Royal Unibrew further strengthens its position in the Caribbean
Royal Unibrew further strengthens its position in the Caribbean
July 2, 2007 at 12:00 AM EDT
fond-ru-22-2007-uk.pdf 308.9 KB
• Royal Unibrew A/S acquires controlling interest in St. Vincent Brewery Ltd • St. Vincent Brewery Ltd produces the Royal Unibrew Vitamalt brand on li-cence • Leading market position is achieved in the country within both malt drinks, beer and soft drinks • Enforces Royal Unibrew's position in the area • Enables synergies with previously acquired enterprises in Antigua and Do-minica In accordance with Royal Unibrew's strategic platform MACH II, in which the malt drinks markets in the Caribbean and Africa constitute a focus area, Royal Unibrew A/S has entered into an agreement to acquire 52% of the share capital and votes of St. Vincent Brewery Ltd., af-ter which Royal Unibrew controls some 76% of the shares of the Company. The remaining shares are primarily owned by local investors. The acquisition is a natural extension of the previous acquisition of brewery and soft drinks activities in Antigua and Dominica (cf Announcement RU44/2006 of 13 December 2006). Background to the acquisition The acquisition of the breweries in the Caribbean is an integrated part of the Group's malt drinks strategy, which will strengthen the Group's position in the region and contribute to the overall objectives of the MACH II strategic plan. Locally, the acquisition of St. Vincent Brewery will win Royal Unibrew the leading position in the market thus strengthening the Group's overall position in the region. Furthermore, the ac-cess to new, strong local brands and attractive product portfolios provides an opportunity of increased profitability through the expected synergies within purchasing, production, sales, marketing, distribution and organisation. Accounting issues and expectations for the future The acquisition price of the shares mentioned amounts to USD 9.3 million (DKK 51 million) with a total share value (100%) of USD 17.9 million (DKK 99 million). The Company is largely debt-free. In 2006 the brewery recorded a net revenue of some USD 15 million (DKK 84 million) and a profit before tax of USD 1.9 million (DKK 11 million). It is expected that the company will be included in the consolidated financial statements of Royal Unibrew as of 1 July 2007. In 2007 revenue is expected to be at the 2006 level, whereas earnings are expected to be lower than in 2006, primarily due to integration costs and the introduction of VAT in H1 2007. Within 2008/2009 the activities are expected as a minimum to meet Royal Unibrew's overall target of ROIC and EBIT margins of at least 10% and free cash flow of at least 7% of net revenue.