Company Announcement
Detail
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| FRU Frucor Beverages Group Limited |
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| 18/07/2001 |
| 8:51 am |
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| FRUCOR'S REVENUES GROW 27% |
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Frucor Beverages Group announced today that its unaudited
revenues for the
year ended 30/06/2001 grew 27% to NZ$228.4m. NZ
accounted for around half
the growth, while international revenues
increased by 67% to NZ$62.2m.
Revenues have doubled in the 2 years from
1999.
New Zealand
- Given Frucor's leadership position in the NZ
market and the sluggish
economic conditions, an annual sales growth
rate of 16% is very satisfactory.
- The business finished the year
strongly with the fourth quarter market
share being better than the
year to date in most categories.
- Favourable market share trends were
seen in energy drinks, water and sports
drinks (see Attachment 1).
-
'V' market share in the energy drink market has continued to grow
during
its fourth year. The Moving Annual Total (MAT) market share in
both grocery
and petrol is now just below 70%.
- Frucor's share in
the fast growing water market has been a positive
contributor to this
year's result. The last quarter share for the category in
both grocery
and petrol is up on the MAT. Mizone has performed particularly
well.
Launched in October last year, it has captured around 20% of the
petrol
channel.
- The launch of gforce into the sports drinks market
approximately 20 months
ago has grown revenues, with the company's
share of the category almost
doubling.
- Market share in Carbonated
Soft Drinks (CSDs) has fallen. However, this
range continues to
contribute positively to profits. In addition to positive
contribution,
the addition of the Pepsi range in November 1999 has helped
expand
Frucor's customer base improving overall business.
Australia
-
Revenues in Australia grew by $16.9m or 57% with last quarter sales
being
30% up on the same period last year. During the year, due to a
change in
distribution arrangements, stock was bought back from Spring
Valley, V's
original distributor. The impact of this was to reduce
revenues on a one-off
basis by $8.5m. Adding these revenues back gives
annual growth of over 80%.
- In the petrol and convenience channel, due
to market entry by two major
players, V's share fell from 60.5% to
48.4% during the year. However,
increased competitive activity
stimulated the market to grow by 120%. Fourth
quarter data indicate
that V's share is steady at between 48% and 49%.
- Last quarter growth
in the petrol channel was 37%.
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- V was launched into the grocery channel at the end of
September last year
and with 38 weeks of sales the brand holds a 31.2%
share of a 48 week market
reading. Most recent share data indicate a
share of around 40%.
United Kingdom & Ireland
- The full year
sales result was disappointing. Revenues were impacted to
some extent
by high inventories at the distributor at the end of June 2000,
but
this does not mask the fact that the performance in the market fell
well
short of expectation.
- However, the distribution drive carried
out over the last quarter has met
its targets with a 47% weighted
distribution being recorded in mid-June
versus 25% in March. The use of
NZ and Australian expats in the London
distribution drive has helped
lift weighted distribution to 67% in greater
London, making V second
only to the market leader.
- With these improvements in distribution,
the trend in fourth quarter sales
was encouraging.
- Further
distribution improvements can be expected in July/August with
more
initiatives being taken and the additional listing of ESSO
managed
franchises, one of the UK's major service station groups.
-
TV media re-commenced on 25 June 2001.
Rest of World
- South African
revenue grew during 2001 although Play a new energy drink
has taken
share during the last 3-4 months.
- Sales to two new markets Hong Kong
and Dubai were recorded in May and June
and their retail launches have
just recently occurred.
Fruit Juice & Drinks
- It is pleasing to
note the 3% growth achieved in Fruit Juice and Drinks in
spite of
softer market shares. This indicates that Frucor's performance in
areas
outside of petrol have performed ahead of last year.
- New Product
Development has been important in this sector with both Fresh
Up Vits
and Berry Patch Fruit Drinks increasing revenues.
New Age
Beverages
- This category has grown by 46% during the last 12 months
and now accounts
for nearly 50% of revenues. Without the Spring Valley
stock adjustment
discussed above, growth would have been approximately
57%.
- All geographies showed good growth in this category, led by
V.
- In New Zealand, gforce also performed well with a much improved
sales and
share position. Further growth opportunities are available
for this brand.
Other Beverages
- Frucor's water business has
performed well during the year with fourth
quarter shares being ahead
of the annual data. This category continues to
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grow rapidly with annual growth in petrol of 28.2% and a
fourth quarter
growth in grocery of 34%.
- As discussed above, CSD
market share has fallen, although the category
continues to contribute
to profit. A new media campaign 'Pepsi Chart Show'
has just commenced
on television. This is the first major initiative for the
Pepsi range
since it was added to Frucor's business.
OUTLOOK
The outlook for
revenue growth is positive.
New Zealand continues to grow well on the
back of strong market positions in
the fastest growing
sectors.
Australia represents the greatest immediate growth opportunity
for the
company. The energy drink market is still underdeveloped with
per capita
consumption levels less than half those in New Zealand. With
market share
stabilising after two new entrants, top line growth should
be in line with
the market. And with the company acquiring its own
sales and distribution
capability the opportunity to launch new and
innovative products to the
market is now also possible. Increased
marketing investment is planned for
this market.
The UK market
remains a significant opportunity for Frucor. Per capita
consumption
levels of energy drinks in the off premise market in the UK are
less
than a quarter of those in New Zealand and the market is
experiencing
strong growth. The 2001 performance was disappointing, but
the distribution
gains of recent months have positioned V on a footing
with its key
competitors. The media campaign over this summer and the
resulting revenues
generated will determine Frucor's next moves in this
market.
The full year profit announcement and an update on the
company's performance
in the UK market are scheduled for
14/08/2001. |
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