by Ralf Witzler, Euro on Sunday
Zu Christmas and New Year’s are booming: sparkling wine – known as sparkling wine, crémant, champagne, spumante or cava depending on its origin. As little as glamorous the collective term “sparkling wine” may seem, the mostly golden sparkling drink is surrounded by a touch of luxury, it should not be missing when something special is celebrated. For the consumer, the enjoyment is an incentive to dig deeper into their pockets. And for investors, too, the listed producers of sparkling wines sometimes offer attractive returns.
One of the largest champagne houses is the world’s leading luxury group LVMH. Moët & Chandon, Dom Pérignon, Veuve Clicquot and other well-known names belong to the empire of French company boss Bernard Arnault, who has assembled more than 70 luxury brands in various segments in his group. With the Wine & Spirits division, LVMH had a turnover of almost 4.8 billion euros in the somewhat declining Corona year 2020.
The 52 million bottles of champagne sold also contributed to this. From January to September 2021, sales increased by seven percent compared to the same period in 2019. Overall, sales of sparkling wine make up only a small part of the almost 45 billion annual sales of the group, which has a market capitalization of 350 billion euros.
Laurent-Perrier has a completely different weighting. The company brings a good 600 million euros to the stock market scales. The company headquarters are located in Tours-sur-Marne in the heart of Champagne. The catering industry, which was temporarily closed due to the 2020 and 2021 pandemic, impacted sales for the entire industry and also for Laurent-Perrier. In addition, duty-free sales at airports and consumption during air travel fell due to the restricted passenger air traffic. Overall, the company recorded a drop in sales of around 20 percent to almost 185 million euros in 2020/21. However, higher prices and cost reductions allowed profits to increase by 6.5 percent to 25.2 million euros.
The robust performance and the increase in profits did not go unnoticed by stockbrokers. From the low in autumn 2020 with prices below 70 euros, the Laurent-Perrier share rose to around 100 euros in the summer of 2021.
profit and dividend up
From the company headquarters in Trier and with production sites in France and several European countries, Schloss Wachenheim sells sparkling wine and other sparkling and semi-sparkling wines. The company from Trier is number 3 in Germany behind Rotkummel-Mumm and Henkell & Co. The company’s best-known brands on the German market are Faber, Schloss Wachenheim and Feist.
The company’s products are exported to around 40 countries and mostly sold through local partners. The most important export countries include Great Britain, China, Portugal, the Benelux countries and Switzerland. Despite the pandemic restrictions, Schloss Wachenheim was able to increase profits and even raise the dividend in the 2020/21 financial year, which ended in September. Online trade and the specialist wine trade segment compensated for the declines elsewhere.
In addition to Pommery, the Vranken Pommery Monopole group owns the champagne brands Demoiselle, Charles Laffitte and Heidsieck Monopol. From Reims, France, also located in Champagne, the company sells around 20 million bottles a year, about half of them abroad. Vranken Pommery is one of the world’s largest champagne producers, with a market share of around ten percent.
With a turnover of 244 million euros in 2020, Vranken Pommery had to accept a comparatively mild decline of a good eleven percent overall. Because the market volume shrank by 18 percent overall, the company can feel like a relative winner that has gained market share. A bit of tingling is also possible in difficult times.
INVESTOR INFO
The production of the manufacturer of sparkling wines is spread over several countries. This reduces the susceptibility to bad vintages. The range of products and brands is wide and is particularly popular in Eastern Europe. The specialist wine trade division, which is still young in the company, offers sales and sales potential. The company Schloss Wachenheim has proven that it can grow even in the crisis and even increase the dividend. Attractive.
Laurent-Perrier is an outspoken specialist producer with a clear focus on champagne. The house can look back on a long tradition and has an illustrious name that supports demand from around 120 countries, even in times of crisis. The cost cuts in the pandemic should steadily improve the margin with the further, albeit jerky and only imprecisely predictable decline in the corona restrictions. The stock is an addition to the portfolio.
LVMH stands for luxury in every form, including champagne and wine. The French are among the producers with the strongest brands in this segment. In addition, LVMH is successful with its other divisions such as fashion, perfume and jewelry. The competence to position, manage and sell premium brands profitably is well developed in the group. An investment for investors who want to bet on champagne without investing too much.
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More news about Laurent Perrier SA
Image sources: Gudrun Muenz / Shutterstock.com, Nejron Photo/Shutterstock
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