By James Atkinson
Lion’s beer volumes declined 1.3 per cent in the full-year ended September 30, 2013, once the impact of the Little World Beverages acquisition and other new distribution contracts were stripped out of its results.
Alongside the first full-year contribution of the LWB brands, Lion also added distribution contracts for new international premium brands such as Corona Extra, Stella Artois, Guinness and Kilkenny in the latter half of the 2012 financial year and during 2013.
“As a consequence, Lion experienced a one-time benefit, growing volumes 10 percent,” the company said.
“However, underlying conditions in the beer market remained tough, with volumes on a like-for-like basis declining 1.3 per cent.”
Revenue across the entire Lion group increased 4.7 per cent to $5.093 billion due to the one-time benefit of the new volumes. Operating earnings before interest and tax increased 11.7 per cent to $698 million.
Lion CEO Stuart Irvine said: “While we have benefited from the addition of new brands to our beer portfolio in Australia the underlying conditions in the beer market remain tough, with like-for-like volumes in decline. There are however some positive signs that conditions may be on the cusp of improving, with the beer market returning to growth in the last quarter.
“Australians are increasingly choosing quality over quantity in alcohol beverages, which is benefiting our long-term strategy of marketing and innovation investment to encourage consumers to trade up to higher equity brands.”
Lion said the mid-strength segment grew volumes 1.9 per cent off a large base, with XXXX GOLD outperforming the segment at 3.2 per cent growth. Contemporary mid-strength brands also thrived, with Hahn Super Dry 3.5 posting growth over 24 per cent.
“In the last quarter the total beer market showed signs of recovery, moving back into growth,” the company said.
Lion reported that its premium wine business performed solidly in challenging market conditions, with particularly strong performances from Villa Maria and St Hallett; the latter showing strong growth in both domestic and international markets.