Constellation Brands, whose portfolio includes the Corona and Modelo beer brands, saw net sales up 6% in the fourth quarter of its financial year, to $1.9 billion (€1.76 billion).
Full year sales, to end February 2020, were $8.34 billion (+3%), with the group's chief executive, Bill Newlands, saying that its Corona brand sold just shy of 150 million cases in the US in the fiscal period.
Profit Performance
The group said that its EBIT for the full year stood at $2.54 billion, a decline of 3%, while fourth-quarter EBIT was down by 2%, to $558 million.
It generated record operating and free cash flow, of almost $2.6 billion and $1.8 billion respectively, during the financial year, and managed to reduce its debt by more than $1.4 billion during the period.
“Fiscal 20 represented another excellent year of strong results marked by milestones which include the achievement of record cash flow results and double-digit operating income growth for our iconic beer business," Newlands commented.
"In addition, our Wine & Spirits Power Brands and new product introductions fuelled growth as our premiumisation strategy for this business continues to gain momentum.”
Divisional Performance
Beer volumes at Constellation Brands were up 6.1% in the full-year and 7.2% in the final quarter of the year, with the group reporting its tenth successive year of beer volume growth, it said.
The Corona brand family was boosted by the launch of Corona Refresca and double-digit growth for Corona Premier, the group said.
Its Wine & Spirits division saw volumes down 8.4% for the year and down 1.4% in the final quarter, however this incorporates the sale of the Black Velvet Canadian Whisky business.
In Wine & Spirits, its 'Power Brand' portfolio, which includes Kim Crawford, Meiomi, and The Prisoner Brand Family, outperformed the market, it said.
The group also reaped benefits from its 'robust innovation pipeline', with a positive response to new launches such as Robert Mondavi Private Selection Buttery Chardonnay, spirit barrel aged wines, The Prisoner Unshackled, and Crafters Union wine in a can, it said.
Looking Ahead
Constellation Brands said that it expects its beer business to post net sales growth of between 7% and 8% this year, despite the impact of the coronavirus, due to positive sales uplift through retail channels.
Its wine and spirits business, however, is expected to see a net sales and operating decline of approximately 30% to 35% respectively, due to the closure of the HoReCa channel.
Commenting on the coming financial year in an analyst call, Newlands said, "Our path to these impressive results was paved with great execution and consumer obsession in growing our core business supported by investments to enhance our portfolio and our operations.
"We are now facing an increasingly challenging operating environment and rapidly changing market conditions."
Newlands said that the business is "not providing formal guidance" for the year, adding, "However, we provided the targets that are included in our original fiscal ‘21 plan, prior to the COVID-19 crisis. My goal in doing this is to reiterate that our strategy remains unchanged and to provide the confidence we have in the growth prospects for our core business, as I continue to feel very optimistic about our long-term opportunities."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
