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Edrington full-year sales up 11%
Scottish spirits firm Edrington saw revenue rise by 11% in the year to 31 March 2024, led by double-digit gains for The Macallan.
Edrington, which also owns The Famous Grouse and Brugal, reported full-year revenue of £1.16 billion (US$1.47bn).
The company said it had delivered growth despite a global drop in consumer spending in the second half of its financial year.
Edrington surpassed £1bn in revenue for the first time during its previous financial year after growing by 22%.
Profit before tax rose by 6% to £411m (US$521m) during 2023/24 and brand investment increased by 16% to £262.1m (US$332.1m).
Core contribution (profit from branded sales and distribution after the deduction of overheads) grew by 16% to £454.8m (US$576.1m).
Chief executive Scott McCroskie said: “Edrington has navigated a challenging year to deliver financial results that are among the best in the spirits industry. Our strategy of focusing on ultra-premium spirits continues to deliver healthy brands and a strong underlying performance.
“However, we consider that the economic pressures that we saw in the second half of last year will adversely affect demand. While we will continue to invest in our brands, in our operations and in sustainability, the business is planning for the coming year on the basis of lower levels of growth than we have experienced since the end of the pandemic.”
The company said its leading brand, The Macallan, saw ‘high demand’ for products such as its collaboration with Bentley Motors and the latest addition to the Harmony Collection.
Igor Boyadjian, managing director of The Macallan, said: “The Macallan has continued to build on its position as a leader in the prestige spirits category over the past year, delivering double-digit growth during a period of significant global challenges.”
In 2023, the group acquired the Vasyma cooperage in Jerez, Spain, to guarantee its supply of Sherry-seasoned casks. It also purchased a 50% stake in its main supplier of American oak, Coopers Oak of Ohio.
The Famous Grouse also delivered its fourth consecutive year of growth.
Low-value products discontinued
Speaking about the group’s ‘estate brands’ business unit, the division’s managing director, Suzy Smith, said the past year had been “one of significant challenge but also progress”.
“The global economic downturn coincided with the execution of our premiumisation strategies for Highland Park and The Glenrothes,” Smith noted.
“The decline in consumer spending and trade destocking in the second half of the year have intensified the impact of our planned reduction in volume as we discontinued lower-value products that are not aligned with the brands’ ultra-premium strategies.
“We have continued to invest behind both Highland Park and The Glenrothes to ensure they are well placed for growth as the global economy recovers.”
Wyoming Whiskey has also been integrated into the estate brands portfolio, after Edrington acquired a controlling stake in the business in March 2023.
Meanwhile, Brugal rum has “steadily strengthened its brand equity and delivered sustained profit growth”, according to the brand’s managing director, Augusto Ramírez.
Brugal 1888 delivered double-digit growth, led by its home market, the Dominican Republic.
Ramírez added: “In the coming year we will invest across the business to strengthen our operations with the infrastructure and capabilities to support our ultra-premium vision and deliver further growth.”
Edrington also highlighted Asia Pacific as a region that showed ‘strong growth’, driven by China.
McCroskie added: “Our EMEIA region, encompassing Europe, the Middle East, India and Africa, performed well, whilst markets in the Americas were most affected by weaker consumer demand.”
In March this year, Edrington UK and Beam Suntory agreed to end their distribution deal after more than 25 years. The move is due to come into effect on 31 January 2025.
The two companies also entered into an agreement to sell their investment in joint venture Maxxium Cyprus and its Russian subsidiary to the local management in 2023. Before the disposal, Edrington received a £10m (US$12.6m) dividend from Maxxium Cyprus and realised a gain of £2m against the previous year impairment of the investment in Maxxium Cyprus.
The Wyoming Whiskey deal also resulted in a net gain of £6m (US$7.6m).
Excluding these ‘exceptional items’, Edrington’s profits decreased by 10% to £164m (US$207.7m).
‘Difficult to forecast’
McCroskie said it was “difficult to forecast confidently in an environment of significant economic and geopolitical volatility” in his outlook for the future.
“Our sense is that tougher trading conditions will remain for this coming financial year,” he continued. “Whatever the backdrop, I believe that Edrington’s ultra-premium strategy will continue to serve the business well, including generating results among the best in the industry. I am confident that the company is well positioned to deliver further success in coming years.”
The company is aiming to achieve net zero by 2045.
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