BELGIUM: Interbrew profits up on European growth
The Belgian brewer Interbrew today released 2003 net profits of €839m, a jump of 8.1% on last year's figure of €728m, helped by strong growth of its global brands Stella Artois and Beck's.
Turnover increased by 0.7% to €7,044m, leading to EBITDA of €1,498m, which was up by 7.5% to €1,394m.
Interbrew's CEO, John Brock, said: "Interbrew's commitment in 2003 was to focus on and drive operational performance. With organic volume growth three times the industry average, and share up in most markets in which it competes, Interbrew has delivered on that commitment, and looks forward to a successful 2004."
A strong global brand performance was led by Stella Artois, with 8.1% volume growth worldwide and by Beck's, with 5.7% volume growth worldwide.
The company said it was hit by the impact from currencies on net after-tax profit in 2003 by €63m and on operating profit it took a hit of €75m.
In Western Europe, a good summer helped organic volume growth reach 3.4%. The company also delivered EBITDA up by 7.6%. The performance was driven, in part, by strong mainstream brands such as Jupiler in Belgium, which was up by 2.0%.
The Beck's family of brands grew by +11.5% in Germany, aided by the performance of Beck's Gold. Meanwhile Stella Artois continued its strong performance in the UK premium segment, with volume growth of 12.1%.
Interbrew said its performance in Central and Eastern Europe was outstanding, with organic volume growth up by 20.8%, organic net turnover up by 31.1%, and organic EBITDA up by 33.3%.
The company said growth was driven in both regions by initiatives such as the introduction of new packaging and brand extensions, which contributed 4.5m hectoliters of additional volumes.
However, in the Americas, volumes fell by 0.6%, while net turnover growth was only 2.7%, and EBITDA 2.2%.
"The decline in volume is due to a combination of the weak performance of certain brands and the slowing growth rate of the import segment in the US. Profitability overall was also impacted by the strike at the Montreal brewery during the summer, which cost Interbrew €16m post tax," Interbrew said.
In the US, Interbrew's shipments were down by 4.7%, while depletions were down by 1.1%, which was explained by the wholesalers' destocking which occurred extensively in 2003.
"Two special situations in the U.S. developed for Interbrew last year. In July, the company took ownership of Bass Ale and, as a result, Interbrew views the second half of the year as a period of transition. Interbrew looks forward to a better performance in 2004 when the company will have control of the brand for the full year. In 2003, Bass experienced a decline in depletions of 14.2%," the company said.
Interbrew also considered 2003 a transitional year for Beck's in the US, with a new management structure put in place and a repositioning of the brand. Thanks to the launch of the "Life Beckons" advertising campaign. Beck's depletions were down by 7.9%, slowly recovering from the double-digit decline in 2002.
In Asia Pacific volume decreased by 2.3%, due to the 3.4% decline of the South Korean market, but net turnover was up by 2.3%. EBITDA increased by 5.4%.
Looking forward, Interbrew said: "Interbrew successfully delivered organic volume and turnover growth in 2003, which led to strong organic profitability growth. Given the quality of its people and its brands, Interbrew believes that it will continue to deliver organic profitability growth in 2004."
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