Colombia: Grupo Empresarial Bavaria announces Q2 and H1 2005 earnings
Grupo Empresarial Bavaria (GEB), the largest beverage company in Colombia and the second-largest brewer in South America, announced on July 29 a 9.9% increase in sales volume to 8.9 million hectoliters (hl), a 5.7% increase in net sales to Ps. 1.3 trillion, and a 12.6% increase in EBITDA to Ps. 512 billion. All comparisons are with respect to the corresponding prior-year period.
The company also announced an 8.2% increase in sales volume for the first half of 2005 as compared to the first half of 2004, reaching 17.5 million hectoliters (hl) sold. Net sales increased by 4.5% to Ps. 2.5 trillion, and EBITDA increased by 10.2% to Ps. 1.0 trillion in the first half of 2005, compared to the first half of 2004.
Ricardo Obregón, president of GEB, noted: “Record operating results during the second quarter of 2005 reflect the exceptional performance in Colombia and Peru, our two largest markets. The introduction of new packaging as part of brand re-launchings, and the introduction of new brands generated double digit growth. These results demonstrate that the commercial strategy that we are implementing is gaining ground and sets the foundation for solid future growth.”
GEB’s sales volume growth during 2Q2005 reflects the dynamism in each of its markets of operation, created by effective implementation of both price and target-consumer segmentation strategies, generating volume growth across the brand portfolio.
Beer and malt beverage volumes in Colombia grew 10.1% in 2Q2005 as compared to 2Q2004, driven by the strong performance of Póker, the second leading brand in Colombia, which grew 35.0% after it was re-launched early in 2005, and of Costeñita, the value brand which grew 127.9% in 2Q2005 as compared to 2Q2004. New product presentations such as foil caps for can presentations of the entire Colombian beer portfolio and shrink-wrap for can 6-packs also had a positive impact on beer sales volume.
In Peru GEB achieved a 12.9% growth in beer volume during 2Q2005, as the Group’s value brand Dorada has captured 11.8% of beer volume only 6 months after its introduction. Dorada is positioned to counter the launch by a new competitor of their brands in Peru. The recent 500ml hand-grip/wide-mouth presentation of Pilsen Callao also had a strong impact in brand’s volume in 2Q2005, which increased by 9.1% as compared to 2Q2004 and represented 20.5% of beer volumes in Peru.
In Ecuador, GEB continued to prove its competitive strength, as beer volumes in 2Q2005 increased by 7.5% as compared to 2Q2004, led by its leading brand, Pilsen. Pilsen’s volumes grew 8.6% compared to 2Q2004 levels, representing 84.2% of beer volume sold in Ecuador. GEB’s market share in Ecuador remained essentially stable as compared to 2Q2004, despite the entry of a new competitor last October.
Beer volume in Panama grew by 11.4%, driven by an 8.1% growth of Atlas, Panama’s leading beer brand, in 2Q2005, compared to 2Q2004, representing 80.3% of total beer volume sold, and a 16% growth by Balboa, the country’s second leading brand.
Sales volume in the other beverages category were also strong, led by the table water segment, which grew 44.6% in Ecuador during 2Q2005, compared to 2Q2004; positioning GEB’s Manantial brand among the top 4 market players in only 18 months since it was first launched. Water volumes in Colombia grew 21.3%, despite the introduction of a new sparkling water brand from GEB’s largest competitor.
Sales volume during the first semester of 2005 grew 8.2% as compared to the first half of 2004, since the growth trend observed in the beginning of the year was accentuated during the second quarter, with a 6.5% growth from the first quarter to the second quarter of 2005. This growth was driven by GEB’s two largest markets, Colombia and Peru, where the group is concentrating most of its commercial initiatives.
Grupo Empresarial Bavaria (GEB) is the largest beverage company in Colombia and the second largest brewer in South America. Its Águila, Cristal, Pilsener, and Atlas brands are industry leaders in Colombia, Peru, Ecuador, and Panama, respectively. GEB also markets soft drinks, fruit beverages, mineral water, and milk. GEB’s parent company is Bavaria S.A., listed on the Colombian Stock Exchange. www.grupobavaria.com
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