Industry News | October 29, 2002

Allied Domecq Announces Preliminary Results for Year to August 31

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Allied Domecq, parent company of QSR chains Baskin-Robbins, Dunkin' Donuts, and Togo's, announces its preliminary results for the year to 31 August 2002.

HIGHLIGHTS

20022001% growth
Turnover£3,334m£2,879m16
Trading profit£610m£543m12
Profit before tax£480m£453m6
Normalized earnings per share32.6p31.0p5
Basic earnings per share36.8p32.6p13
Dividend13.0p12.1p7
Marketing investment behind Spirits & Wine£443m£330m34
Cash flow from operating activities£760m£423m80

Profits and normalized earnings are stated before goodwill and exceptional items unless otherwise stated. The post tax benefit of the Mexican excise rebate for the year to 31 August 2002 was £138m and has been treated as an exceptional item. 2001 figures are (i) reclassified to provide a comparison for Mexican excise rebate treated as an exceptional item in 2002 and (ii) restated for deferred tax treatment under FRS19.

Allied Domecq’s Chief Executive, Philip Bowman, said: “These results represent a successful outcome to an important year for Allied Domecq. We have maintained our focus on delivering profit growth while adding significantly to our brand portfolio and improving volume performance in key markets. Our marketing capabilities have been strengthened, which has led us to invest heavily in the sustainable future growth of the business and bring us closer to our aim of becoming a truly marketing-led company.

“Seven of our eight core brands are now showing volume growth reflecting our continued commitment to invest strongly behind our core brands. Our US spirits business has benefited from the positive actions taken earlier this year with the business returning to organic profit growth. Importantly, most of our core US brands show good growth trends and are gaining market share. We are also delivering innovation with ready-to-drink products and a new cream liqueur, Tia Lusso. During the year, we enhanced the growth profile of the portfolio through the acquisition of Malibu and added to our premium wine business with Bodegas y Bebidas and Mumm Cuvée Napa. The integration of our acquisitions is going well and our new wine business is performing in line with our plans.

“Our Quick Service Restaurants business has delivered strong growth with improved overall same store sales and an increase in distribution points. Dunkin’ Donuts continues to outperform the US QSR category and Baskin-Robbins has benefited from its brand revitalization.

“The results for the first month of the new financial year have been in line with our expectations. We expect to continue to grow earnings benefiting from the contribution of our recent acquisitions while continuing to invest strongly in the business as we support new campaigns for our core brands and drive our programme of innovation.”

Key Points

Comparative information here and in the Operating and Financial Review is based on constant exchange rates.

-Investment to build sustainable future growth through continued improvement of operational effectiveness, innovation and acquisition.

-Organic profit growth (up 3%) in Spirits & Wine (total up 15%)

  • Organic advertising and promotion up 21% (total up 35%)

    -Profit growth in Quick Service Restaurants – up 11%

  • Strong overall same store sales growth
  • Dunkin’ Donuts up 6% and Baskin-Robbins up 2%

    Operational effectiveness

    -Improving operational effectiveness by:

  • Addressing short term volume challenges
  • Investing in the US supply chain improvement project, at a cost of £19m
  • Boosting the focus on our people

    -Strong progress in enhancing our marketing capabilities:

  • Consumer segmentation study
  • New marketing campaigns for key brands

    -Underlying trading working capital improved by 7% (£110m)

    Innovation

    -Successfully developing consumer-led innovation to drive growth

  • Launch of new ready-to-drink products
  • New cream liqueur – Tia Lusso

    Acquisition

    -Significantly strengthening the brand portfolio through targeted acquisition:

  • Malibu
  • Kuemmerling in Germany
  • Bodegas y Bebidas, Spain’s leading winemaker
  • Mumm Cuvée Napa in California

    -Developed an international premium, branded wine business

    -Integration is on track

    News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.