Duvel turnover boosted by organic growth

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Belgian speciality beer maker Duvel Moortgat shrugged off declining
volumes in France and the Netherlands to post a 9 per cent rise in
first half turnover, helped by strong performances in the UK and
US.

Turnover at Duvel Moortgat, the Belgian speciality beer and fruit juice producer, grew by 9 per cent in the first half of 2002 to €27.6 million, helped by strong organic growth. The rise in sales lifted net profit by 3.6 per cent to €3.1 million, but consolidated operating profits were down slightly at €4.9 million.

Volume sales during the half rose 3.5 per cent in the company's home market, with foreign sales rising by the same amount. However, the increase masked some poorer performances, such as a 5 per cent decline in Dutch volume sales caused by an unexpected poor performance from speciality beers there and a 9.7 per cent slide in French volumes due to what the company called a 'temporary' decrease in sales volumes from Maredsous, its abbey-style beer.

These declines were more than offset by strong performances in the UK (volumes up 16.1 per cent) and the US (up 25 per cent), however, and Duvel said that the first few months of the second half had also shown a marked recovery in the French market.

The half also saw the first contribution to profits from the Bernard brewery in the Czech Republic, with volumes there increasing 9.1 per cent despite a 7 per cent price increase implemented in April. The improvement came as a result of significant investments in advertising and distribution, the company said, adding that the Bernard brewery in Humpolec had not been damaged by the flooding in the Czech Republic last month.

The Freya juice arm suffered during the half, with sales falling 3.7 per cent due mainly to a reduction in private label production. However, a good performance from the Freya brand itself was encouraging, the company said, with extended distribution into the supermarket channel contributing to a 28.5 per cent rise in volumes. Despite the overall decline in Freya sales, Duvel Moortgat said it would continue to expand its non-alcoholic drinks business.

Increased investment during the half included €8.5 million in a new bottling line which will be in use by the middle of next year, allowing Duvel Moortgat to increase its capacity and flexibility.

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