and chemical industries and fodder grain stillage;
- wine-making complex "Golubitskoye Estate" in the Krasnodar Territory in the Taman wine-making region. Bought it in 2019, when the group decided to enter the wine market.
The strength of the company is the desire not only to diversify products, but also to provide technology, close to waste, as in the case of the Chugunovsky distillery, which, in addition to ethyl alcohol, is engaged in the sale of by-products of its production, up to the bard.
Barda - alcohol-free liquid, which remains after removal during the distillation of ethanol and a number of other products. Used in different regions of the world in the production of marinades, as a fertilizer, raw materials for feed production and in the chemical industry.
Taking the last factor, it can also be noted, that by virtue of, that stillage can be used for biogas production, Beluga Group may enter the list of green companies.
Geography of supplies. According to the company itself, throughout Russia it has more than 200 thousand outlets, while coverage is “from Kaliningrad to Vladivostok”. But B2B strategic cooperation with other enterprises is limited: in particular, the plant "Ussuriyskiy balsam" itself admits, that it only applies to the native FEFD, and cooperation with enterprises of the Ural Federal District is only planned.
With regard to export, the geography of deliveries is quite extensive: this is the USA, a number of EU countries, United Kingdom, Australia, Israel, Kazakhstan, Georgia, Kyrgyzstan, Cyprus, Baltic countries. But the range of deliveries abroad is rather monotonous.: these are almost exclusively vodka brands, with the premium line of Beluga exports accounting for half of sales.
It is explainable: vodka is the most famous among Russian alcoholic beverages abroad, which is considered by many to be one of the attributes of Russia. An undoubted achievement - the wide coverage of the premium brand of duty-free shops at 260 airports around the world.
The network of stores "Winlab" has a rather specific geography of coverage. There are two regions of concentration of chain stores: center of the European part of Russia, mainly Moscow and Moscow region, and Far East. Other regions are practically not covered by the network. This is connected, certainly, so, that the origins of the company from Primorye, where are its founders from, its headquarters is located in Moscow. So far, such a concentration does not allow a positive assessment of the diversification of Beluga Group in the retail sector.
Financial and operational results of recent years. As follows from the reporting of the group of companies, most of the financial indicators are growing. But in 2020, the rate of opening new stores of the Vinlab chain has decreased, although due to the transfer of a significant part of employees to remote work and the self-isolation regime, the demand for alcohol in Russia has grown.
But this trend was typical for retail in general in 2020 due to the general economic crisis and lockdown., therefore, it is hardly possible to see anything catastrophic in this.
The positive thing is that, which of the company's performance indicators demonstrates the highest growth in earnings per share, significantly outperforming other indicators, from which one can conclude, that the rally looks quite reasonable and there is no bubble in the market.
Annual financial and operating results, million rubles
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| General shipments, thousand 9-liter containers | 13 652 | 14 160 | 14 360 | 15 694 | 17 369 |
| Shipment of own products, thousand 9-liter containers | 12 913 | 13 132 | 13 029 | 14 014 | 14 982 |
| Number of Vinlab stores at the end of the year | 136 | 252 | 468 | 604 | 640 |
| Revenue | 35 903 | 37 303 | 43 411 | 53 074 | 63 292 |
| Gross profit | 14 518 | 13 675 | 16 890 | 19 527 | 22 678 |
| Gross margin | 40,4% | 36,7% | 38,9% | 36,8% | 35,8% |
| EBITDA | 3218 | 3625 | 4251 | 6495 | 9207 |
| EBITDA (margin) | 9,0% | 9,7% | 9,8% | 12,2% | 14,5% |
| Net profit | 275 | 655 | 938 | 1433 | 2459 |
| Net margin | 0,8% | 1,8% | 2,2% | 2,7% | 3,9% |
| Earnings per share | 13,79 R | 34,60 R | 68,34 R | 103,71 R | 197,47 R |
Annual increase in financial and operational indicators
| 2017 | 2018 | 2019 | 2020 | Average annual | |
|---|---|---|---|---|---|
| Earnings per share | 150,91 R | 97,51 R | 51,76 R | 90,41 R | 97,65 R |
| Net profit | 138,18% | 43,21% | 52,77% | 71,60% | 76,44% |
| Net margin | 125,00% | 22,22% | 22,73% | 44,44% | 53,60% |
| EBITDA | 12,65% | 17,27% | 52,79% | 41,76% | 31,11% |
| Revenue | 3,90% | 16,37% | 22,26% | 19,25% | 15,45% |
| EBITDA (margin) | 7,78% | 1,03% | 24,49% | 18,85% | 13,04% |
| Gross profit | −5,81% | 23,51% | 15,61% | 16,14% | 12,36% |
| General shipments, thousand 9-liter containers | 3,72% | 1,41% | 9,29% | 10,67% | 6,27% |
| Shipment of own products, thousand 9-liter containers | 1,70% | −0,78% | 7,56% | 6,91% | 3,84% |
| Number of Vinlab stores at the end of the year | 85,29% | 85,71% | 29,06% | 5,96% | 51,51% |
| Gross margin | −9,16% | 5,99% | −5,40% | −2,72% | –2,82% |
Plans
Development of the Vinlab network. Plans for expanding the network of alcohol stores "Vinlab" - a new strategy of the group of companies. The company in its documents indicates that, that Vinlab's share of EBITDA by 2024 will exceed 50%, and the number of stores by that time will be 2500 instead of the current 640.
