Purcari Wineries Public Company Limited ($WINE)

Good afternoon, everyone, and thank you for joining Purcari Wineries Group Results call for the first quarter 2026 results. I'm Eugeniu Baltag, the Head of IR at Purcari. And with me today are Mr. Anatol Belibov, the CFO; and Victoria Moldovan, the Senior IR of the group. We will start with a brief overview of the key highlights of the period, then we will walk you through the financials and main operational developments across our markets, and we will close with our guidance for 2026. And after that, we will open the line for Q&A. So before we begin, a quick note that some of today's comments may include forward-looking statements, which are subject to risks and uncertainties, and actual results may differ. So with that, let's get started. So in the first quarter of 2026, we continue to strengthen the quality and resilience of our business. Romania, Moldova and Bulgaria remained our key markets together accounting for more than 80% of our group sales, while Angelo and Bulgaria delivered another very strong quarter. Operationally, EBITDA increased by 17% year-on-year, supported by gross margin expansion and disciplined cost management, while net profit was impacted by higher depreciation and ForEx effects. The underlying profitability of the business remains solid. Strategically, we signed 2 acquisitions with abptura and wine platform in Bania. Together, these transactions reinforce Purcari position as Romania's leading wine consolidator and strengthening our long-term vertical integration strategy. So beyond financial performance, the first quarter was also very active from a strategic and brand building perspective. On the innovation side, we continued our collaboration with European research institutions as well, we invested in education through scholarship for vocational students. At the same time, we strengthened the international visibility of our brands through events in Cyprus, Monaco and China, showcasing Port card wines in key diplomatic and HoReCa export markets. Finally, our marketing campaigns remain focused on anti and catmanship, highlighting the people behind our wines and reinforcing the premium positioning of our Purcari brand. With that being said, I will now hand over the floor to Anatol, who will walk you through the financial performance in more detail.

