Australia: Kirin’s Lion Co sees another year of declining sales and earnings in 2017
Japanese brewer Kirin is hoping for a turnaround at food and beverages group Lion Co this year after another year of declining sales and earnings in 2017, AFR.com reported on February 14.
Figures released by Kirin show operating profits at Lion slipped 6.3 per cent to A$609 million in the 12 months ending December following an 8.2 per cent slump in revenues to A$4.04 billion.
According to Kirin's accounts, Lion Beer Wine and Spirits earnings fell 7.5 per cent to A$632 million after revenues fell 12.6 per cent to A$2.26 billion and volumes went backwards 10.5 per cent.
Sales of craft beers such as James Squire 150 lashes, Furphy and Iron Jack grew strongly, but Lion surrendered its position as market leader in the flat A$14 billion beer market after terminating its distribution agreement with global brewer AB InBev and losing popular brands such as Corona.
Industry players say Lion's market share is now around 42 per cent, while CUB holds around 46 per cent.
Revenues were also dented by the sale of Lion's wine business, Fine Wine Partners, which owned brands such as Petaluma, Croser, St Hallett and Stonier, for an estimated A$100 million to private equity-owned Accolade Partners in November 2016.
Excluding the impact of the AB InBev contract loss and the sale of Fine Wine, underlying sales and earnings in the beer wine and spirits business were flat.
"The company has focused on continuing to strengthen its core brands and investing in growth categories to return to profitable growth in the medium- to long-term," Kirin said.
Lion's revenues have fallen about 20 per cent over the last four years, from A$5.1 billion in 2013 to A$4.04 billion, and earnings have fallen more than 10 per cent, from a reported A$698 million in 2013 to A$609 million.
However, Kirin expects Lion's sales to grow 6.1 per cent and earnings to improve by 3.3 per cent in 2018, with higher prices and better product mix offsetting volume pressure from the introduction of container deposit schemes in NSW and Queensland (Queensland has postponed the launch from June to November.)
Kirin acquired a 46 per cent stake in Lion in 1998 and took full control in 2009.
Wstecz
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