Distell Group Holdings Limited (Distell) unaudited interim financial results for the 6 months ended 31 December 2020, dividend payments to be reviewed at full year due to sale of alcohol ban uncertainty

24 February 2021

Strong Africa & International growth amidst challenging domestic market conditions

Group revenue up 3,8% on 0,8% higher volumes

  • Flat domestic revenue performance driven by spirits and wine despite 22% reduction of trading days
  • Robust Africa revenue growth of 19,9% outside BLNE
  • Strong International performance with 15,4% revenue growth
  • Excise duty increased by 7,1% to R4,4 billion


  • Reported up 11,2%
  • Normalised and adjusted for forex up 16,8% 1, 2

Headline earnings

  • Reported up 11,5%/li>
  • Normalised and adjusted for forex up 24,0% 2

Dividend payments to be reviewed at full year due to sale of alcohol ban uncertainty

Stellenbosch, 24 February 2021, Distell Group Holdings Limited (Distell), the South African-based global drinks company, today released its unaudited interim financial results for the 6 months ended 31 December 2020, keeping dividend payments on hold due to continued uncertainty over possible further bans on the sale of alcohol. In a period of uncertainty and disruption, the Group commendably grew revenue by 3,8% to R15,4 billion on 0,8% higher volumes. Revenue excluding excise duty grew by 2,5%. In the domestic market, while 41 trading days were lost during the reporting period due to the second and third sale of alcohol bans introduced by government, domestic revenue declined by only 0,5% with sales volumes down by 1,4%. This was achieved through a combination of Distell’s diverse product portfolio with strong brands alongside improved customer execution when allowed to trade. Market share gains were made across all three categories. Following a successful implementation of its digital Business-to-Business (B2B) sales platform earlier in the year, the Group saw a high rate of customer adoption which is growing revenues and volumes at a faster pace than non-platform customers. Growth in e-commerce business for the six months period has already reached what was achieved in the previous reported full financial year. African markets, outside South Africa, delivered strong revenue growth of 12,7% on sales volumes which increased by 11,7%. Focus markets on the African continent, outside the Botswana, Lesotho, Namibia and eSwatini (BLNE) countries, grew revenue by 19,9% and volumes by 20,3% with strong revenue and volume growth across all three categories. Kenya, Nigeria and Mozambique all recorded strong double-digit growth growth as investments in people, systems and skills to continue the route-to-market (RTM) roll-out and in-country production deliver on our strategic intent to grow the business across the continent. This initiative has seen the customer footprint grow to 37,500 sales outlets in Africa (excl. BLNE) from 9,000 two years ago.

BLNE countries were negatively impacted by the pandemic due to border closures and alcohol bans, but still delivered commendable revenue growth of 4,0% alongside 2,7% growth in volumes. The Africa region contributed 64,2% to foreign revenue with its contribution to Group revenue rising by 1,4% to 18,2% in the period. Revenue in international markets outside Africa increased by 15,4% on volumes which, as anticipated, declined by 9,1% given the cessation of high volume, low value plays. Strong international premium spirits growth was again led by single malts, Bunnahabain and Deanston in particular, in all major markets and Scottish Leader in Taiwan. Amarula delivered 34,9% revenue growth despite the current pressure on the global travel retail (GTR) market due to international travel restrictions. Revenue from wine exports grew 19,9%, led by Nederburg, Drostdy-Hof and Two Oceans. The overall performance led to earnings before interest and taxation (EBIT) margins almost doubling as the business capitalised on its strategy to focus on premium whisky brands, a step-up in digital sales channels and the benefit from historical investments in aged stock. Revenue from e-commerce channels quadrupled in the reported period. Product innovation remains a key priority, with the Group releasing several key innovations across its markets during the period. The low- and no alcohol category is a key segment of importance with both Savanna and Hunter’s non-alcoholic premium ciders collectively growing market share and revenues during the period, which also embedded their positions during bans on alcohol sales 5.

in South Africa. Lower alcohol by volume (ABV) vodka under the Count Pushkin brand also grew during the period alongside early positive signs off the back of the launch of a lower ABV brandy from Viceroy. Commenting on the results, Distell’s Group CEO, Richard Rushton, said: “The impact of the COVID-19 pandemic and alcohol sales bans in South Africa have put the resilience and agility of our domestic business to the ultimate test. Our diverse portfolio has really played well to changing income and occasions due to lockdown conditions during the pandemic. Our RTM investment in our Africa and focussed International strategy helped to offset the flat but resilient performance in our domestic market, which we are extremely pleased with given the 22% trading days that were lost due to alcohol bans in South Africa.” Distell’s share of equity-accounted earnings increased from R66,8 million to R85,0 million, driven by improved performance from Tanzania Distilleries Limited. Reported EBITDA grew by 11,2%. Normalised EBITDA, which excludes the impact of the profit on the sale of property, plant and equipment (PPE), Group restructuring, retrenchment and other non-recurring costs, increased by 10,0%. Normalised EBITDA, excluding foreign currency translation movements, increased by 16,8%. Headline earnings and headline earnings per share increased by 11,5% to R1,3 billion and by 11,6% to 612,0 cents respectively. Excluding the currency conversion movements, the Group restructuring, retrenchment and other non-recurring costs referred to above, headline earnings increased by 24,0%. Total assets increased by 6,7% to R27,9 billion.

Net debt at the end of the reporting period amounted to R2,7 billion (2019: R4,7 billion). The Group was able to comfortably meet its debt covenants relating to its South African medium term debt. The Group remains in a strong financial position with low levels of gearing, which is demonstrated by a debt to debt-plus-equity ratio of 23,4% (2019: 26,9%) and a debt-to-equity ratio of 30,5% (2019: 36,8%) at the end of the reporting period. Rushton said: “I’m proud how Distell has proven to find growth opportunities with its diverse portfolio of brands, RTM and agility in the current environment. Our culture shift is also driven by purpose and shared value in everything we do, evidenced by integrating our five selected Sustainable Development Goals (SDG’s) as a measurement of positive societal contribution, which are all on track. We also continue to play a positive role within the alcohol industry to ensure safe and responsible trading by investing significantly behind a number of responsible alcohol initiatives and compliance in partnership with various government departments and provincial liquor boards. As the only large South African manufacturer of alcoholic beverages, Distell sees itself as a trusted partner in helping to shift societal behaviour while protecting and creating jobs in the industry to offset inequality and poverty, exacerbated by the pandemic and related bans on alcohol sales.” “We are confident in our ability to navigate disruption, generate cash and in the appeal and strength of our diverse and trusted portfolio of brands. This, alongside our key RTM investments, stronger levels of customer execution, higher production efficiencies resulting from past investments and more liquidity headroom will enable us to navigate any short-term challenges in the current environment.”