E-Malt.com News article: 1766

UK brewer, Scottish & Newcastle, announced on November 7 third quarter results (July to September 2003) from its 50% owned joint venture Baltic Beverages Holding AB (BBH). The company said BBH registered 8% beer volume growth. The third quarter, despite cold summer weather, showed a continuation of the good volume trends established in the second quarter, both within BBH and for the markets as a whole. In the third quarter, BBH’s market share in Russia grew by 1.5% to 33.1% compared to the third quarter of 2002. For the nine month period January to September market share was 0.9% points higher at 33.3%.

In the Ukraine, capacity constraints eased in the third quarter allowing BBH to recover market share. For the third quarter, BBH’s share, including Baltika imports was 21.4%, 1.1% points higher than in the previous year. On the same basis for the nine months to September market share grew to 21.4%, 0.9% points higher than in the previous year. The new brewery in Kiev, due to open in spring 2004, will add momentum to this good performance.

Net sales for the third quarter grew by 16% on volume growth of 8%, demonstrating a firmer pricing environment than in the first six months of the year, despite the continuing adverse impact of mix changes due to the growth of the lower price PET sector.

BBH’s margin performance in the third quarter was strong. EBITDA margin was 0.9% points higher at 36.3% than in the same period last year. As anticipated, EBITDA margins for the nine months to September were 1.5% points lower than in the previous year at 32.5% (vs 34.0%); a significant improvement on the half year.

For the nine months to September the rouble has appreciated by 1% against the US Dollar but depreciated by 16% against the euro, (compared with the average exchange rates for the similar period in 2002).

BBH remains confident in the growth prospects for its markets, and anticipates continued profitable volume growth in the fourth quarter.

Baltic Beverages Holding is a 50:50 joint venture between Scottish & Newcastle plc and Carlsberg Breweries A/S. It operates in six countries in Eastern Europe, including Russia where it is the market leader with a 33% market share.


07 November, 2003