Yes. Thank you, Eugeniu. So once again, for sure, you mentioned -- first of all, good afternoon to all the investors and the person who joined the call. So for sure, you mentioned very well that this quarter, it was about resilience and to be able to manage the business in a very volatile macroeconomic environment. For sure, you know that now both Romania and all of our core markets have, let's say, more or less a stable situation with high inflation, which [indiscernible] Impact on our consumer, let's say, available income and confidence. Despite of this, we managed to deliver flat in terms of revenue, and we believe that this is a good result for us and we managed to secure our sales like this. In other note, in a positive note in gross margin and profitability margin, yes, we managed to improve it by 2 percentage points. And this was driven especially by focus -- continued focus on premiumization and also focus on pricing in order to secure our profitability. EBITDA margin, very good result, increasing by 5 percentage points, which is, I believe, one of the highest level at our group, which once again proved that we are doing the right things in terms of managing the cost and also driving healthy growth. Once again, we are looking to have a healthy growth equation, not to grow just by volume, but also pricing and mix. For sure, net profitability decreased by 11% from EUR 9 million to EUR 8 million. But it was presented in our financial statement and also on our slide, we have still big impact from currency devaluation and the group already started to make some action to manage this fluctuation, but also increasing depreciation in line with our CapEx strategy for next 2 years. If you go to the next slide to go in more details. So for sure, once again, we have a very broad and, let's say, portfolio, which help us to manage the growth. So still Romania remains our biggest market with more than 55% of revenue and Romania delivered 5.4% despite being highly affected by high inflation, one of the highest in Europe. And once again, it's important to mention that we delivered strong growth, especially in quarter 4 2025, which also, let's say, impact on Q1 results. Moldova, Moldova is, let's say, more or less a mature market. And here, 2.1 percent growth is more or less in line with the trend for the last year. For sure, we are looking for additional opportunity we have in pipeline already new products, which support our growth. Bulgaria with strong growth, 40%, in line with last quarter. Bulgaria managed to accelerate pretty well our sales performance in Central Europe, we have some, let's say, flu -- and at the moment, we have minus 17% decline in revenue. But once again, it's important to mention that this is also impacted by transition and, let's say, alignment with Mastek and integration. And the reason behind is that at this moment, this impact on our sales performance. In the portfolio part, negatively minus 1.5 Purariingmium wine in the current situation when people looking for more cheaper product has an impact on our performance for Purcari brand. Postavaninus 34 Bostavan mainly export portfolio consider the performance in export, it's also affecting our Bostavan.ura is doing pretty well, plus 1%. Once again, we mentioned that this is in line with changing consumer behaviors. Bar more or less regrease C, which is already a small part of portfolio, but despite this, it's 48% because in CA, we launched new products like M and wine crime, which allow us to accelerate growth in this type of the product. If we go to the next slide, please. So now going to the financial. So apart from the revenues, once again, in core wine, we are flat once again, but because of lower other services and lower sales of merchandisers, we registered minus 1.6%. But once again, from gross profit perspective, we increased by 3%. And here it's important to mention that our pricing, which we did in 2025 across all the regions. And in some regions, it was several wave of price increase support us to secure our gross profit margin. And also, despite of decreasing in volume and which has impact on our, let's say, production cost, we are trying to offset by other, let's say, OpEx saving initiative -- and one important point here is to mention that despite of high inflation, both in Romania and Moldova, we managed to secure our price for main packaging materials, especially bottles, which support us to deliver this, let's say, positive profit outlook. For marketing and sales, yes, we -- let's say, we analyze in details all the marketing investment, considering the current outlook in our cost market. And you can see that this has impact on decreasing the marketing and sales expense. G&A increased by 70% or 13.4 million, which is mainly driven by higher labor costs, driven by fulfilling some vacant position in Q4 -- Q1 2025, but also including some restructuring costs. But apart from payroll costs, all the line registered decreased once again, at the moment, we are looking in detail all the costs in order to manage the cost and be able to secure our profit. EBITDA grew by 17%, supported once again by strong gross profit margin, but also operational profit margin. And this is, let's say, also driven by increase in let's say, profitability. And net profit, it's EUR 8 million. So once again, we have strong impact from ForEx, which is EUR 4.6 million. Still our loan portfolio is mainly denominated in euro, but it's already decreasing from 9% to 18%. So we are looking how to implement already more hedging activities in order to decrease impact from currency fluctuation. For sure, as in previous calls, if you move to the next slide, we try to present, let's say, also this normalized net profit, which is not IFRS, let's say, numbers, but I believe it's important to show you more or less the main impact. So yes, here, we can see that gross profit margin, yes, EUR 1.3 million offset the impact in OpEx. We have other operating expense, mainly which include provision correction. Also, we have negative impact from review of fair value of grapes during the year. Interest, yes, is an important point. So it's increasing by EUR 0.6 million. But if you have a look on our loans balance for Q1 2026 and if you compare to previous period, the path of growing for interest rate -- interest cost, it's twice lower than our -- and ForEx impact number from qu-to-quarter, EUR 2.8 million. Five, we focus to improve our collection once again to be sure that we secure our cash flow and counting on decreasing our, let's say, trade receivable balance, we improve bad debt provision. So normalized net profit is EUR 8 million. But if you put on top the ForEx impact, EUR 2.8 million restructuring costs, so we can see that our profitability margin is EUR 13.3 million or approximately 15%. So once again, we believe that EBITDA margin, normalized profit and profit proves that we manage pretty well cost, gross profit in order to, let's say, amortize the decline in sales. Now if you can go to the next slide about, let's say, how healthy is our balance sheet. Eugenio to next one, please. Yes. For sure, in terms of cash position, yes, we are now on more prudent cash management and trying to navigate on our profitability outlook, but also managing investment priorities with dynamic in our sales performance. Yes, net debt, for sure, it's increasing. We mentioned during our previous call that our CapEx outlook or calendar is slightly different versus our vision to increase sales in line with by 2027. So for sure, now net debt, it's above, let's say, our previous year, but in line with acceleration of sales, this should be slightly decreasing to normal level for our group. And about net debt to EBITDA, 48 slightly increasing versus 2.37 at end of Q4. So once again, now it's at the top level. For sure, it's -- you need to we need to keep in mind that Q1 is not high in terms of sales, and this level should go down during the Q3, Q4 in line with acceleration of sales. Now if you go to next slide, Eugenio, if we speak about forwarding, in February, it was already March 2026, we shared our guidance for 2026. Our vision was from plus 10% to plus 15% in terms of revenue growth. At the moment, yes, it's minus 1.6%. So the company is keeping the announced revenue growth guidance. And this is -- and the reason behind is that for sure, we are already signs from the market that consumption is correct and we have more good sign in terms of sellout. So we are looking to unlock commercial synergy also with M Group, and you can see from financial statement that we start to have transaction and find commercial synergy with across the region. And also, we have several important projects in our portfolio, which should support us to deliver the revenue guidance. That's why the group is keeping the revenue growth vision unchanged. From an EBITDA perspective, it was announced '2426,ly,'s also considering that the pricing measures that we take also considering that, let's say, that we secure part of our important raw materials in order to avoid, let's say, the inflationary pressure. So we consider to keep both EBITDA margin and net income in line with previously shared guidance. Saying this, so this is our short presentation for sure, we have much more details in the financial statement, and we are here together with Eugeniu to answer to your question.

