Mexican dairy company Grupo Lala has recorded 3.9% growth in reported net sales, as it continues to realise its strategy for premiumisation.
Net sales for the first quarter rose from MXN 18.28 billion ($961.7 million) last year to MXN 18.7 billion ($984.5 million) this year, thanks in part to strong performance in a number of key regions. Operating income grew by 1.4% to reach MXN 1.46 billion ($76.6 million).
In Mexico, net sales increased 5.3% on a comparable basis, to MXN 14.15 billion ($744.5 million), mainly driven by an improved mix and price increases implemented in both the final quarter of 2018 and during March 2019. Mexico volumes remained stable, with milk sales offsetting a shortfall in beverage sales in Lala’s most significant market, representing more than three-quarters of total group sales.
In Brazil, first-quarter net sales rose 13% to MXN 3.06 billion, thanks to a combination of price increases – which were executed between the last quarter of the previous year and the first quarter of this year – as well as strong performance in Greek yogurt and cheese, particularly in requeijão cheese.
Brazil now accounts for 16% of group net sales after Lala’s acquisition of Brazilian dairy company Vigor, which completed in late 2017.
The US market reported net sales of MXN 832 million – a 3.3% increase year on year – as well as recording its highest EBITDA since the acquisition of the business three years ago.
Mauricio Leyva, the former Grupo Modelo CEO who took over from Scot Rank last September, said: “Positive advancement towards the priorities we defined to drive Grupo Lala’s virtuous cycle has started to be reflected in our first-quarter 2019 results. We have identified areas of future value creation through our Revenue Growth Management initiative, have been executing on our Premiumization Strategy and launched Lala Mexico’s foodservice business unit, an important growth driver for the future.
“Our team is aligned with our ‘big five’ KPIs to drive shareholder value. While we have much work ahead to realign the company to our new growth strategy, the talent we have in place and the plan we are successfully implementing will continue to achieve our short-term and long-term objectives.”
© FoodBev Media Ltd 2020