On the one side, such a tilt towards retail does not look very logical, Considering, that the company is the largest producer of vodka in Russia and has won its market share precisely through the production of alcohol. On the other hand, company analysts claim, that vodka consumption in Russia is stagnating, besides, it is logical to assume, that the company needs its own retail sales channel as part of its sales development strategy. Research data, not associated with Beluga and other alcohol companies, confirm the version of stagnation: vodka consumption has dropped significantly in favor of wine consumption, and in "Winlab" there are only 1040 types of only still wine - against 183 types of vodka.
Diversification of production in favor of wine. Since 2018 Beluga Group has been engaged in winemaking in Taman. According to the company itself, for sales of products in the near future will be used the chain of stores "Vinlab", and this is also one of the reasons for its expansion.
Diversification should lead to, that by 2023 wine sales will grow to 20% from all sales, from which follows, that Beluga's management reacts subtly to changes in market conditions, - the factor is definitely positive for the growth of the company's shares. In recent years, the state policy of the Russian Federation is aimed at supporting the consumption and production of wines.. The reorientation of Beluga Group PJSC to these products is a positive factor for the further long-term rally of its securities.
Development of online sales. PJSC Beluga Group plans to increase online sales of the Vinlab chain by 2024 in 3 Times. But, taking into account Russian legislation, prohibiting the delivery of alcohol, in this case, we can only talk about booking. The issue of full-fledged online sales is still only at the level of discussions among legislators., Therefore, such plans can be treated rather skeptically..
Increase in export deliveries. Beluga Group plans to increase revenue from vodka export to 2,4 times by 2024. But in the same document, analysts of the group of companies admit, that the preferences of the world market are changing towards wine. Besides, talking about the growth of vodka exports to 1 half of 2021, the company mentions exactly the premium line Beluga vodka, which, as can be expected against the backdrop of a general decline in world consumption of vodka, buy rather as a souvenir, especially since it is produced in souvenir bottles with accessories. Therefore the probability, that the goal will be achieved, cannot be assessed as high.
Risks
Company risks can be divided into the following points.
Low liquidity. Low liquidity of shares leads to their significant volatility, moreover, fluctuations often occur without explainable fundamental reasons. In particular, typical example - explosive growth, and then a sharp drop in Beluga Group shares in February. This coincided with rumors about the merger of the group of companies with another alcohol issuer - PJSC "Abrau-Durso". Possibly also, that any other insider information slipped through the telegram channels, where retail investors communicate. However, it could be considered, that the risk of volatility is reduced: SPO increased free-float, and the transfer from the third quotation list of the Moscow Exchange to the second will increase liquidity.
Assessment by rating agencies. The assessment of the rating agencies of Beluga Group PJSC is too low for the largest company in the segment and the fourth vodka producer in the world.
Ratings of PJSC "Beluga group" from leading Russian agencies
| Rating agency | Rating | Forecast | Date of assignment (changes) rating |
|---|---|---|---|
| Fitch | BB− | "Positive" | 18.06.2021 |
| JSC "Expert RA" | ruА | "Stable" | 08.04.2021 |
BB− rating indicates increased exposure to risk, ruA rating means a fairly high level of credit reliability. As we see, and according to the forecast, and by ratings the picture is heterogeneous, what may raise questions. Apparently, this is due to the actions of shareholders that are not always logical and not always clear to investors, for example, the sale by Alexander Mechetin of almost all of his share. But in this case, probably, was the transfer of money to offshore.
Public policy risks. These risks may adversely affect the business of the group of companies. These may include tightening excise policy – a bill is currently being considered to index the excise rate until 2024, — tightening of the regime of sanctions and counter-sanctions, jeopardizing the export, and group import, as well as the refusal of the state to mitigate prohibitions in the field of delivering alcohol to customers.
The risk of deterioration of the competitive environment at Winlab. There are other chains of liquor stores.: "Norman", "Fragrant World", "Red and White", "Bristol". They develop more dispersed geographically., than Vinlab.
conclusions
The strength of the Beluga group of companies is the stable growth of financial and operational performance. At the same time, attention should be paid to a particularly strong and stable growth in earnings per share., what does it say, that the rally in the issuer's shares is justified and they are not an "alcohol bubble".
It should also be noted the trend towards diversification of production in accordance with the change in the structure of consumption of alcoholic beverages, not only in Russia, but all over the world. The trend towards the expansion of the Vinlab network and a certain reorientation to retail sales are also positive factors for the growth of shares.. Investors should pay attention to the further development of this network and the diversification of the range.
For stock growth in the future, undoubtedly, will have a positive effect on the expansion of wine production capacities, a trend towards which is already emerging: in particular, after the acquisition of the Villa Romanova winery, the group acquired the adjacent vineyards, after which she formed the Golubitskoye Estate company. But Beluga Group has not yet announced any further such plans., although she stated, that the share of wines in the product structure will increase, so investors need to track, what actions the company will take in reality in this direction.
Any news, even if those, the reliability of which is questionable, cause increased volatility of PJSC shares. At the same time, shareholders do not always explain their actions.: so, Alexander Mechetin did not comment on the sale of his stake. Over the group of companies hangs a constant threat of changes in state policy in the field of regulation of the alcohol business, since the strategy of the Ministry of Health of the Russian Federation is to reduce alcohol consumption in the country as a whole, and Beluga Group already has to adapt to it. Disruption of some of the group's plans, for example the introduction of online sales, can lead to instability in the dynamics of securities.
But we see on the basis of objective financial and operational results, that their performance is broadly in line with the bullish performance of the group's stocks, therefore we can assume, that the long-term trend is unlikely to change.
