VISION - Global Food Industry and Business News · Dr. Peter Nagel Supply Chain * Eckes-Granini...

| VISION |

Eckes-Gran

ini G

rou

p A

NN

UA

L REPO

RT 2006

| Brand quality that bears fruit | ANNUAL REPORT 2006

Leading European fruit juice and fruit beverage

company, based on strong Number 1 / Number 2

brands, with an excellent reputation for

successful innovations.

Profitable and sustainable growth, via organic

growth and acquisitions, mainly in Europe.

With a motivated and competent team in a very

attractive company characterized by an open

and entrepreneurial culture.










Eckes & Stock Group

| Corporate Boards |

Advisory Board of Eckes-Granini GmbH & Co. KG (until November 30, 2006)

Peter Thiel Chairman

Hermann Arnold Deputy Chairman

Dr. Ottokarl Finsterwalder

Volker Stühmeier

Board of Supervisors of Eckes AG


Stefan Kobold Deputy Chairman

Dr. Karl Brings

Dr. Hans Falk-Bjerke

Axel Hamm

Bernard Huber

Management Board of the Eckes-Granini Group GmbH*

Thomas Hinderer Chairman

Sidney Coffeng Marketing, R&D, Export and PR

Heribert Gathof General Manager Eckes-Granini Germany

Albert Grätz Finance, Controlling, M&A

Sabine Holtkamp Human Resources, Organizational Development

Sylvain Jungfer General Manager Eckes-Granini France

Dr. Peter Nagel Supply Chain

* Eckes-Granini GmbH & Co. KG was formally reconstituted as the Eckes-Granini Group GmbH effective January 30, 2007.

All key figures for business year 2006 cited in the Annual Report relate to Eckes-Granini GmbH & Co. KG.

National organizations National organizations

Eckes AG

Eckes-Granini Group

Eckes-Granini Deutschland GmbH Nieder-Olm / Germany

Oy Marli AB Turku / Finland

Eckes-Granini France SNC Sarre-Union / France

Eckes-Granini Austria GmbH Kröllendorf / Austria

OOO Eckes-Granini Rus Moscow / Russia

Eckes-Granini Ibérica S. A. Barcelona / Spain 51 %

Eckes-Granini Suisse S. A. Henniez / Switzerland 51 %

SIÓ-Eckes Kft. Siófok / Hungary

Eckes-Granini Romania S.R.L. Bucharest / Romania

UAB Elmenhorster Vilnius Vilnius / Lithuania

100 % interest unless otherwise indicated.

| Key figures |

| National organizations |

2005 2006 Diff.

Volume sales in million litres 896 1,067 +19.2 %

– of which fruit beverages (core business) 896 978 +9.1 %

Net turnover in million EUR 718 818 +13.9 %


Earnings before interest and taxes (Ebit) in million EUR 43.6 37.0 -15.2 %

Employees* 1,487 1,457

* Full-time equivalent

Publisher

Eckes-Granini Group GmbH*

| * Eckes-Granini GmbH & Co. KG was formally reconstituted as the

Eckes-Granini Group GmbH effective January 30, 2007.

All key figures for business year 2006 cited in the Annual Report

relate to Eckes-Granini GmbH & Co. KG.

Main Office

Ludwig-Eckes-Allee 6

55268 Nieder-Olm, Germany

Telephone: +49 (0) 61 36 / 35 05

Telefax: +49 (0) 61 36 / 35 10 81

E-mail: [email protected]

Contact

Engel & Zimmermann AG,

Agentur für Wirtschaftskommunikation, Gauting

Telephone: +49 (0) 89 / 89 35 63-3

Telefax: +49 (0) 89 / 89 39 84 29


Concept



Design und Realisation

Welcome Marketing GmbH, Schondorf am Ammersee

Photo Credits

Eckes-Granini Archive

Jan Greune, Münsing

Karl Newedel

Getty Images

This Annual Report is also available in German.

Dieser Geschäftsbericht ist ebenfalls in deutsch erhältlich.

