Lucas Bols expects sales decline in 2015/16

Dutch spirits producer Lucas Bols has been hit by stock reductions and foreign exchange fluctuations, thus forecasting a 4-6% sales decline in 2015/16.

Lucas Bols has warned that its sales and operating profits are forecast to decline in 2015/16

Ahead of announcing its results for the 2015/16 fiscal year in June, Lucas Bols has released a statement claiming that a “combination of factors” has had a “short-term impact” on its sales.

Stock reductions by distributors and streamlining routes to market together with global economic uncertainty and currency turbulence have had a negative impact on the firm’s global markets, including the travel retail sector.

As such, Lucas Bols said its 2015/16 sales are expected to be 4-6% lower than in 2014/15. Operating profit is forecast to be 8-9% lower than last year, impacted by “one-off” stock reductions that amount to an estimated loss of €2 million.

However, net profit is expected to increase from €3.8m in 2014/15 (excluding IPO costs) to €11-12m in 2015/16, when financial costs “significantly” decreased.

The group experienced stock reductions in Australia and South East Asia in the first half of the latest financial year, and further reductions in the US during the second half due to a merger between two distributors.

“Although we experience a negative impact on our revenue on the short-term, we remain confident in our mid-term outlook of 3-4% annual growth on average for our global brands,” said Huub van Doorne, CEO of Lucas Bols

“The investments behind our brands and in our commercial organization will contribute to the mid-term growth of our global brands and the continued stabilisation of the regional brands.”

At the same time as revealing its profit and sales estimations, Lucas Bols said it has signed a number of new distribution contracts across Asia, Africa, South America and Europe.

The group has also recently launched three new flavour variants in its Bols Liqueurs range – Bols Pink Grapefruit, Bols Pear and Bols Ginger – as well as Galliano L’Aperitivo in the Galliano range.

“We are pleased to announce various enhancements to our distribution platform as well as the launch of several new flavours and range extensions,” added Doorne. “These are important steps in building and strengthening our brands.”

Lucas Bols will spend an additional €2-3m annually on growing its global brands.