Abrau-Durso Group summed up 2023

The Abrau-Durso Group of Companies, the leader in the Russian sparkling wine market, summed up 2023 and demonstrated a sales figure again that surpassed all previous results. In the 12 months of 2023, 56.704 million bottles were sold, which is 5% more than in 2022, of which 55.990 million bottles of self-produced alcoholic and non-alcoholic products, which is 6% more than in 2022.

Based on IFRS, Abrau-Durso's revenue increased by 6% to a record RUB 12.525 billion (RUB 11.864 billion in 2022, IFRS), while EBITDA decreased by 19% to RUB 2.857 billion (RUB 3.546 billion in 2022, IFRS) and net profit decreased by 28% to RUB 1.281 billion (RUB 1.772 billion in 2022, IFRS). The dynamics of EBITDA and net profit values is related to general economic factors that caused the growth of production costs, which affected the financial indicators, such as an increase in prices for components and imported equipment depending on the exchange rate difference, growth of logistic expenses, increase in payroll and other factors.

In the reporting period, the sparkling wine segment showed consistently high results: aged classic premium wines from the Imperial collection were in particular demand and have been showing steady growth for some years now. The distribution of the Group's still wines in 2023 is driven by changes in market conditions. The difficulties encountered during the year in promoting still wines were due to the market's focus on selling the accumulated stock of imported products shortly before the import duty increase from August 01, 2023. However, despite the obstacles, the Abrau Estates line showed excellent results in the still wine category with sales growth of 40%. A significant increase in the volume of sold products was also recorded in the collection of aged still wines from autochthonous varieties of the Vedernikov Winery, which is part of the Abrau-Durso Group, namely +31% year-on-year.

Important progress has been made in expanding the distribution of Abrau Spirits' portfolio of high-proof drinks - Abrau Cognac and Abrau-Durso 1870, 7 Herbs gin and 7 Vegetables tincture are among the leaders in the strong drinks segment. Non-alcoholic and low-alcoholic drinks produced by the Abrau-Durso Group demonstrate impressive sales results - a twofold year-on-year growth. Ciders continue to increase sales volumes, and sales of Abrau Vinonade increased by 225%. The Varyag energy drink collection was also a successful launch in 2023.

Winegrowing remains one of the priority areas of development for the Abrau-Durso Group. Total investment in vineyard development at the end of last year totalled RUB 629 million, and another 195 hectares were planted. The Group continued to develop and expand its own vineyards in Abrau-Durso, the Taman Peninsula (Yubileynaya Winery) and in the Rostov region (Vedernikov Winery).

The past year once again brought recognition from experts at reputable tasting competitions. Abrau-Durso wines have won more than 50 awards at professional competitions. A special achievement was the victory at the international tasting competition Korean Wine Challenge: sparkling and still wines of the Abrau-Durso Group were honoured with five awards - one gold, three silver and one bronze medal. Also, the Abrau-Durso wines have won high awards and titles of the AWWR Cup, the Russian Wines Guide by Arthur Sarkisyan, Chairman of the Russian Sommelier and Expert Union, the Wine Guide of Russia project organised by Roskachestvo, and the Top100Wines rating, as well as other competitions. Low-alcoholic products also demonstrated high results: Moscow Cider Days 2023, the main industry event in the field of cider-making, brought three more awards to Abrau-Durso products.

During the reporting period, Abrau-Durso introduced a large number of new products - the range was expanded in all key categories. As part of the premiumization of its core business, sparkling wine, the Group plans to expand the production of more marginal positions. And the first step to enter the super-premium segment was the classic sparkling wine Cuvee Alexander II. A significant result of the past period was the formation of the Abrau Spirits strong drinks portfolio - new Abrau three-year and five-year aged cognacs, Chameleon gin, 7 Grains vodka and Abrau Mix bitter entered the market. The soft drink category featured Abrau Vinonade with zero sugar content and Abrau Indian Tonic.

The Yubileynaya winery introduced novelties to the Abrau Estates collection - a new rosé wine and a white wine made from the red cabernet sauvignon variety - "white cabernet". Vedernikov Winery has launched a collection of petnats, which includes six samples from Don autochthonous and European grape varieties, as well as a new rosé wine - Krasnostop rosé.

One of the notable projects of last year was the collaboration between Abrau-Durso and the largest retail chain Magnit to create chocolates with sparkling wine under the Sparkling Truffle brand.

The key vector of the Group's international activities was the development of fruitful co-operation, as well as promotion in the Chinese market, where sales growth was recorded in both traditional retail and e-commerce channels. One of the components of strategic development in this country is participation in major professional events: the authoritative ProWine China International Wine and Wine Industry Exhibition, the CIIE (China International Import Expo) exhibition of imported goods and services, as well as a large-scale festival dedicated to Russian Maslenitsa held at the Beijing Exhibition Centre as part of the 2024-2025 Russian-Chinese Years of Culture. Abrau-Durso's future plans include entering other promising markets in Asia and Africa.

An important area of development for the Group of Companies is tourism: during the reporting period, the profit of the Abrau-Durso Tourism Center reached record levels, and the number of resort guests in 2023 increased to 600 thousand people. A memorable event for the country’s wine and tourism industries was the holding of the 1st Wine Tourism Forum in Abrau-Durso in May last year. The event was organised by the Abrau-Durso Tourism Centre with the support of the Global Wine Tourism Organisation (GWTO), the International Enogastronomy Centre and the Krasnodar Region Administration. Also in 2023, the long-awaited opening of the new view hotel Abrau Light Resort & Spa**** took place on the resort’s territory, representing 111 rooms with a modern smart home control system, and two new gastronomic projects, restaurants One and Seven, were presented.

A significant event of last year was the presentation of a new lifestyle project. Thus, in December 2023, a unique Abrau Club space was opened in the centre of Moscow. The Abrau Club concept became a reflection of the Abrau-Durso philosophy and high quality standards, which were embodied in home accessories, interior and hobby items.

In 2023, the Abrau-Durso Group continued to develop its own franchise and partner network, the Abrau-Durso Wine Atelier, with new outlets opening in Krasnoyarsk, Voronezh and Rostov-on-Don. The Wine Atelier network of branded boutiques has already 18 shops in 11 largest cities of Russia.

“Last year was not easy, and, like all Russian enterprises, we had to face the challenges of the times. Nevertheless, we managed to achieve record sales figures. We forecast growth in the future, including due to significant government support measures for the industry. The impact of the production costs increase on financial performance is expected to be levelled already this year due to the revision of the pricing policy for our products," commented Pavel Titov, President of the Abrau-Durso Group of Companies, on the results of 2023.