Emperador (SGX EMI): How The Biggest Brandy Producer In The World (And Latest STI Entrant) Performed In 2022

Share price has risen 10% since its Secondary listing on SGX.

December 11, 2022

Philippines-based Emperador operates an integrated business manufacturing, bottling, and distributing a range of alcoholic beverages. Started in 1979, it has grown into the largest brandy producer in the world.

Today, it owns a portfolio of market-leading whisky and brandy brands that are distributed in over 100 countries. Its alcoholic beverages operations span the Philippines, Scotland, Spain and Mexico.

Emperador is a subsidiary of Alliance Global Group, a Philippines-listed conglomerate with diversified exposure to real estate development, food and beverage, quick-service restaurants and tourism-entertainment and gaming business.

Emperador debuted on the Singapore Exchange (SGX) on 14 July 2022 through a secondary listing. With a market capitalisation of $7.8 billion (₱320.2 billion), Emperador was included in the Straits Times Index (STI) on 19 September 2022.

Here are four things we learned looking at its 1H 2022 financial results. We should also note that Emperador reports its financials in Philippines pesos (₱). We converted this to Singapore dollars at the exchange rate of S$1 : ₱40.84.

#1 Emperador Owns A Diversified Portfolio Of Alcohol Brands

Emperador’s alcohol brands fall into two main categories – Scotch whisky and Brandy. Within each category, it also owns a range of brands – from accessible to luxury – that cater to different consumer profiles.

Source: Emperador

This allows Emperador to target many customer segments, and also diversifies its exposure to alcohol types and consumer types. This has enabled the company to support its growth in over 100 countries as well.

#2 Emperador’s Revenue Grew By 11% Internationally

In the first half of 2022, Emperador’s international sales grew 11% to ₱28.1 billion ($687 million). Within this timespan, Emperador’s revenue grew 27% from 1Q 2022 to 2Q 2022.

Source: Emperador

Adding to its defensive position, Emperador’s team also shared that they enjoyed a positive financial performance during COVID-19. Besides revenue, Emperador’s net profit also grew during the COVID-19 period.

Source: Emperador

#3 Profit Margin Has Been Under Pressure

Emperador has seen its gross profit come slightly under pressure. Despite a 12% dip in the first half of 2022 (and an 18% dip from 1Q 2022 to 2Q 2022), its gross profit margin is still hovering at the 32%-mark.

Source: Emperador

This was a result of several headwinds in the macroeconomy, including inflationary pressures, continued logistics constraints and higher cost, and a stronger U.S. Dollar among others.

Emperador has taken to raising its prices to tackle its higher costs. Its team also shared that customers are not surprised with the price increases and expect demand to remain healthy.

Nevertheless, its net profit margins remain stable in 2022, and even when COVID-19 was ongoing.

Source: Emperador

#4 Asia Pacific Will Be A Key Market For Business Growth

Emperador is definitely not looking to rest on its laurels. The team shared that it wants to raise its Scotch Whisky business – to roughly on par with its Brandy business. This will entail growing it at a faster pace through to 2025.

Source: Emperador

As part of this strategy, it has been growing its Whisky business in the Asia Pacific region. Since 2025, this region has grown from 6% sales contribution to 30% sales contribution.

Source: Emperador

The Greater China region – Mainland China, Hong Kong, Macau and Taiwan – will play an important role in Emperador’s ability to grow its APAC business.

Its Whisky business has outperformed the rest of the market in Greater China. This has seen its sales grow 30x since 2015. Moreover, its growth in Mainland China was also faster than the rest of the Greater China region.

Source: Emperador

Emperador Share Price Has Grown 10% Since Its Secondary Listed On The SGX

Since its secondary listed on 14 July, Emperador’s share price has risen 10% – from $0.45 to $0.50.

Source: Google Finance

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