.

| Publishing Data |

21. Foreword

195. Brand Philosophy

73. Business Year 2006

24

26

27

28

30

32

33

34

35

36

37

Overview

Finland

Lithuania & Baltic Region

France

Germany

Austria

Hungary

Romania

Russia

Spain

Switzerland

40 8. Internet, Publishing Data

246. Our Countries

38

7. Key Business Figures,

Commentary

52. Corporate Portrait

154. Leadership for Success

An Interview with Thomas Hinderer

| Contents |

Rising raw material prices and moderate growth in

overall consumption, marked by declines in some

segments, had a significant impact on the European

fruit juice market in 2006. In view of this situation,

we are particularly proud to note that the Eckes-

Granini Group succeeded in setting itself apart from

the general market trend and recording a “juicy

plus”. We ended the past business year with double-

digit gains in both turnover and volume sales while

strengthening our position as a leading European

producer of branded fruit beverages once again.

Eckes-Granini is an intact, financially sound company

that is now moving dynamically toward the billion-

euro mark in turnover from sales of strong inter-

national and local brands. Despite a difficult market

environment, we have increased investments in our

brands substantially in order to strengthen them on

a sustained basis over the long term. We provided

impetus to growth by introducing new products and

entering new market segments once again in 2006.

In addition to strong organic growth powered by our

strategic brands, we also continued to pursue our

policy of European expansion with the acquisition of

Elmenhorster in Lithuania and the establishment of an

Eckes-Granini subsidiary in Romania.

As the financial holding company of the Eckes-Granini

Group, the Eckes AG took several far-reaching deci-

sions during the past year – decisions that will guide

and shape our course toward the future. Following

the sale of the German spirits division, the company

will now focus more rigorously on the non-alcoholic

beverage business. Following the acquisition of the

outstanding 26 % interest in Eckes-Granini held by

Melitta until November 2006, the Eckes-Granini Group

| Eckes-Granini: a juicy plus |

2 Foreword

From left to right: Heribert Gathof, Albert Grätz, Sidney Coffeng, Thomas Hinderer, Sylvain Jungfer, Sabine Holtkamp, Dr. Peter Nagel

3Foreword

now has full control and decision-making authority in

all business matters. These decisions represent both

an affirmation and an obligation for us. We intend to

take advantage of the resulting freedom and the op-

portunities it offers to strengthen our market position

substantially through internal and external growth.

Moving ahead towards realization of our Vision 2010,

we established a solid foundation for success during

the past business year, to which our employees

contributed significantly with their commitment

and hard work. We wish to thank each and every

member of our staff for their achievements in 2006.

As we face the tasks and challenges of the future, we

know that we can rely on a strong, highly motivated

Eckes-Granini team that contributes a wealth of skills

and knowledge within the context of multinational

cooperation and thus forms the basis for sustained

business success.

Management Board

Eckes-Granini Group

As a major beverage producer and a brand supplier

with a strong tradition, the Eckes-Granini Group,

based in Nieder-Olm near Mainz (Rhineland-Palati-

nate), holds a leading position in the European fruit

beverage market.

The foundation for international success was laid

in the early 1990s as the borders to Eastern Europe

opened. The company, which has operated under the

name Eckes-Granini Group GmbH (formerly Eckes-

Granini GmbH & Co. KG) since January 30, 2007, is

represented by national organizations in ten European

countries. With its own management and supervisory

boards, Eckes-Granini is a fully independent inter-

national corporate group within the Eckes AG and

currently employs 1,500 people. “Growing closer and

growing together” is the motto of the international

team. The potentials and synergy effects needed to

achieve that goal are developed through consistent

expansion of an efficient corporate network.

5Corporate Portrait

Strong brands:

international stars and local heroes

Enjoyment and good health, innovation and tradition –

these are the ideas to which the staff of Eckes-Granini

has devoted itself from the outset. The Eckes-Granini

Group has established a broad European presence in

both the retail food trade and the out-of-home sector

with the internationally renowned granini and hohes C

brands as well as such strong national labels as Joker,

Réa, SIÓ and Marli. Superior quality is the top priority

in the Eckes-Granini Group, from carefully selected

fruits and raw materials via the gentle production

process to the finished product. The company’s entre-

preneurial orientation and self-image as a brand pro-

ducer are the cornerstones of this quality philosophy.

