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Passoã JV drives Lucas Bols FY gains

Dutch spirits producer Lucas Bols has reported strong revenue growth of 10.5% to €80.5 million (US$90.3m) in 2016/17, bolstered by its Passoã joint venture with Rémy Cointreau.

Lucas Bols saw strong full-year revenue growth of 10.5% in 2016/17, driven by its Passoã JV

The agreement saw Bols take over the day-to-day management of Passoã liqueur in December 2016, and was described as a “major highlight” of the company’s strategy to “further leverage” its production and distribution platform, contributing €5.1m to revenue.

Foreign currencies had a positive impact of €0.3m due to strengthening of the Japanese yen, Australian dollar and Russian rouble, however this was offset by a weakening of the pound sterling and Latin American currencies.

Net profit increased by 28.6% to reach €15.1m in the 12 months to 31 March 2017, up from €11.7m in 2015/16, driven by a one-off tax benefit.

Revenue from Bols’ global brands, which includes Bols Liqueurs, Bols Genever, Bols Vodka, Damrak Gin, Passoã, Galliano and Vaccari Sambuca, increased by 14.8% in 2016/17 to hit €57.8m.

This result was driven by Passoã and double-digit revenue growth of its Italian liqueurs. The latter was bolstered by the recovery of Galliano shipments to Australia, and brand growth in Italy, Canada, the US and the Netherlands.

Bols Vodka posted good growth in the Netherlands and Scandinavia, offset by a decline in Canada due to “heavy price competition”. Bols Genever and Damrak Gin continued to achieve strong revenue growth, while the company’s liqueurs range delivered low single-digit growth thanks to improvement in the second half year.

Regional brands – comprising Dutch Genevers, Vieux, Pisang Ambon, Coebergh and continent/country-specific brands such as Regnier Crème de Cassis in Japan – delivered 1.8% revenue growth reaching €22.7m.

This is credited to a strong performance in Africa and “further strengthening” of the group’s Dutch market share of domestic spirits, which is now more than 30%, thanks to the acquisition of the Floryn and Legner genever and Leyden Gin as part of blending and bottling joint venture Avandis.

Lucas Bols reported reported revenue growth across all markets, with “significant organic growth” of 20.1% in emerging markets, with an “excellent performance” in Eastern Europe and Africa.

The Asia Pacific region increased by 5.3% organically due to the recovery of shipments to Australia and New Zealand, while North America continued its strong performance, up by 4.7%, partly offset by a decline in Canada.

Western Europe hit -2.3% on an organic basis, an improvement on 2015/16 as a result of strong global brand growth.

Bols increased its local regional presence last year, relocating its commercial director Asia-Pacific from Amsterdam to Singapore and strengthening its commercial team with a number of appointments.

“Following the important steps we took in our route to market in the 2015/16 financial year, in 2016/17 we were able to consolidate our expanded distribution network,” said Huub van Doorne, CEO of Lucas Bols.

“Increased investments focused both on strengthening our commercial team and raising A&P spending already started to bear fruit in the past year, as evidenced by the 4.2% organic growth of the global brands.

“We further leveraged our asset-light business model, adding the iconic Passoã brand to our portfolio of global brands in the second half of the year. Despite substantially increased investment levels, EBIT in 2016/17 was broadly in line with 2015/16.

“In accordance with our dividend policy we are pleased to propose a final dividend of €0.26 per share, resulting in a total full-year dividend of €0.57 per share, up 6% compared to last year.”

Looking ahead Lucas Bols foresees medium-term revenue growth for its global brands, and the benefit of Passoã results for the full 12 months of 2017/18.

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