SWEDEN: Absolut sales, cost cuts boost V&S
Rising earnings across its business have boosted annual profits at Sweden's V&S Group.
The Absolut vodka producer today (31 January) posted a 10% jump in operating profit to SEK2.3bn (US$329m) for 2006. Net sales rose 8% to SEK10.3bn.
The rise in profits came as V&S drove earnings across its international spirits business, its Nordic spirits group and its wine operations.
V&S CEO Bengt Baron said: "It is pleasing that our focus on profitable growth, a better product mix and lower costs is yielding results. All three business areas are reporting increased profitability for the second consecutive year."
Earnings from V&S Absolut Spirits rose 9% thanks to higher margins and increased sales of Absolut and rum brand Cruzan.
The company's V&S Distillers business, which sells spirits into Nordic markets, drove up its earnings by 8%, thanks largely to a series of cost-cutting measures. Revenues from the business, meanwhile, fell 4% due to falling sales in Sweden and Germany.
Cost cuts also drove a "considerable" leap in profits from V&S Wine, the company said. Sales, however, dipped 2% but profits were also strengthened thanks to a focus on products with margins, V&S added.
The company's wine business could be hit further after a decision from Systembolaget, Sweden's state-run alcohol retail monopoly, to withdraw 15 wines handled by V&S from sale on 1 March.
V&S is mulling whether to go to Sweden's Supreme Court in a bid to overturn the decision.
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