RUSSIA: Growth in Russia drives BBH sales gains
Baltic Beverages Holding AB (BBH) said today that management initiatives within sales and marketing had driven a continuation of the strong growth in both volumes and net sales shown in the second half of 2004 in its first half figures for 2005.
First half net sales reached €816m, up 18.6%. In US dollars sales reached US$1041, up 24%.
BBH, which is joint-owned by Scottish & Newcastle and Carlsberg, reported that EBITDA reached €215m up 26%, or US$274m up 31.7%.
"The momentum shown in the second half of 2004 has continued into 2005 with BBH gaining share in all segments of the Russian market and achieving local price increases in line with food and beverage inflation. The sales growth in the second half of the year will be less pronounced as the performance in the second half of 2004 was boosted by the sales and marketing initiatives developed in 1H04. The previous guidance of broadly flat EBIT margins for the full year is maintained," the company said in a statement.
Beer volume growth was driven by gains in Russia. BBH's total beer volumes in the first half reached 1894ml, up 14%. Within that, BBH Russia was up 17%, The Ukraine fell 1%; the Baltics rose 6% and BBH Kazakhstan leapt 61%.
The company's Russian market share, meanwhile, reached 36.3%, up 4.1%pts; comparable to the last two quarters of 2004.
In Ukraine, BBH said it had moved pricing ahead strongly and undertook a number of structural changes in the first half leading to volume and market share loss (-5%pts).
However, there was an increase in profits for the period.
"The under-performance against the market will be addressed. With the combination of the continuing re-organisation of the sales and distribution system and a fully operational new brewery, the business will improve going forward. Ukraine is a very vibrant market which is now larger than many Western European markets and growing strongly from a comparatively low per capita consumption level," the statement said.
Christian Ramm-Schmidt, BBH managing director said: "BBH's results show good sales, volume and profit development in the first half of 2005, demonstrating the underlying strengths of our businesses. BBH is now in a very strong position to drive increased value for all shareholders by working more closely together across the group.
"BBH Russia must continue to evolve to lead the market in scale and efficiency. There is now an excellent opportunity to create a business with an unrivalled position in terms of sales coverage and brand portfolio and a world class production and distribution network.
"BBH remains confident in the prospects for its markets and believes that it is well positioned for the second half of 2005."
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