© Refresco/Richard Sinon
Refresco has posted mixed full-year financial results following a weak fourth quarter, where the brand’s total sales volumes dropped and Q4 operating profit decreased to €15 million ($18.5 million) from €26 million ($32 million) in Q4 2016.
Refresco claims the 6.5% decline in sales volumes was due to decreased demand in the Benelux, Germany and the UK, while fewer contract manufacturing contracts in the US also affected this figure.
The group’s overall Q4 revenue dropped to €520 million ($641 million) from €529 million ($652 million) in the same period last year, however, the brand’s full-year revenues rose to €2.3 billion ($2.8 billion) from 2016’s €2.1 billion ($2.6 billion) figure.
Overall sales volume throughout the year increased 9.9% to 7.1 billion litres from 6.5 billion, which the brand attributes to the acquisitions of bottle manufacturers Whitlock Packaging and DIS, as well as growth in contract manufacturing.
Despite the increase in sales volumes, full-year full-year operating profit fell to €191 million ($235 million) compared to €217 million ($267 million) in 2016, due to increased operating costs and acquisitions, such as the purchase of Cott’s bottling activities.
Refresco completed the $1.25 billion acquisition of Cott’s bottling business earlier this year, creating one of Europe and North America’s largest bottlers, and the group expects the acquisition to drive growth in the future despite the initial outlay.
Refresco CEO Hans Roelofs said: “2017 was for Refresco strategically very good year and financially challenging. We signed a transformational deal to acquire Cott’s bottling activities, creating the world’s largest independent bottler with leadership positions across Europe and North America.
“As a result, we will grow considerably, gain 4,000 new colleagues, 29 manufacturing sites and fulfil our ambition to operate a market leading bottling platform across two continents. It is a huge step forward, right at the heart of our buy & build strategy.
“A weak summer in almost all markets and continued pressure on retailer brands had an adverse effect on volumes and results. Our results were also influenced by higher than expected costs linked to the start-up of several new Aseptic PET lines across the business.
“This technology is critical to our future because it enables us to meet changing consumer preferences for more innovative recipes and packaging formats.”
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