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BUSINESS UPDATE RUSSIA & UKRAINEBUSINESS UPDATE RUSSIA & UKRAINE
The 2The 2ndnd Quarter and 1Quarter and 1stst Half 2004Half 2004
September 2004September 2004
2
Operating Review - 2nd Quarter/1st Half 2004
Outperforms the market both in Russia and Ukraine
Focus on higher margin brands
Extremely strong performance of the global brands
along with the local premium brands
Increased market share both in Russia and Ukraine
The highest net income result
Continued brand and packaging innovations
3
SUN Interbrew Market Share - Russia
Source: SIL estimation, State Statistics Office
14.80%
16.70%
10.00%15.00%20.00%
2Q 2003 2Q 2004
14.00%
16.40%
10.00%15.00%20.00%
1H 2003 1H 2004
Second Quarter 2004
First Half 2004
16.7%
Russia
4
Market Growth. Russia
Vs. the same period of previous year
Source: SIL estimation, State Statistics Office
-5%
-8%
-2%
3%
11%9%
7%5%
9%
25%
6%
33%
20%18%
16% 16%
6%
13%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
January
February
March
April
May
June
July
August
September
October
Novem
ber
Decem
ber
January
February
March
April
May
June
2003 2004
Q2 2004 Market growth was 11%
HY 2004 Market growth was 14%
Q2 2004 SUN Interbrew’s volume growth was 24% HY 2004 SUN Interbrew’s volume growth was 37%
5
SUN Interbrew Market Share - Ukraine
Source: SIL estimation, Ukrpivo, Derzhcomstat
Second Quarter 2004
First Half 2004
33.60% 34.50%
10.00%
20.00%
30.00%
40.00%
2Q 2003 2Q 2004
33.90% 34.40%
10.00%
20.00%
30.00%
40.00%
1H 2003 1H 2004
34.5%
Ukraine
6
Market Growth. Ukraine
Vs. the same period of previous yearSource: Ukrpivo, Derzhcomstat
17%
-6%
7%
12%
31%
34%
-1%
2%
15%13%
2%
29%
5%
24%
35%
21%
-4% -3%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Janu
ary
Feb
ruar
y
Mar
ch
Apr
il
May
June
July
Aug
ust
Sep
tem
ber
Oct
ober
Nov
embe
r
Dec
embe
r
Janu
ary
Feb
ruar
y
Mar
ch
Apr
il
May
June
Q2 2004 Market growth was 3%HY 2004 Market growth was 9%
2003 2004
Q2 2004 SUN Interbrew’s volume growth was 6% HY 2004 SUN Interbrew’s volume growth was 11%
7Source:SIL estimation, State Statistics Office, Business Analytica
Beer Market Volume by Pack. Russia
Bottles share declines at the expense of PET
6% 6% 6% 5% 6% 6%
53% 50% 50% 49% 47% 45%
31% 32% 32% 33% 35% 37%
11% 11% 12% 12% 12% 12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004
Can
PET
Bottle
Keg
8
Beer Market Volume by Pack. Ukraine
Source: Ukrpivo, Derzhcomstat
12% 16% 19% 13% 12% 15%
59%57%
58%57% 55% 54%
28% 25% 22%28% 32% 29%
1% 2% 1% 2% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004
Can
PET
Bottle
Keg
9
RUSSIAMultipacks
Test Market: 2x2 packs for 50cl bottles for 3 brands: Stella Artois®, Beck’s® and Staropramen®
Production in Klin from May 2004
UKRAINELaunch of Rogan Kampai dry beer and
Chernigivske Bila Nich in 0.5l BNR. Volume sold in Q2: 13.87 kHl and 14.38 kHl
In June 2004 launch of Chernigivske Bagryane in KEG 50
Innovation in Brand Varieties & Packaging
10
STELLA ARTOIS® :
RUSSIA52% volume growth in Q2 2004 vs. Q2 2003National TV campaign Cannes Film festival and Movie sponsorship campaign in pressBeer draught Master for Amateurs consumer promotion in 7 Mio+ citiesConsumer program in cinemas in Moscow and all over Russia
UKRAINE57% volume growth in Q2 2004 vs. Q2 2003
“The Day After Tomorrow” Movie promotion: joint with 20th Century Fox: TV & radio & outdoorPrint campaign in cinema and glossy magazinesNational Cinemas campaign
Marketing Q2 2004 milestones
11
BECK’S®:
