UK & Denmark: BBH forecasted incremental synergies of US$20 million in 2007
An AFX report of November 08th said that Baltic Beverages Holding, the 50/50 joint venture between brewers Scottish & Newcastle PLC and Carlsberg, is targeting incremental synergy savings of US$20 million in 2007, on top of the US$80 million expected to be achieved by the end of 2006.
BBH, which reported EBIT growth of 47.1 pct to €196 million in the third quarter, had previously forecast synergy savings or €60-80 million by the end of 2008.
In a conference call, chairman John Nicolson said the integration of the group's four brewing businesses was proceeding 'ahead of plan', with the company expecting a further US$20 million in synergies in 2007.
Net sales for the period were up 23.4 pct at €685 million as the group reported volume growth of 15 pct in Russia, 1 percentage point higher than the market.
BBH said it expects the Russian beer market to grow 8-9 pct this year, driven by 'exceptional market conditions', moderating to 3-5 pct over the medium term.
The company continues to expect to achieve price increases just below the level of local food and beverage inflation, and added that it expects margins to be around 23 pct for the full year, reflecting a one-off benefit of around 100 basis points from the third quarter as the beer category benefited from supply shortages in wines and spirits.
Nicolson said the interruption in supply of wines and spirits resulting from the changes in legislation in Russia was a 'phenomenon of the market - it has come, been and gone'.
BBH reported volume growth of 7.8 pct in Ukraine against market growth of 17.9 pct, but added that management is focused on implementing a turnaround plan to improve performance in the country.
The Baltic markets saw combined market share increase 1 percentage point to 44.5 pct, while in Kazakhstan registered volume growth of 37.7 pct, almost double the market growth rate.
BBH said it planned to increase capital expenditure to around €300 million for the full year to meet volume growth across its markets.
Scottish&Newcastle finance director Ian McHoul expects capital expenditure to be 'at least' the same level in 2007.
Wstecz
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