The International segment (renamed from Malt Beverages and Exports) comprises the export and license business to international markets outside Denmark, Finland, Italy, France and the Baltic countries. Sales outside Italy, the Balkan countries and France from the businesses Terme di Crodo and Lorina are included in the segment. International accounted for 8% of the Group’s net revenue and for 9% of allocated EBIT for 2018 (2017: 8% and 10%, respectively).
- Net revenue supported by brands from new acquisitions
- Focus on strengthening presence in core markets
- Net revenue and earnings negatively affected by exchange rate development
- Continued high EBIT margin
Development in 2018
Volumes for 2018 showed a 17% increase and net revenue increased by 22%. The positive development is partly due to Terme di Crodo being new in this segment as well as products from the Lorina portfolio. Furthermore, the revenue increase was supported by growth in North America as well as Africa, whereas, the sugar tax and the Brexit process caused headwind for the UK organisation. Exchange rate developments affected net revenue negatively by approx DKK 13 million in 2018. Net revenue per volume unit was unchanged compared to 2017.
Sales in the segment are characterised by large volumes being exported to distributors at a time, meaning that inventory changes should be taken into account when comparing periods. It is estimated that distributors’ organic sales to customers increased by a high single-digit percentage in 2018. Distributors’ sales to consumers correspond to Royal Unibrew’s deliveries for the year as a whole, but with market differences. The shortage of ”hard currency” continues to present a challenge, especially in the African continent.
Earnings before interest and tax (EBIT) for 2018 amounted to DKK 127 million, which is DKK 21 million above the 2017 figure. Exchange rate developments affected EBIT negatively by approx DKK 9 million. The EBIT margin for 2018 was 21.9%, and adjusted for the negative exchange rate effect, the margin was 22.9% compared to 22.2% for 2017.
|Q1-Q4||Q1-Q4||% changes||Q4||Q4||% changes|
|Volume (thousand hectoliters)||828||706||17||200||166||20|
|Net revenue (mDKK))||582||479||22||150||114||32|
|EBIT margin (%)||21.9||22.2||19.5||22.8|
The business area International comprises the export and license business to international markets outside Denmark, Finland, Italy, France and the Baltic countries. From 2018, sales outside Italy, the Balkan countries and France from the newly acquired businesses Terme di Crodo and Lorina have been included in the segment. The business is relating to non-alcoholic malt beverages, beer under the Faxe brand as well as the new soft drink products from Lorina and Terme di Crodo.
The key market areas for our malt beverages and Faxe exports are countries in the Americas and Africa as well as, in the case of malt beverages, among ethnic groups from these areas living in and around major cities in Europe and the US. We have several internationally strong dark malt beverage brands, which are sold in the premium segment. Vitamalt is assessed to be the malt brand with the broadest global distribution, whereas Supermalt and Powermalt hold strong regional positions.
The key market areas for the soft drinks from Terme de Crodo and the Lorina craft lemonade are Central Europe and the Americas.
The International markets are primarily supplied by exports from our Danish breweries, but also in certain cases on the basis of license agreements with local breweries, whereas, Terme di Crodo and Lorina products are delivered from the factories in Italy and France.
The sales organisation, which to a large extent is located in the individual markets, cooperates closely with our distribution partners on commercial priorities and marketing initiatives.