Foster’s details difficulties in wine trade
Foster’s attributed underperformance in its wine operations to a marginal decline in organic sales for the 2008 fiscal year amidst an ongoing review of the segment.
Full year revenues fell by 0.1 per cent to AUS $4.37bn on constant currency terms for the twelve-month period ending 30 June amidst robust sales of its beer and cider brands in its domestic, Asian and European operations, the group said.
On an organic basis operating profit was up by 4.3 per cent to AUS$1.13bn, with operating margins up by 0.7 percentage points to 26 per cent over the same period last year.
The brewer said that its global wine segment, which is currently undergoing a review as part of a potential shake up of its operations, posted a 1.8 per cent fall in operating profit to AUS $392.7m on the back of decreased sales volumes.
In the group’s domestic Australian and Asian operations, sales volumes of its cask wine declined by 42.8 per cent for the year, with the company viewing a exit strategy from the segment during the first quarter of fiscal 2009.
Foster’s said that in light of the review into its wine operations, it would not be providing a forecast for the 2009 fiscal period.
Heineken expands into profit
Heineken has posted a 6.7 per cent hike in half-year revenues to €6.4bn in organic terms as it looks to consolidate its global market share following the acquisition of Scottish & Newcastle’s (S&N) Western European operations.
Operating profit on the same terms rose to €925m for the six month period, an improvement of 7.5 per cent compared to the same period the previous year. The company said that a 5.8 per cent increase in sales of its international premium beer brands aided this growth.
Foster’s added that operating margins over the period fell by 1.3 percentage points, despite higher pricing for some of its brands.
Looking ahead, the group said it was targeting mid single digit-net profit growth for the whole year as it moves to improve its cost effectiveness and market share in the market for premium beer brands.
Heineken’s chief executive office, Jean-François van Boxmeer said that the ongoing drive for production and cost efficiency as part of its Fit2Fight strategy was a key factor in meeting its expectations.
”The integration of the Scottish & Newcastle businesses into Heineken is proceeding swiftly,” he stated. “We have identified an additional £25m of synergies and we have the people, brands and ideas that will allow us to fully exploit our leadership of the highly profitable European beer market.”