Henkell & Co. sees revenues rise by 5% to €526m

Germany’s Henkell & Co. Group, which recently bought Cava producer Freixenet, has reported revenue growth of 5% for the 2017 financial year, attributing its success of a stronger focus on “premiumisation and internationalisation” of its brands.

Andreas Brokemper, head of controlling and director of Henkell & Co. Sektkellerei KG

The Henkell & Co. Group closed the 2017 financial year with €526.5m revenue (€702.0m including taxes), demonstrating revenue growth of 5%.

In Germany, an increase of 4.2% took revenues to €156.9m, with domestic business accounting for 29.8% of the group’s overall revenue.

In Germany’s premium sparkling wine segment, Henkell & Co. claimed a market share of 53.6% with brands such as Fürst von Metternich, Mionetto, Menger-Krug and Fürst von Metternich Chardonnay, which will extend its portfolio this year with a new Black Edition of the Fürst von Metternich Riesling Brut, which is sold in a matt-black painted bottle.

Internationally, the business grew by 5.4% (or 6.3% once adjusted for currency fluctuations) to €369.6m, driven by Prosecco brand Mionetto, Germany’s Henkell and the i heart WINES brand, distributed in the UK by Copestick Murray.

In western Europe, the group reported on double-digit growth, with revenues rising by 12.8% to €151.4m,

Outside Europe, Henkell & Co. grew by 5.9%, taking revenue to €63.5m, with Mionetto Prosecco driving the bulk of this growth.

In Comparison, markets in eastern Europe saw a slight decline, dropping by 1.3% to €154.8m, which the group attributed to the sale of its spirits division in the Czech Republic.

Headquartered in Wiesbaden, Germany, but with 22 subsidiaries worldwide, the group now has the potential to produce nearly all styles of sparkling wine, from German Sekt to Prosecco, Champagne, Crémant and Cava.

Among its investments in the last financial year, the group invested €15m (up from €14m in 2016) in vineyards in the Czech Republic, announced the building of a new Mionetto winery in Valdobbiadene to keep up with demand, and opening a Sektmanufaktur at the Wiesbaden headquarters – an educational facility that builds on the groups oenotourism ambitions to teach visitors about how sparkling wine is made.

“Henkell & Co.-Gruppe made a promising start to the new year,” the company stated. “In the first quarter, it made considerable gains in all regions, including pleasing growth of its international core brands Henkell, Mionetto and i heart WINES. The Group is benefitting from the good general economic climate in Europe and the increasing popularity of sparkling wine worldwide.”

The group’s most recent high profile acquisition has been the purchase of a 50% stake in Cava producer Freixenet for  just under €220 million.

Freixenet, which also owns vineyards and brands in Argentina, Australia, Mexico and Champagne, has been valued in the region of €550m and it is believed Henkell at one point may have put in a tender to buy the group outright but several of Freixenet’s major shareholders including presidents, José Ferrer and José Luis Bonet have apparently retained their shares.

“In March 2018, Henkell & Co. signed an agreement to acquire 50.67% of Freixenet S.A.’s shares as well as signing an extensive, international cooperation agreement with the remaining shareholders,” the company added. “This step sees both companies joining forces to become a worldwide leading supplier in the sparkling wine sector. The acquisition of the shares is subject to approval by the antitrust authorities. In April this year, Henkell & Co. acquired a majority stake (75%) of the Lithuanian distribution specialist. Filipopolis, headquartered in Kaunas, is one of Lithuania’s leading importers and distributors of alcoholic beverages.