![V-Line-200](http://www.e-malt.com/new/Images/Interface/TabLineVertical.gif) |
Russia, St. Petersburg: The Baltika Brewing Company grew ahead of Russia’s whole beer market over the 3rd quarter of the year 2004. The Russian brewing force announced on November 26, 2004 the results demonstrated by the Company for the 9 months of the year 2004. Company’s net sales, in money terms, increased to US$761.2 million - 27.5% increase, as compared to the nine months of the previous year. Sales volumes up to 15.23 million hectoliters - 18.7% increase, as compared to the nine months of the previous year. In the third quarter the company registered sales volumes up to 6.39 million hectoliters - 31.2% increase, as compared to respective period of the previous year. Baltika’s Gross profit went up by 23.9% compared to the nine months of the previous year to US$337.0 million. Gross margin is 47.6%, which had increased by 2.2% as compared with the 6 months of 2004. Net profit grew by 5.9% compared to the nine months of the previous year to US$117.6 million. Net margin is 16.6% having increased by 0.9%, as compared with the 6 months of 2004. The passed 9 months of the year 2004 were the most successful in the Company's history, the results of all operations moving upwards, quarter to quarter. In the 1Q sales were up by 6.8%. The following quarter saw a 13.7% and 3Q - 31.2% increase. According to an independent audit conducted in the 3Q 2004, the share of the Baltika Brewery in the domestic beer market reached 24.5%.
The implementation of the Company's new marketing strategy began in the spring of 2004 and resulted in sharply increased sales over the second half of the year. Its principal points included a system of communications, the building up of Baltika's brands in every price segment, the restyling of principal brands, the individual positioning and promotion of sub-brands within the company's parent brands and the launching of new price and product range positions.
The Business Analysis places Baltika Brewery in the head of the market with 33% share of it in the medium-price and 22% in the premium segments; in license beer segment Company's share of the market increased by 7.5 times. Due to the strong position of the brand “Arsenalnoye” through the 3Q the Company owns Russia's two leading brands “Baltika” - No.1 Russian brand in Russia and “Arsenalnoye” - No.2 Russian brand in Russia. Surperb 3Q results confirmed the effectiveness of the new marketing strategy. Over the 3rd quarter of this year, “Baltika No.3 Classical”, Russia's leading brand of beer showed a considerable growth of sales. In July, a record-setting quantity, over 50 million liters of this variety was sold. This is the largest monthly sales of a single sort of beer not just in the Company's history but in that of the country's whole beer industry. This fall, the national promotional action entitled “We Go the Same Way” resulted in a 58% increase, over the month of September, of the sales of “Baltika No.3 Classical”. On the whole, over the third quarter, the sales of this variety increased by 40% on the year. Baltika Brewery's marketing innovations and achievements have been highly appreciated by the professional community. The 3rd quarter of the year over, Baltika No.3 Classical was awarded a gold BRAND OF THE YEAR/EFFIE award for the effective strategy of the build-up of the brand in 2004. Over the whole year, the Company has been restyling the whole line of sub-brands within the “Baltika” parent brand. In the 3rd quarter of 2004, the sub-brands constituting “Baltika”'s medium-price segment were restyled. The designs of “Baltika No.4 Original” and “Baltika No.6 Porter” have been brought into agreement with the overall concept of “Baltika” beer varieties, the renovation of which began with that of “Baltika No.3”. In September, following the single concept, the Company came up with a new variety, “Baltika No.2 Light”. “Baltika No.9 Strong”, output in either aluminum cans or polyethylene bottles, was now positioned separately. In October, the restyling of “Baltika's” premium sub-brands began with the emergence of “Baltika No.5 Golden”. The sales of the Company's other brands, positioned separately and duly advertised, have been also booming. Over the 3rd quarter, the sales of “Carlsberg” beer made under license increased by 85%. The sales of “Parnas” premium beer, increased by 294% and “Samara” and “DV” regional brands - by 148% and 159% respectively. At this time, Baltika Brewery's distribution and logistic system is the among all Russia's brewing companies. The system is based on the company's own fleet of 1500 railcars and 30 warehouses across the country served by trucks, 7 of which are ultramodern terminals built by the company in large Russian cities over the past two years. These investments resulted in a reduction of transportation costs by 1.0% while, at the same time, railroads increased their tariffs by 12%. The Company's level of distribution is the highest in Russia and her products are available at 96% of all sales outlets in the country. Over the 9 months 2004 Baltika Brewery kept the best profitability and effectiveness figures in the industry. A slight setback of profitability, as compared to the same period previous year, was caused by investments in marketing, by products design and products packaging innovations, by the shift of consumers preferences for packaging. However, the implementation of the cost optimization program allowed significantly reducing the effects of these factors. For instance, costs per litre decreased by 5.4% and administrative costs went down by 28%. Over the reported period, the profitability of the Company was on the increase. The timeliness of the steps that have been made will help the Company move ahead in the new market conditions, despite the just introduced legislative limitation of advertising, sales, and consumption of beer.
28 November, 2004
|
![V-Line-200](http://www.e-malt.com/new/Images/Interface/TabLineVertical.gif) |
|
![V-Line-200](http://www.e-malt.com/new/Images/Interface/TabLineVertical.gif) |