Baltic Beverages Holding has posted a healthy rise in sales for both the final quarter and the full year. The Carlsberg/Scottish & Newcastle joint venture also said today (14 February) that it has seen its share of the Russian beer market increase, while it remains upbeat on its integration plans in the country.

While group volume for the year in 2005 was up by 12% year-on-year, sales increased by 21% on 2004, coming in at EUR1.76bn (US$2.089bn). EBITDA for the year was up by 24.7% on the year before, at EUR484m for the group.

For the fourth quarter, sales were up by 26% to EUR392m with EBITDA up by 40.4% at EUR100m.

"BBH significantly outperformed the Russian market in 2005, on average growing at twice the market rate and in doing so growing market share in Russia by 2.1%pts," the company said. "BBH remains the clear market leader in Russia with strong positions across all market segments." The group now hold 36.3% market share in Russia.

In Ukraine, BBH said it experienced some volume and market share loss in the first half of 2005. Through the combination of continued re-organisation of the sales and distribution system and a fully operational new brewery, the second half of the year showed the reversal of the negative trend of the first half. For the full year BBH Ukraine sales volumes grew by 13% against market growth of 25%, resulting in market share of 19.1%.

All three Baltic State markets showed positive development in 2005: the Estonian market grew by 13%, Lithuanian by 8% and Latvian by 3%. In total, Baltic markets grew by 8% compared to 2004. BBH remains the market leader with combined share of 41.6%, despite a volumes increase slightly below the market.

Turning to BBH's proposed integration of its Russian breweries, the group said: "The merger is expected to generate annualised synergy savings of US$60m to US$80m in first full year after completion, mainly coming from best practice improvements and cost savings. Approximately one-third of this amount has already been achieved in 2005 and part of synergies to be reinvested in growth.

"BBH has confirmed its commitment to the Russian beer market by reiterating that it will take shares in the enlarged Baltika in exchange for its shares in each of Pikra, Vena and Yarpivo rather than cash."

Looking forward, BBH's managing director, Christian Ramm-Schmidt, said: "(The) excellent results of 2005 once again demonstrate the underlying strengths of our businesses, brands and business model. BBH has further improved its position and continued to be the undisputed leader in Russia, Baltics and Kazakhstan. Ukraine has been a very challenging market, and we remain committed to improving our position there in 2006.

"We are glad to notice that at this early stage we have already seen the first benefits from the operational integration in Russia coming through and first synergies achieved. We will continue to build a National Champion in the coming year and are confident that the merger of Baltika, Vena, Yarpivo and Pikra will deliver clear benefits to all shareholders.

"Overall, BBH sees good prospects for all its markets and believes that it is well positioned to continue its profitable growth in 2006."