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Central European Distribution (CEDC)
Q2 2011 Earnings Call
August 04, 2011 8:30 am ET
William Carey - Chairman, Chief Executive Officer and President
James Archbold - Vice President, Director of Investor Relations and Secretary
Christopher Biedermann - Chief Financial Officer, Principal Accounting Officer and Vice President
Brady Martin - Citigroup Inc
Matthew Webb - JP Morgan Chase & Co
Edward Mundy - Nomura Securities Co. Ltd.
Alex Howson - Jefferies & Company, Inc.
Andrzej Knigawka - ING Groep N.V.
Daniel Wakerly - Morgan Stanley
Previous Statements by CEDC
» Central European Distribution's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Central European Distribution's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Central European Distribution CEO Discusses Q3 2010 Results - Earnings Call Transcript
Thank you. I'd like to welcome everyone today to CEDC's Second Quarter 2011 Earnings Conference Call. Joining me this morning are William Carey, our President, CEO, and Chairman; and Chris Biedermann, our Chief Financial Officer.
Please note that the content of this call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 4, 2011. The online replay will be available shortly after the conclusion of this call. You may also view a copy of today's press release and a presentation for today's call on our website.
Please also note that statements made during this call, other than those related to historical information, constitute forward-looking statements within the meaning of the Private Securities Litigation and Reform Act of 1995. Without limiting the foregoing discussions, the forecasts, estimates, targets, schedules, plans, beliefs, expectations and the like are intended to identify forward-looking statements.
These forward-looking statements, which are based on management's current beliefs and assumptions and current information known to management, involve known and unknown risks and uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by forward-looking statements.
Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements are contained in the press release issued today and our Form 10-Q to be filed with the Securities and Exchange Commission. CEDC is under no duty and undertakes no obligation to update any forward-looking statements made in this call.
With that, I'll turn the call over to William Carey, our President and Chief Executive Officer. Bill?
Thank you, Jim. Welcome, everyone, to our Q2 conference call. I'll start off with -- we'll discuss a bit about Poland, Q2 highlights, about launching. We'll start with a formal presentation that was put out a few hours ago. [indiscernible], go over some of the financial information and come back into how we look at the second half guidance, an update for the second half for the year 2011.
First off on Page 3, we touch on the highlights of Poland for the quarter. We had a solid quarter volume growth of 18% compared to quarter 2 of 2010, and that's a double-digit volume growth of all of our channels, which is the domestic vodka, imports and exports. The overall market continues to be subdued with the parts around 5.5%, 6% on negative in the second quarter, very similar to the first quarter. And pretty much, we're expecting the rest of the year to be at a similar trend.
We're seeing continued success of our new launch of Biala that we did in fourth quarter last year, our Zubrowka, which we're seeing our market share in June of 6.4% and that's continued to grow, continue to be very received in the marketplace. At the same time, our market share has remained pretty steady at around 24%. But we anticipate -- with further volume gains for the remainder of the year, we still anticipate that 24% to be pushing up to 25%, 26% towards the end of the year.
We also launched in June a new flavored product that we've been talking about, Jezowka, and the initial sales results are extremely well and we're seeing very positive results in July. So hopefully, we'll see continued solid performance on this brand, which is a very profitable sector and growing sectors of flavored market in Poland, which represents low 20s in terms of overall market share in the vodka market.
Beer pricing has remained fairly consistent with first quarter, certainly higher than last year levels because, really, the increase started last August, September and continued with a further increase beginning of January and since have been rather stable, but of course, on a comparison to date, it has been negative.
We're also seeing that in our client mix improvement, we're seeing that the wholesaler channel, which is our most profitable channel, is continuing to take share in our overall business, which you see -- which we'll see continuing probably for, at least for the next 12 months in terms of a better client mix.
And this has really highlighted the fact that we've done a lot of hard work since before the distribution business in August last year to really enhance our overall route to market by selling our wholesale business, and that's something we work very hard on. And as you know, from an SG&A side, we also doubled the size of sales force last fall to make sure that we can put this route to market in place and really drive a higher top line. And that's exactly what we're seeing so far through the first 6 months of this year.