Stella performance boosts Interbrew results
good volume growth from brands such as Stella Artois and Beck's.
Europe's largest brewer Interbrew has reported a 2.1 per cent increase in organic volume sales for 2002, led by a strong performance from its flagship international brands Stella Artois and Beck's, volumes of which increased by 10.7 and 5.6 per cent respectively.
There were other good improvements at the organic level. Operating profits grew 11.5 per cent, EBITDA was up 9 per cent and turnover increased by 3.3 per cent. But at the reported level, profits were all lower than in the previous year as a result of the sale of the Carling Brewery business to Coors in the UK last year.
Turnover for the year was in fact some 4.3 per cent lower than in 2001 as a result of the carling disposal at €6.99 billion, while EBITDA was 9.1 per cent lower at €1.39 billion. Net profits were €467 million, down 13 per cent.
John Brock, Interbrew's new chief executive, said: "Our results in 2002 show the underlying strength of the business. Interbrew has a truly outstanding portfolio of brands which provide an impressive platform for growth. During 2003 we will continue to build on this platform, but there will be changes in the way we deliver our strategy. The company will continue to focus on delivering real value to shareholders."
Brock, who took over at the helm of Interbrew just six weeks ago, highlighted three main areas on which the company would focus in the future. "First, there needs to be a greater focus on organic volume growth, integration and synergy capture, as they are the cornerstones of all successful consumer goods companies.
"Second, while we will look at acquisitions, where appropriate, there will be very close scrutiny to ensure that they continue to be strategic and, in a more competitive mergers and acquisitions environment, to create real value.
Third, we will have an increased focus on people. Our business is one of relationships and partnerships. Investing in talented people who can build those relationships and partnerships will be a key item on my agenda."
Commenting on the company's performance in more detail, Brock said that there was an excellent performance from Stella Artois in the UK in 2002, with volume growth of 12.7 per cent. The company also posted an 18.9 per cent increase in sales through the important off-trade channel.
The company also strengthened its position in Germany, where Beck's was the fastest growing beer, with volumes up 7.8 per cent during the year. The acquisition of Hannover-based Gilde brought into Interbrew's portfolio Hasseröder, which is Germany's third fastest growing beer, while the Diebels business acquired at the start of 2002 is now being integrated with Beck's and well on track to meet cost saving targets of €10 million.
Further afield, volume growth in the Americas was driven by a strong performance from Beck's, Stella Artois and Alexander Keith's in Canada, while the Canadian brands (Labatt's) owned by Interbrew were the drivers of growth in the US market.
In the Ukraine, Interbrew's overall market share increased from 31.7 per cent to 32.2 per cent , driven by the continued good performance of the Chernigivske brand, which experienced a +54 per cent volume increase. In Russia, management changes in the second half of the year, plus an extension of the group's portfolio of brands, helped reverse a market share decline there.
In Central Europe, the trends in the first half of 2002 continued in the second half of the year, Brock said, with very good performances in Croatia, Hungary and the Czech Republic. Staropramen, the Czech pilsner brand and the leading beer in Prague, has a promising future, both in its home market and various selected countries, and has been added to Interbrew's international brand portfolio, he added. Results were weaker in Bulgaria and Montenegro.
In South Korea, despite no real consumer price increases over the past few years, Interbrew showed +9.8 per cent organic operating profit growth, mainly due to effective cost control. The Cass brand had good volume growth of +15 per cent to 3.6 million hl, and a resulting increase in market share to over 20 per cent.
In China, where Interbrew has a longstanding relationship with the Zhujiang brewery, the company strengthened its position in 2002 by taking a 24 per cent stake in its local partner. It also successfully turned around its operations in Nanjing and acquired a 70 per cent stake in the brewing activities of the KK Group in Ningbo.
