Poland: Kompania Piwowarska, increasing its lead in the beer industry in Poland

1. SALES RESULTS IN 4TH QUARTER OF 2005 AND IN 12 MONTHS OF 2005

The last quarter of 2005 (1 October – 31 December 2005) was exceptionally successful for Kompania Piwowarska, with beer sales and market share amounting to 2.48 million hectolitres (Hl) and 38.3% respectively. These results represent sales growth of 9.5% against the same period last year, the company announce on February 1.

During the twelve months of 2005 (1 January – 31 December) Kompania Piwowarska beer sales exceeded 11.2 million Hl. This is another record result – no Polish beer producer has ever before reported sales of over 11 million Hl within a calendar year. KP managed to achieve 12.6% growth in sales for the full year (KP sales in 2004 were 9.96 million Hl), which is two and a half times industry growth of 5.1%.


2. MARKET SHARE IN 12 MONTHS OF 2005

KP’s market share for the 2005 calendar year amounted to 37.1%, an increase of 2.5% over 2004 (2004 market share was 34.6%). This was the second consecutive year that KP’s market share increased by 2.5% (the same increase in market share [2.5%] was reported in 2004).

PERIOD / ITEM DATA
Industry sales growth in 2005 5.1%
Fourth quarter of 2005
- domestic sales 2.48 MHl
- sales growth +9.5%
- market share 38.3%
- market share lead over nearest competitor +4.2%
Full year 2005
- domestic sales 11.2 MHl
- sales growth +12.6%
- market share 37.1 %
- market share lead over nearest competitor +3.8%


Kompania Piwowarska has been the market leader since June 2004, although the final, full year result in 2004 was behind that of its main competitor by 0.1%. However, throughout the past year, KP extended its lead, resulting in a full year lead in 2005 of 3.8%.

Exports have been growing strongly too. Within the last six months, Kompania Piwowarska exports increased by 95%, with Tyskie representing more than two thirds of these export sales. Its exports are targeted mainly at consumers in the United States, Canada, Germany, the UK and Ireland.


3. MAJOR ACHIEVEMENTS IN 2005

Kompania Piwowarska achieved many successes during the 2005 calendar year. The following list highlights some of these major milestones:

Dog in the Fog launch
In 2005 Kompania Piwowarska successfully launched the new brand “Dog in the Fog”; a beer of a noticeably smooth taste, being an attractive offer for young, adult consumers, male and female, with a sense of humour. The launch included innovative advertising and PR campaigns.

Financial results for F05
In May 2005 Kompania Piwowarska announced its financial results for the financial year F05 (April 2004 – March 2005), with reported net profit of PLN 481 million on sales revenue of more than PLN 3.3 billion. This made KP the most profitable beverage company in Poland.

Customer service excellence
According to independent research conducted by PENTOR, Kompania Piwowarska has been named the unquestioned leader among all brewers in Poland in the area of service excellence, having achieved the highest levels of customer satisfaction. While we lead in satisfaction ratings overall, we are very proud to be rated the best supplier by distributors, retail chains, traditional retail outlets and the on-trade in Poland.

Tyskie as a national icon
Tyskie was the Major Patron of the Polish National Exhibition during EXPO 2005 in Japan. A day of Polish Beer was held at the exhibition with participation by the Polish government and the official business delegation. The long line of Japanese visitors in front of the Polish pavilion was further proof that the superb quality of Tyskie beer is recognized by consumers across the globe. At the same time a series of 45 "biesiady" events took place in cities across Poland. Participants in "biesiady" this year exceeded 200,000 consumers.

Tyskie proclaimed the best beer in the world
Tyskie, the most popular Polish brand, has been honoured with the most prestigious award in the global beer industry: the Gold Medal and the Champions Award at the Brewing Industry International Awards. Tyskie has repeated its success of 2002 as the winner of these two outstanding awards. The Brewing Industry International Awards have been organized since 1886.

Investments in capacity expansion
Kompania Piwowarska's annual production capacity currently stands at 12.5 million Hl. In 2005 an investment plan worth PLN 300 million was executed. All three our breweries (Tychy, Poznan and Białystok) are presently undergoing further capacity upgrades.


4. MANAGING DIRECTOR COMMENTS (*)

(*) Kompania Piwowarska’s Managing Director, Karl Lippert, was appointed last week as President of Bavaria SA, the Colombian subsidiary of SABMiller's recent acquisition in South America. Karl Lippert will take over this position on February 13th, 2006.

"Last year was a tremendously successful period in the history of Kompania Piwowarska, a period where the people of KP demonstrated their awesome capabilities. The wonderfully talented people of KP have helped us become the most admired brewing company in Poland, excelling at every aspect of its operation. It is their passion and support that have delivered these superb sales results, our exceptional marketing, our ever improving customer service, our world class production and our high level of corporate social responsibility, all of which have served our customers and consumers, our suppliers, our shareholders, and the communities in which we operate.

I believe the future growth of both Kompania Piwowarska and the brewing industry in Poland will depend on further changes in Polish society: evolving lifestyles, infrastructure modernisation and urban development and stronger integration into the European Union. The ability of the brewing industry to demonstrate its corporate social responsibility and its engagement with important social issues, are inextricably linked with its future success.”


***

Kompania Piwowarska - The industry leader in Poland
Kompania Piwowarska is the biggest and the most profitable company in the brewing industry in Poland. Several hundred years of brewing experience, modern technology and rigorous adherence to World Class Manufacturing principles guarantee the uncompromising quality of its products. Its brand portfolio includes: TYSKIE, the favourite beer of Poland, ZUBR, LECH, Dębowe Mocne, Pilsner Urquell, Redd's, Dog in the Fog and Miller Genuine Draught. Kompania Piwowarska was established in 1999 as a result of the merger of Tyskie Browary Książęce and Lech Browary Wielkopolski. In 2003, the company acquired Browar Dojlidy. In the financial year ended on 31 March 2005, Kompania Piwowarska achieved a net profit of PLN 481 million on sales revenue of more than PLN 3.3 billion.

SABMiller - The second biggest global brewer
Kompania Piwowarska is part of SABMiller plc, one of the world's largest brewers with brewing interests or distribution agreements in over 60 countries across five continents. Last year SABMiller sold over 187 million hectolitres of beverages, producing and marketing over 150 beer brands. These include such international names as Pilsner Urquell, Miller Genuine Draft, Peroni Nastro Azzurro and Castle Lager as well as major regional brands such as Miller Lite, Snow and Tyskie. In addition to beer, SABMiller also owns Appletiser, the international sparkling fruit juice brand, and is one of the world's largest bottlers of Coca-Cola products outside the US. In the financial year ended on 31 March 2005, SABMiller achieved profits (before tax) of $2.2 billion, on sales of $14.5 billion. Recently SABMiller has announced its merger with Colombia based "Bavaria", the second biggest brewer in South America.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .