US: Central European Distribution Corp boosted by premium growth
Central European Distribution Corporation has reported a strong set of full year figures, with sales and earnings up as the company benefited from accelerating growth of its key brands and reduced overheads.
The US-based company, which operates primarily in Poland, said yesterday (28 February) that net sales in 2007 increased by 26% to US$1.19bn, while net sales for the fourth quarter increased by 32% to $393.4m.
Operating income for the full year rose 29% to $118.1m, while the fourth-quarter increase was 47% to $45.6m.
On a comparable basis, CEDC announced net income of $69.8m, as compared to $46.1m in 2006. Net income, on a US GAAP basis, for the full year was $77.1m in 2007 as compared to $55.5m in 2006.
William Carey, CEO and president, said: "The substantial amount of integration work that we accomplished in 2006 has positioned our company to take full advantage of the growing opportunities in the market place.
"The execution in 2007 of our overall business model, including accelerating growth of our core brands, gaining profitable distribution market share and reducing key overheads is clearly visible in the numbers described above."
The company said that it was seeing strong growth in the underlying Polish economy which is propelling growth of its premium brands, both domestic and imported, including the 46% growth of its import portfolio sales, 19% growth of sales of Bols Vodka, and strong organic growth (excluding the impact of foreign exchange) of approximately 8% for the fourth quarter.
Carey continued: "In addition to the strong growth in Poland, we are laying the foundation for further growth in the region with the recent announcement of our strategic investment in the Whitehall Group. We are continuing to move forward with preparations for closing our Parliament acquisition, as all regulatory approvals have been received, and are targeting March for closing. We strongly believe in the consumer premiumization that is taking place in Russia and the portfolios of Whitehall and Parliament that are not only very complimentary, but are also strategically placed in the fastest growing segments of the wine and spirit market. We believe the Russian spirit market is going through a rapid consolidation and our aim is to be at the forefront of this market evolution."
The company said that it confirmed its previously announced full year 2008 net sales guidance of between $1.30bn and $1.40bn and full year 2008 comparable fully diluted earnings per share guidance of $2.08-$2.18, which does not include the impact of any future acquisitions including Parliament and Whitehall.
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