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The launch of Absolut Ruby Red, a vodka flavoured with ruby grapefruit, was announced earlier this year |
SWEDEN. V&S Absolut Spirits, part of V&S Group, lifted its net sales by +20% to SEK1,322 million and its operating profit by +22% to to SEK 423 million in the first quarter of 2006, on the back of strong sales of Absolut Vodka.
V&S Absolut Spirits’ sales volumes increased by +11% to 2.3 million nine-litre cases during the January to March 2006 period. Just over half of this rise was due to the acquisition of Cruzan Rum, the company said. The organic portion of growth was mainly due to continued strong worldwide development of Absolut vodka, as well as to volume increases for the division’s other products.
As a whole, V&S Group’s first-quarter operating profit improved by +31% to SEK417 million. Group net sales rose +16% to SEK2,320 million.
Profit for other business areas was more on a par with 2005, the company said.
“The group’s strong results are due to several factors,” said V&S Group CEO Bengt Baron. “We have an improved product mix and better cost control, and are continuing to focus on our core business. The US dollar exchange rate has also had a positive impact on the figures.”
The company said the market for international premium spirits brands continued to increase in North America, Europe and East Asia. Demand for traditional local spirits in Northern Europe was falling, while demand for wine in the Nordic region was increasing.
Highlights of the first quarter 2006:
• The group’s net sales climbed by +16% to SEK2,320 million. The increase was due to organic growth, acquisitions, and a more favourable US dollar exchange rate than in the same period last year.
• Operating profit jumped by +31% to SEK417 million. The increase was due both to an improved product mix, better cost control and a stronger dollar exchange rate.
• Profit after tax increased by +20% to SEK251 million.
• Total sales volumes in the first quarter amounted to 5.2 million nine-litre cases, a decrease of -2% on last time. The reduction was attributable to divestments of operations and lower volumes for local brands. Absolut and the group’s other international brands lifted their volumes.
• An agreement was signed to acquire all outstanding shares in Cruzan International Inc, making it a wholly-owned subsidiary.
• An agreement was signed for the sale of the Danzka Vodka brand. Production will, however, continue in Denmark.
• The launch of Absolut Ruby Red was announced, a vodka flavoured with ruby grapefruit. Sales will begin during the spring.
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