CANADA: Jobs to go at Sleeman as pressure tells
Sleeman Breweries has announced job cuts and further restructuring as pricing pressures continue to hit the Canadian beer maker.
Reporting poor fourth-quarter and full-year results yesterday (2 March), the company said it was announcing a further reorganisation across the organisation aimed at reducing costs by around C$2.7 million (US$2.37m) a year. Some C$1.7m would be saved for the current fiscal year.
The number of full-time positions will be cut by around 40 as a result of this initiative. A key element of this reorganisation, Sleeman said, will be the consolidation of the Ontario, Quebec and Maritimes provincial businesses under one managing director, Dan Fox.
Sleeman will record a one-time charge of C$2.0m in the first quarter of 2006 in connection with this reorganisation.
CEO John Sleeman said: "The reorganisation announced today further reflects the company's determination to reduce its cost structure.
"We will reduce our production, distribution and selling, general and administrative expenses to maintain our competitive position in response to continued pricing activity. We will also introduce innovative products and sales and marketing campaigns in the coming months to return the company to its historical growth rates."
Fourth-quarter net revenue fell to C$49.6m compared to C$53.8m for the same period last year, whilst earnings before interest, taxes, depreciation and amortization (EBITDA) were $5.7m compared to $9.7m.
"The fourth quarter of 2005 was a very challenging period for Sleeman due to the intense price competition the company faced in all of its key Canadian markets, especially Quebec," said John Sleeman.
"Our volumes and market share held up quite well in this environment. However, our revenue per hectolitre and profitability were impacted as we offered limited time offer discounts to remain competitive with those offered by the large national brewers and the smaller regional brewers who benefit from provincial tax subsidies."
For the full year, net revenue fell to CC$211.5m in the prior year. EBITDA was C$29.1m compared to C$35.9m in the 2004 fiscal year.
Sleeman Breweries said it expects that the intense price competition it has faced in key markets in the past two years to continue in 2006.
The company said it expects earnings in the first quarter of 2006 to be significantly lower than earnings reported in the first quarter of 2005 due to increased price competition in the first three months of this year.
Sectors: Beer & cider
The chairman, CEO and founder of Canadian brewer Sleeman Breweries has said he will fight to keep his family name in the beer business, after a review of commercial options was ambushed and turned int...
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