While Lion has benefited from stronger volumes sold by Australia’s beer sector off the back of warmer weather in eastern states, it has seen some of its market share shaved off.
However, innovation around its growing portfolio of craft beers did give a boost to total sales while Lion’s national dairy and drinks division was bolstered by the growth of its flavoured milk brands and a burgeoning dairy business in Southeast Asia.
Lion, owned by Japanese conglomerate Kirin, released its full-year result on Monday night, showing operating earnings before interest and tax of $694.3 million, consistent with the previous earnings of $694.6m. Operating net profit rose $11.7m to $280.1m.
“Lion’s solid performance in a highly competitive global and domestic marketplace highlights the underlying strength of our core business and reflects our ongoing investment in brands and innovation,’’ Lion chief executive Stuart Irvine said.
“While consumer confidence remains fragile I am confident Lion Beer Australia will continue to make good progress, and the conclusion of Lion’s distribution agreement with ABInBev means Lion will be able to increase its focus on its core Lion and Kirin portfolio of strong brands.”
He said while the Australian beer market grew slightly off the back of warmer weather in key states, Lion’s portfolio performed slightly behind the market in volume terms.
Group-wide cost management gains were partly offset by increased licensing costs on Corona Extra in Australia, driven by a weaker Australian dollar. A softer New Zealand dollar increased the cost of key inputs for Lion New Zealand.
In Lion’s Dairy and Drinks business, the three-year turnaround program designed to improve profitability remained on track with growth the continued focus, Mr Irvine said.
Revenues and volumes declined, but the figures were influenced by Lion’s decision to exit the low margin everyday cheese segment and the loss of some private label milk contracts.
Growth in the higher margin milk-based beverages category helped the business deliver a solid increase in underlying EBIT, which contributed significantly to the improved Lion group result.
Its Dare Iced Coffee drink was again a star of the portfolio, with volume up by 9.9 per cent.
In the yoghurt category, Dairy Farmers Thick & Creamy continues to perform well with 12 per cent growth year on year, and Farmers Union Greek Yoghurt experienced a 13 per cent year on year growth.
Source: TheAustralian
Link: http://www.theaustralian.com.au/business/companies/lion-beer-flat-but-milk-back-in-flavour/news-story/c07e038da8641cfcf92a06bcdafb2e07