RUSSIAVolume growth 107% vs. Q1 2004Launch of multi-packs in key accountsNational TV campaign in AprilBeck’s® club program continued in Moscow Distribution push with special incentive programs for distributors and retailAfter launch in March Keg share gain 6% of total brandBeck’s® street cafes installation
UKRAINEBreak Glass and Droplet TV campaignsOOH: city-lights program in 6 key citiesBill-board placementPOS materials, fridges and displays placement program
Marketing Q2 2004 milestones
12
STAROPRAMEN®:
65% volume growth in Q2 2004 vs. Q2 2003
Staropramen® image TV campaign continued till
June
Keg launch supported by consumer program in
on-trade “Czech days with Staropramen®”
Marketing Q2 2004 milestones - Russia
13
HOEGAARDEN® & OTHER BELGIAN SPECIALTIES :
In Q2 2004 SIL Russia took under full control
import of Belgian specialties
Belgian specialties in bottles were launched in
March and kegs in May
Hoegaarden® Kegs sales show good dynamics
and occupy 35 % of total brand sales
Marketing Q2 2004 milestones - Russia
14
SIBIRSKAYA KORONA:
63% volume growth in Q2 2004 vs. Q2 2003National TV campaign “Yantarnoye”
Start of “Birthday with Siberian Crown” promo
6 biggest cities
high response rate – 800 participants per day
word of mouth effect
Marketing Q2 2004 milestones - Russia
15
KLINSKOYE:
27% volume growth in Q2 2004 vs. Q2New Klinskoye Arriva extension in
transparent bottle is the main driver for Klinskoye growth
“Break through” in the East with +119% volume growth in Q2 2004 vs. Q1 2003.
Marketing Q2 2004 milestones - Russia
16
TOLSTIAK:
5% volume growth in Q2 2004 vs. Q2 2003
New Tolstiak Grechishnoye variant reached 4% in brand portfolio and became #1 Buckwheat beer in the world
Advertising campaign on TV
Marketing Q2 2004 milestones - Russia
17
CHERNIGIVSKE:Chernigivske market share in Q2 2004 grew to 18,9% (vs. 15,2% in Q2 2003)
Quality TV campaign around Klitschko fightsImage TV campaign continued Launch of Chernigivske Bagryane – Ukrainian Red beer – in 1lt PET
CHERNIGIVSKE Bile :
New TV campaign
Launch of Bila Nich – dark unfiltered line extension of Bile – in 0,5 lt glass bottle
Marketing Q2 2004 milestones - Ukraine
18
ROGAN:Rogan market share in Q2 2004 grew to 10,9%
(vs. 9,7% in Q1 2004)
“Hello, Rogan!” national consumer promo campaign launched for April-July in partnership with Kyivstar -one of the two biggest Ukrainian mobile communications operators
New Rogan line-extension launched – RoganKampai, bottle 0,5
Regional consumer promo campaign launched in on-trade in North-East and South-East linked to European Football Championship 2004
Rogan Legke switched to BNR bottle
Marketing Q2 2004 milestones - Ukraine
19
Volume
Net Sales
Gross Margin
Operating Income
EBITDA
EBITDA Margin
Net Income
Key figures of the second quarter 2004*
88.7%+10.311.621.8
-1.7%25.8%24.1%
37.9%+14.337.651.9
46.7%+10.221.832
-3.7%44.6%40.9%
47.8%69.8146215.7
17.5%+0.94.95.8
Q2 2004 Q2 2003 Change Change, %
*Figures are given in m hl, €m, %
20
Key figures of the first half 2004*
344.8%+15.54.520
0.1%19.7%19.8%
52.8%+23.945.269.1
87.8%+17.519.937.3
-2.4%41.3%38.9%
52.5%120.3229.1349.4
28.3%+2.17.59.7
HY 2004 HY 2003 Change Change, %
Volume
Net Sales
Gross Margin
Operating Income
EBITDA
EBITDA Margin
Net Income
*Figures are given in m hl, €m, %
21
Cost Management
HY 2004 HY 2003 Change
Gross profit, €/hl
Sales, marketing and distribution costs/Net sales,
%
General and Administrative expenses/ Net
Sales,%
-1.4%5.3%3.9%-0.9%4.3%3.4%
-3.0%27.3%24.3%-2.7%25.3%22.6%
11,0%12.614.014.5%13.315.2
Q2 2004 Q2 2003 Change