Stock grows profits despite falling volumes

22 March, 2012

Stock Spirits Group (SSG) registered profit growth but revenue decline in 2011, having been influenced by “a challenging market backdrop”.

During the year ending December 31 2011 the central Europe-focused spirits and liqueurs business recorded an EBITDA (earnings before interest, taxes and amortization) increase of 4% to €63.9m and 6% EBITDA growth on a constant currency basis.

Chris Heath, chief executive officer of Stock Spirits Group, said: “Against a very challenging market backdrop, I am delighted that we have been able to deliver another very strong set of results in 2011, continuing our unbroken record of profit growth each year.”

Revenue dropped from €301.9m in 2010 to €295.1m in 2011.

Heath said: “Faced with falling market volumes and significant input cost increases, it is important that we were well positioned to capitalise on the strength of our brands, taking the lead on market pricing and managing our product and marketing mix to deliver margin growth.” 

The group reported that improved margins in Poland – where the group enjoys a 34% market share - had offset a volume drop and cost increases.

SSG strengthened its market leadership position in Czech Republic, with overall share growth rising from 38% in 2010 to 40% last year.

Brands such as Lubelska performed well, meeting "consumer demand for new flavoured vodkas", while the Czysta de Luxe brand diversified with the launch of a barley vodka variant in Poland.

According to SSG, the bitters market in Czech Republic and Slovakia was "revitalised" because of the launch of the group’s “hugely successful” Fernet Z Generation.

While in the US, inroads were made on the group’s strategy to deliver 20% growth on its Gran Gala orange liqueur brand.

Heath added: “We are particularly pleased to have maintained, and in some cases extended, the leading positions of most of our core brands in our key markets and have continued with our successful track record of launching new products.” 

Looking ahead, the SSG Board outlined plans to “invest in growing current market leading brands and new product development” and predicted “significant opportunities for organic and acquisitive growth, and expansion into new or underdeveloped markets”.





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Dominic Roskrow

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