FDBusiness.com

The Eckes-Granini Group, the international producer and supplier of non-alcoholic beverages under the umbrella of Eckes AG, ended business year 2014 with an above average gain in earnings before interest and taxes (EbIT) despite falls in sales volumes and turnover.

“This is clear evidence of the fruits of our efforts, some of which involved substantial investments and ground-breaking work,” notes Executive Board Chairman and CEO Thomas Hinderer. He is very pleased that Eckes-Granini has succeeded in sustaining the positive momentum that was already apparent in 2013.

The Eckes-Granini Group suffered slight losses in volume sales, turnover and value-based market share. Turnover fell by 1.3% to € 899 million (2013: € 911 million). Volume sales were also down slightly (-1.9%) to 886 million litres (2013: 902 million litres). “The volume sales decline is largely attributable to the consistent implementation of our pricing policy”, explains Thomas Hinderer. This led in some cases to temporary distribution losses and/or reduced promotional activity.

Nevertheless, the Eckes-Granini Group achieved an above-average increase in earnings before interest and taxes (EbIT) from € 58.3 million (2013) to € 76.2 million for the past business year. That equates to a gain of 30%, which was fuelled in large measure by the successful integration of Pago, which was completed during the year. “Following the initial onetime effects resulting from extraordinary expenditures in 2013, the synergies generated by the acquisition were reflected as planned in earnings gains last year,” Thomas Hinderer explains. Synergies were generated in particular through the shift of Pago production for all markets outside of Austria to the French plant in Mâcon and the merger and consolidation of operational subsidiaries in Austria, France and Spain. “We have also implemented cost-cutting programmes in all areas. We undertook a critical review of all aspects of our business (except for the quality of our products and our employees) – from production procedures and potential improvements in packaging materials to the harmonization of IT processes.”

The fruit beverage market served by the Eckes-Granini Group (data from 12 core countries, retail food trade) remained under pressure in 2014. Turnover declined by 1.2%, while volume sales were down 1.9% compared to the preceding year. The primary cause of volume losses was the price gap between fruit juices/nectars and other non-alcoholic beverages, which has widened considerably in recent years.

Despite a slight decline in market share to 11.4% (2013: 11.7%), the Eckes-Granini Group maintained its leading position in this market in 2014.

The Eckes-Granini Group expects that the fruit beverage market will remain under strong pressure on the volume side during the current business year. “Nevertheless, we aim to achieve moderate gains in volume sales and turnover in our core fruit beverage business”, says Thomas Hinderer in explaining his optimistic assessment of future prospects. With that in mind, the Group plans to increase its expenditures for product advertising by an additional 20%.