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News
MBWS FY sales fall €14.6m due to destocking
Paris-based drinks group Marie Brizard Wine & Spirits saw its sales fall by €14.6 million (US$15.9) in 2016, caused by destocking following a number of new distribution contracts in key markets.
Marie Brizard Wine & Spirits saw its sales fall by €14.6 million last year
Net sales excluding excise tax totalled €431.3 million for the full-year 2016, down 1.8% on the previous year at a constant perimeter and excluding the impact of foreign exchange.
If cancelled contracts and the full-year perimeter effect were taken into account, total net sales would be €451.05m.
The Central and Eastern Europe region reported FY 2016 net sales of €93.5m, a 3.3% increase on the previous year.
Despite a ‘sell-in slowdown’ in Q4 2016 caused by new route-to-market configuration, Poland accounted for 68% of sales, reporting full-year net sales of €64m. This represents 1.7% growth, excluding the foreign exchange impact, and was driven by the “dynamic” growth of MBWS’s pillar brands.
The “strong” performance of Krupnik liqueur in the region led the brand to grow 5.6% volume in 2016. Blended whisky brand William Peel’s growth also accelerated, with volumes increasing by 280%.
The Western Europe, Middle East and Africa market reported net sales of €139.6m for the full-year, a decrease of 0.9% on the previous year. Vodka brand Sobieski exhibited “dynamic” growth in 2016, with 24.5% volume growth in 2016.
“2016 was a structurally significant year for MBWS on a number of fronts,” said Jean-Noël Reynaud, CEO of Marie Brizard Wine & Spirits.
“MBWS’ pillar brands continued to deliver market share gains in France and Poland, providing evidence of consumer preference for MBWS brands and the strength of our mainstream business model. The group now has the management structure required to achieve its ambitious growth objectives.
“However, the year was not without headwinds. After putting in place a number of new distribution contracts in key markets, required for the next growth phase, MBWS faced destocking related to these new agreements. These factors have continued to negatively impact MBWS’ business into the first quarter of 2017.”
Consolidated net sales in the first quarter of 2017 totalled €86.6m, an increase of 2.6% compared to Q1 2016 on an organic basis excluding foreign currency impact. Including the effect of foreign exchange, Q1 2017 net sales increased 3.2% on the previous year.
Volume sales of MBWS’s pillar brands decreased by 10.8% in Q1 2017 – the consequence of sales decreases for Krupnik in Poland, Sobieski in the US, and Fruits and Wine in France.
However the positive performances of William Peel, up 8.7%; Cognac Gautier, up 17.1% driven by China; and Marie Brizard, up 4.2% due to growth in the on-premise channel in France and the US offset these declines.
In recent years the company has undertaken a number of initiatives as part of its BiG 2018 strategy in a bid to boost profits – executing route-to-market contracts in key markets of Poland and the US, accelerating pillar brand growth across all geographies, and implementing an optimisation programme, which most recently includes the finalisation of a vodka distillation plant in Poland at year-end 2017.
While the rationalisation and optimisation components of the BiG strategic plan delivered gross margin expansion in 2016, Reynaud said, the impact of recent developments has seen the anticipated completion date for the strategy’s previously-announced revenue and EBITDA targets pushed back by two years, in full agreement with MBWS’ board of directors.