Insight - Wimm-Bill-Dann "ahead" in beverage business
Wimm-Bill-Dann, the Russian drinks and dairy group, said that while sugar prices are increasing globally, the company is ahead in its beverage business.
Speaking at the company's earnings conference call today, CEO Tony Maher said that while there will be some price increases for the group year-on-year, the company has it "under control".
"There is also some upward pressure on some concentrates but we have direct contracts, we don't go through agents, we work directly with suppliers in South America and China and so on…so again we're ahead for the full year in our beverage business, there isn't that much upward pressure overall," Maher told analysts.
The company today reported a drop in sales and saw net profits dented by devaluation of the ruble in the first nine months of 2009.
Net income in US dollars dipped 0.1% to US$109.4m for the period ended 30 September, and sales in the company's beverage division dropped 18.5% to $303.4m in the first nine months.
Maher added that while volumes in the beverage segment were down in the third quarter, overall brand mix was "positive" for quarter and profitably remained "solid".
"For almost two years now Wimm-Bill-Dann has been demonstrating margin improvement and market share gains. This is no small achievement and is a result of our continued focus on streamlining our business and enhancing consumer loyalty," Maher said.
He told analyst the company was "continuously" looking at merger and acquisition opportunities.
"We have a number of things on the table, some are probably going to fall off because they might not be right for us and some, it depends on whether we can come to agreements on valuations and so on. There are lots of sectors we have been looking at for quite some time and it's just a question of time really."
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