Consumers in more than 70 countries have come

to appreciate the juices, fruity thirst-quenchers and

refreshing beverages produced by the Eckes-Granini

Group. The factors that have contributed most to the

success of Eckes-Granini brands are unique position-

ing, sustained advertising support and outstanding

product quality.

| Leading European producer

of branded fruit beverages |

7Business Year 2006

| On course for success again in 2006 |

The market: moderate growth in Europe

The European fruit beverage market showed mode-

rate growth in 2006. Excluding the Russian market,

which recorded double-digit volume growth rates,

the overall market suffered slight volume sales losses.

While a number of Western European markets were

stagnant or experienced declining sales, the markets

of Eastern Europe showed strong growth.

The market for fruit beverages (data from seven core

countries, retail food trade) declined slightly, with vol-

umes down 1.5 %. The positive trends in the French,

Spanish and Hungarian markets were opposed by

slumping volume sales in the important German mar-

ket as well as in Austria and Finland. The Swiss market

remained stable at the level of the preceding year.

Market developments in 2006 were also influenced

by substantial increases in raw material prices.

In the highly competitive European market, “A”

brands and trade labels made further gains at the

expense of “B” brands. A close look at the trade

landscape reveals that discounters continued to

strengthen their foothold in Europe.

Double-digit growth for Eckes-Granini

In spite of a difficult market environment and declining

sales in certain areas, 2006 was an extraordinarily

positive business year for the Eckes-Granini Group. Net

turnover from sales in the core fruit beverage business

rose markedly by 11.7 % to EUR 802 million (2005:

EUR 718 million). Including sales of water in Hungary,

net turnover for 2006 came to a total of roughly EUR

818 million*. This enabled the Group to improve its po-

sition as a leading European producer of branded fruit

beverages with a value-based market share of 13.7 %

(data from seven core countries, retail food trade).

With volume sales of 978 million litres of fruit bever-

ages, the company raised its rate of growth in its core

business field by 9 % (2005: 896 million litres).

If the 90 million litres of bottled water sold under the

cooperative distribution agreement with Szentkirályi

Water (Hungary) are included, total volume comes to

1,067 million litres* – surpassing the one-billion-litre

mark for the first time.

Nearly all national organizations succeeded in in-

creasing volume sales as compared to 2005.

The largest contributors to volume growth were

Germany (+12.4 %) and Russia (+65.7 %).

| * Since revenues from cooperative water distribution operations

in Hungary were not included in the balance sheet until 2006,

no direct reference figures are available for 2005.

January 1. Two strong French

brands begin anniversary years:

Joker celebrates its 70th birth-

day, Réa its 50th.

February 1. In a logical step

in keeping with the new

management philosophy

and corporate structure, the

Management Board of the

Eckes-Granini Group is ex-

panded to include the general

managers of the two most

important national organiza-

tions, Germany and France.

Strategic brands continue to drive growth

International and local strategic brands* marketed

by the Eckes-Granini Group in both the retail food

trade and the out-of-home sector continued to drive

growth in 2006. The two international brands – granini

(+33 million litres) and hohes C (+19 million litres) –

were the largest contributors to total volume growth of

82 million litres (core business fruit beverages). Among

the strongest-growing local brands during the past

business year were Uslada in Russia (+18 million litres)

and Marli in Finland (+7 million litres).

| * The group of strategic brands includes the two international

brands granini and hohes C as well as the strong local brands

FruchtTiger (Germany and Austria), Réa and Joker (France), Marli

(Finland and Estonia), Mehukatti (Finland), SIÓ (Hungary), Uslada

(Russia), Elmenhorster (Lithuania) and YO Syrup (Austria).

8 Business Year 2006

April 20. The new PET bott-

ling line in Bröl is commis-

sioned, thus doubling bottling

capacities for this strategically

important packaging unit

in Germany.

May 1. SIÓ-Eckes (Hungary)

acquires exclusive distribution

rights for Szentkirályi water –

a promising alliance of two

Hungarian market leaders.

May 10. The third European

Convention held since 2001

is attended by 160 employees

from all national organizations.

The three-day event was de-

voted primarily to introducing

the Group’s new strategy and

management philosophy.

| Important Events in 2006 |

9Business Year 2006

Since June. Group-wide

implementation of new pro-

cesses and modified structures

designed to enhance effi-

ciency and innovative drive,

optimize costs and strengthen

international cooperation and

networking among national

organizations.

