CIDER - GREAT BRITAIN (GB)
heading
bottle collection

MAGNERS GAYMERS
Constant Currency(i) FY2012
€m
FY2011
€m
Change
%
FY2012
€m
FY2011
€m
Change
%
Revenue 136.4 131.0 4.1% 113.4 147.5 (23.1)%
Net revenue 107.6 106.8 0.7% 65.2 83.7 (22.1)%
- Price /mix impact (2.1)% 5.1%
- Volume impact 2.8% (27.2)%
Operating profit 25.2 23.8 5.9% 4.3 4.0 7.5%
Operating margin (Net revenue) 23.4% 22.3% 1.1ppts 6.6% 4.8% 1.8ppts
Volume (khl) 765.8 745.3 2.8% 1,152.4 1,582.8 (27.2)%


Cider category(ii): The GB cider market had another strong year of both volume and value growth. Per Nielsen/CGA, the GB cider market grew 5% in volume terms and was the only category of alcoholic drinks to grow volume year on year. New entrants to the market and fruit variations have had a premiumising effect and contributed to attractive retail value growth of 14% for the category. Traditional ‘standard’ ciders lost some ground during the year.

Magners: Overall it was a positive year for the Magners brand with revenues showing positive growth for the first time in five years. With challenging economic headwinds, dampening consumer spending and significant new entrants into the market, the brand performed well across both channels of trade. Net revenue grew 0.7% with volume increases of 2.8% offsetting the negative price/mix of 2.1%, attributable to ongoing channel shift. This performance compares favourably to the 7.1% negative price/mix experienced in FY 2011.

The trading profile for the financial year was characterised by a strong off-trade performance in the spring/ early summer and Christmas trading period. The on-trade enjoyed continued growth of Magners Golden Draught and Magners Pear (now the #1 pear cider in GB) providing some relief against further volume decline for packaged Original, for which the competition for fridge space remains a challenge. Innovation continues with three new flavours being launched under the Magners Specials range in the second half of the year. Operating profits grew by 5.9% to €25.2 million and margins improved by 1.1 ppts to 23.4% reflecting a continued focus on operating cost efficiencies. The Magners brand remains in excellent health and investment levels in marketing were maintained.

Gaymers portfolio: It was a transitional year for the Gaymers business. Volumes and net revenues were down 27.2% and 22.1% respectively as the Group sought to exit unprofitable own-label contracts during the year. Some of the brands within the Gaymers portfolio also suffered volume losses as a direct consequence of category premiumisation.

Despite the volume declines, operating margins improved by 1.8ppts to 6.6% due to the stronger economics behind the remaining volume. Operating profit increased by 7.5% to €4.3 million for the year. The repositioned Gaymers business is now positioned to improve economic returns through better utilisation of assets and an increased focus on the wider cider portfolio.

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