The headline: Altadis on target as all key indicators were positive in 2002, despite “difficult duty free trading”
Key figures: Net profit result up by +14.5 % to € 435million (US $473million). +7.4 % growth of blond cigarette sales. +8.4 % growth of cigar sales in the US, the most important cigar market worldwide. EBITDA up by +9.5 % to € 971million ($ 1,055million).
Comment: Altadis, the tobacco supplier formed from the merger of Seita and Tabacalera has announced strong growth in 2002, despite a difficult duty free trading environment. Although the global duty free tobacco market dipped slightly overall, Altadis said it grew market share over the year, thanks to a strong performance by Gauloises in Europe and Gitanes in the Middle East.
For the third year in a row, all key financial indicators were positive. Altadis said that apart for the impact of recent dollar exchange rate movements, the general pattern of operations during the year was similar to the activity until September, and in many cases a better performance. Specifically for the fourth quarter, sales increased by +3.5 % excluding the dollar impact and by +1.7 % in euros.
In the course of the restructuring plan in Spain, eight factories have now been closed and two new ones have been built, with approximately € 52 million (US $56 million) cost savings captured in 2001 and 2002. The cigarette division, which represents 53 % of group sales achieved a +4.3 % sales growth to €1,689 million (US$ 1,836 million) with positive trends in all blond cigarette markets, and an almost stable level of sales in value for dark cigarettes. Gauloises Blondes played its role of spearhead brand. Sales of the brand have grown by +8.5% and its international sales have grown by +9.5 %. Altadis said past trends for this brand have been confirmed. 2002 also brought a new step for the internationalisation of Fortuna. The brand was launched in May in Italy and on the French market has been improving its market share. Price increases, improved mix of sales and the restructuring benefits have been the combined drivers of this improvement.
For the cigar division, which represents 24 % of group sales, the US market is essential taking 60 % of cigar sales. The performance in the US, where Altadis is the leader, has been strong with dollar sales up +8.4 % during the year, driven by both popular and natural cigars. Altadis cigar sales in France increased +3.2 %. Meanwhile Cuban cigar sales have been strongly affected – as with all luxury goods- by the global environment and the slowdown of international travel. As a result of these mixed trends, overall cigar sales declined by -3.3 % to € 755 million (US$ 821 million) but this equates to a slight increase in dollar terms.
Speaking to DFNI Altadis duty free manager cigarette division Jean-Philippe Aucher commented: “Gauloises Blondes was very successful in Europe and Gitanes has exploded in the Middle East, as people in that region are switching from American to European brands. I am optimistic that 2003 will be a much better year in duty free.” This year’s Gauloises global airports promotion launches at Moscow Sheremetyevo airport in May and will run at 35 airports until November.
