Asia Pacific challenges hit Lucas Bols sales

The sales of Dutch spirits producer Lucas Bols have been hit by stock reductions in Asia Pacific, but a market growth strategy in North America “paid off”.

Lucas Bols has reported a single-digit sales decline in H1, but the firm’s profits almost quadrupled

Reporting its half-year results for 2015/16, the firm saw revenues decline 2.9% from €40.8 million to €39.m, while net profits almost quadrupled from €2m to €7.7m due to the reduction of net debt and financial costs following on from the group’s IPO launch earlier this year.

Lucas Bols has blamed its sales decline on “one-off” stock reductions in South East Asia and Australia in the second quarter.

In South East Asia, reductions were implemented ahead of an “anticipated” change in distributor from 1 January 2016, while “challenging market circumstances” such as increased import duties in Indonesia also affected revenue.

In Australia, Lucas Bols’ local distributor adjusted its supply chain structure, leading to a reduction of warehouses, which subsequently hit shipments.

North America, in contrast, reported sales growth of 3.4% due to the “success” of the firm’s market strategy for growth. In Western Europe, Lucas Bols struggled in Belgium, Germany and the UK, however declines were offset by a strong performance in Scandinavia and Southern Europe.

In its domestic market of the Netherlands, sales showed “positive trends” as a result of the recent introduction of Bols Vodka and Damrak Gin. Recovery in Russia continued, while sales in Africa were “slightly down”.

“In the past six months we have seen a slight decrease in revenue, mainly in the Asia Pacific region where one-off in market stock reductions in the second quarter impacted revenue.

“In North America we see our market strategy for growth pay-off, with a healthy organic revenue increase of 3.4%.

He added: “With the recent addition of two innovative new flavours to our Bols Liqueur range and the launch of various new marketing initiatives to engage with our markets we continue to strengthen the Bols brand.”

Looking ahead, Lucas Bols predicts that an “ongoing improvement” to the global economy will “contribute to a more positive on-trade environment”, driving the development of its global brands.

In the short-term, the group expects less impact from currency fluctuations and stock reductions on Asia.

Last month, Lucas Bols confirmed that Ketel One Vodka founder Nolet Group had become its largest stakeholder after the firm acquired AAC Capital’s share.