[Operator Instructions] Yes, we have -- so can you please elaborate on the project pipeline you just mentioned? Jan, could you be more specific because we have several pipelines, one with M&A, others in commercial. So just to be sure what is the question about. I can take questions. So I will start with the M&A. So this is my piece of breath. You all noticed that we managed to sign 2 deals this year. So one is with Seriaptura.'s in proximity of our KamaCepturainery. We have concluded the transaction this week. It means all the steps have been signed and now Slptura is part of our group. Okay. The rationale behind that is that we are adding a notorious winery from Romania. Actually, it was the first modern winery in post Romania, and we think we are going to have a lot of synergies with that. First of all, it's very close to our winery. And secondly, they have a few very good brands, which we are going to develop further. And we have an external presence as well being a player in the Canadian market for the last 15 years. So we are going to explore that. The second one is related to Carapfroin production platform and 31 hectares of vineyard in Branch region. So actually, we are expanding our footprint in an additional geographical area in Romania, which is very well known for grades. So actually, we're going to secure, let's say, the grades for our ambitious plans, which we have for commercial and not only -- and as you know, a big part of the costs are starting from. So this is why this is a more strategic move in order to secure that. Regarding other projects, of course, we can split them between our domestic markets, which is Moldova, Romania, Bulgaria and export market. So here, we are in the mid of integration with Mapi Group. We wanted to secure certain synergies -- we are developing local markets. But as well, we are focusing on export markets in order to ensure not just sales, but to ensure but we have good margins with -- and profitability with respective sales. At this moment, it's too early to elaborate on on the results and our plans towards that market. But what I can say you, we have several projects, all the -- in the process of being implemented, and we are expecting to have, let's say, the first results from that by the end of the year. I hope I have answered your question.

You'll have to just take it on the short when we will launch here also in Romania, but also in more another.

By the way, it's rolling this week in Romania, and we are going to launch staffing. So you can go physically and see with your eyes on what we're going to launch.

Just to see on taste --

[indiscernible], you have to move some money from your pocket. Any other questions.

It was pretty clear.

Okay. It seems it's Friday and it's lunch time. So in case there are no other questions, we are ready to conclude our presentation Meantime, you can address all your questions you have directly on the Investor Relations side or right to me or to an at all, and we will revert to you with answers to all your questions. With that, I want to thank you and wish you a nice weekend ahead.

Bye-bye.

Bye-bye.