Sweden's V&S Group, the producer of the Absolut vodka brand, has reported an increase in sales of more than 35 per cent for 2002, boosted by strong gains in several markets and a number of key acquisitions.
Turnover for the year reached SK9.1 billion (€986.6m), while operating profit increased to SK2 billion from SK1.7 billion a year earlier.
The company said that the transition to a new distribution organisation outside of the Nordic region was completed during the year and export sales developed very well as a result, in particular in the final quarter.
Sales of Absolut itself reached SK5.1 billion, up from SK4.4 billion in 2001, despite a declining US dollar exchange rate. "The increase can be attributed both to greater volumes and to the fact that V&S now controls a larger part of the products' value chain through the new distribution organisation," the company said, adding that other export brands also developed positively.
Net sales for V&S spirits brands on the Nordic markets showed a slightly positive development, increasing to SK1.5 billion from SK1.4 billion. Wine sales in the Nordic region more than doubled in volume compared with the previous year, in part due to acquisitions, but also due to continued growth in the Nordic wine markets, with the exception of Denmark. In value terms, wine sales reached SK1.9 billion from SK741 million in 2001.
Acquisitions during the year included the remainder of Nordic Wine Group, a small wine importer in Denmark, and an import company in Estonia. The total value of acquisitions in 2002 amounted to SK806 million, while other investments in fixed assets totalled SK383 million and mainly related to capacity and environmental investments in åhus.
Among the key features in product development were the production of a new flavor, Absolut Vanilia, which is set to be launched this month with an innovative online-only marketing campaign (as we reported earlier this week - see News in Brief, 3 March), as well as new Christmas aquavits in Denmark and Sweden, new bottles for Plymouth Gin, Renat, Star Gin and V&S's Czech subsidiary's products, and the new Flipbox packaging for the group's wine brands, also set to be launched in 2003.
"The V&S Group strategy has for several years been guided by an insight of the need to grow internationally, both to utilise the benefits of scale and to compete successfully with other major international players," commented CEO Peter Lagerblad. "The continuing growth in profitability shows that this strategy was right. Our international expansion is based partly on global exports of our best-known brands, partly on achieving a strong position on selected local and regional markets.
"This is why we have placed great emphasis on consolidating our pan-Nordic base and it is also pleasing that several years of negotiations have recently resulted in an agreement on a significant acquisition in Poland, which will further strengthen our position in northern Europe," said Lagerblad, referring to the purchase of Polmos Zielona Gora.