The Freixenet group closed last year with significant growth in its profit figures. According to the balance sheet of the Catalan cava and wine manufacturer, the activity of its operations reported a total of 12.4 million euros of net profit, which the shareholders decided to fully increase their reserves.
The figure represents an important growth compared to the positive results it reaped in 2018, which the same document cited, figures at 7.9 million euros. And all this with global revenues in 2019 of 170 million euros, compared to the 147.1 million that the company managed to achieve in 2018.
According to the Catalan firm’s report, the figures for one year and the other are not comparable because in 2018 the company decided to change the year-end of the companies that make up the Freixenet group from April 30 to December 31, by which compares an eight-month exercise with another 12. However, the company assures that both operating results and profit before taxes “have been the best in the company in the last decade.” This circumstance was undoubtedly helped by the fact that in that year the company decided to divest itself, in May 2019, of the companies Solar Viejo, Valdubón and Freixenet Argentina, which were sold to one of the company’s shareholders (Grupo Ferrer Miranda ), which paid a total of 16.8 million euros, an operation that generated a profit of 3.5 million euros.
The company ensures that the sale on July 31, 2018 of 51% of Freixenet to the German group Henkell, “has had an impact on society at all levels.” Thus, it acknowledges that during the year a profound process of simplification of the company’s structure was carried out, merging by absorption several subsidiaries of the group with a low level of activity. And also culminating “the 50% joint venture process with Henkell’s company in the US, Mioneto.”
The company admits, of course, that it has a serious problem with the payment term to its suppliers, which amounts to 73.8 days on average, clearly above the legal limit set by law. Therefore, the company ensures that it is preparing to implement corrective measures and a tighter payment system to be able to comply with the law.
Like many of the companies, the Freixenet board recognizes that it is “extremely difficult to predict the effects derived from Covid-19 for the current financial year 2020.” And it reveals that its central strategy is “to guarantee the supply of the markets to the maximum and to maximize the reduction of spending items”.
To achieve this, the situation has made it necessary to reduce work shifts and to focus the activity on bottling and dispatch of finished products in order to continue supplying the markets and not lose the next Christmas season.
No adjustments derived from the pandemic
Freixenet administrators estimate that the pandemic “will not affect business continuity” and it will not be necessary to “adjust any of the annual accounts”. And the company argues it by explaining the work cycle of its model: “Due to the seasonality of sales, the company has a flexible labor system in which fewer hours are worked from March to June and then recovered in the peak months. activity, starting with the harvest and the Christmas campaign ”. Thus, Freixenet assures that in the months of strong impact of the Covid half of its workforce was on vacation and the other working three days a week, “so most of the activity has been carried out.”