By Andrew Starke
Lion Nathan National Foods (LNNF) yesterday (Feb 10) announced results for the 2010 financial year, revealing a slow-down in volume growth over the second half.
The subsidiary of Kirin Holdings said Lion Nathan's brewing and wine operations had delivered operating earnings before interest and tax of $597.7 million, an increase of 7.3 percent on the previous year.
A solid performance from Lion Nathan Australia (LNA) underpinned this result with net sales revenue growing by 4.1 percent to $1.65 billion, while volumes increased by 0.7 percent including cider or 0.2 percent excluding cider.
“The second half was characterised by strong competitive activity which failed to stimulate volume growth,” said the company in a statement to investors.
“Despite a strong start, at the end of the year the market was broadly flat in volume terms.”
LNA’s ‘master’ brand portfolio continued to grow its share of portfolio mix and now represents 82 percent of total volume.
“Our alcohol businesses delivered a solid performance against the backdrop of increasingly challenging market conditions,” said LNNF CEO Rob Murray.
“Consumers continue to trade up to more premium brands and this is driving revenue growth.”
According to LNA, XXXX Gold continued its growth while the Hahn Super Dry brand also had a strong year with volume growth of 31 percent off a large base.
Recent innovations XXXX Summer Bright Lager and Tooheys Extra Dry 5 Seeds are now established in the marketplace.
James Boag’s Premium volumes grew by 21 percent, while Boag’s Draught grew 11 percent.
Earlier this week, LNNF announced management changes relating to NF and LNNZ and Global Wine.
Peter Kean, currently managing director of LNNZ and Global Wine businesses has been appointed managing director NF, from April 1, 2011.
Kean replaces Andrew Reeves who is leaving the business to take on the role of CEO for George Weston Foods, based in Sydney.
An announcement on Peter Kean’s successor will be made in due course.
The company also commented on the impact of a range of factors, including the Queensland floods on operations.
“Rising interest rates and the ongoing economic uncertainty have had an impact across the FMCG and retail sectors in both Australia and New Zealand,” said Murray.
“Since the end of the year, this has been compounded by a series of weather events, particularly in Queensland which is a relative stronghold for our business.”