June 1. The Eckes-Granini

Group acquires the Lithuanian

market leader UAB Elmen-

horster – thereby significantly

strengthening its market

position in the Baltic region.

June 8. An important

growth market in Europe:

The newly founded subsidiary

Eckes-Granini Romania begins

marketing granini in Romania

in cooperation with Carlsrom

Beverage Co.

November 7. Following the

sale of the German spirits divi-

sion, Eckes AG strengthened

its focus on the fruit beverage

business represented by the

Eckes-Granini Group.

November 14. Production is

launched on the new PET line

in Mâcon (France).

November 30. Eckes pur-

chases shares of Eckes-Granini

GmbH & Co. KG held by

Melitta (26% interest) since

the buyout of granini in 1994,

thus giving the Eckes-Granini

Group full control and

decision-making authority

in all business matters.

More funds for advertising despite

increased costs

With earnings before interest and taxes (EbIT) of EUR

37 million, the company achieved a gratifying result,

which nevertheless remained as expected below the

record earnings of 2005 (EUR 43.6 million)

(see graphic page 10).

One of the primary reasons for the decline in earnings

from the level of the preceding year was the signifi-

cant rise in prices for raw materials in general and

especially for orange juice concentrate, which could

not be passed on to the market in full.

Despite this difficult market environment, the Eckes-

Granini Group stepped up its marketing activities once

again during the past business year. With an eye to

strengthening the company’s brands in the long term

and achieving sustained earnings growth, investments

in brands were increased significantly in 2006. This

was reflected above all in markedly higher (+15 %)

investments in consumer communication, including TV

advertising in particular. The launches of hohes C Red

Multivitamin in Germany, Austria and Hungary were

effectively supported with TV commercials and flank-

ing measures, to cite only one example.

The extraordinary income reflected in the earnings

figure for 2005 could not be matched in 2006.

One-time extraordinary expenditures for restructuring

measures, among other things, impacted on earnings

in 2006.

Taking this into consideration, earnings from ordinary

business operation in 2006 remained comparable to

those of the preceding year.


Further progress in Europeanization

The European expansion process continued with the ad-

dition of two new companies in Lithuania and Romania.

The acquisition of UAB Elmenhorster, the market leader

in Lithuania, enables Eckes-Granini to strengthen its

position in the Baltic region substantially.

In Romania, an important growth market in Eastern

Europe, the newly founded subsidiary Eckes-Granini

Romania commenced marketing operations for granini

in cooperation with Carlsrom Beverage Co..

With these additions, the number of national organi-

zations in the Eckes-Granini Group rose to 10.

The strategic partnership with Fructa Napoje in Poland

was expanded. In May 2006, Fructa Napoje assumed

responsibility for production and distribution of the

Clippo brand in Poland.

New products enliven the market

Eckes-Granini provided significant impulses for growth

with numerous innovations once again during the past

business year.

Earnings before interest and taxes

(EblT) in million EUR

2001 2002 2003 2004

23.7

25.6

37.4

35.8

2005

43.6

2006

37.0

Investments in

consumer communication

2005 2006

+15 %

11Business Year 2006

The hohes C line was extended through the successful

launch of Red Multivitamin in several countries.

The Eckes-Granini Group expanded its leading role

as a supplier of fruit beverages in modern PET bottles.

Following the conversion of numerous brands from

glass to PET in multiple national markets in 2005,

the Joker brand was relaunched in the convenient

PET bottle in late 2006. PET activities were initiated

in Spain with the introduction of granini in large

1.5-litre PET bottles, and the PET business of granini

was extended in Germany.

With the launches of FruchtTiger Sport (Germany),

FruchtTiger Cubito (Germany), the new, attractive

0.2-litre single-portion carton with twist-off cap and

straw, a new variety of SIÓ Vitatigris (Hungary), Mehu-

katti ready-to-drink (Finland) and Réa Réveil Douceur

(France), Eckes-Granini continued to strengthen its

position in the market for children’s beverages.

PET: Strategic expansion of production capacities

The Group’s dual production strategy – a combination

of in-house production and co-packing by strategic

external partners – proved highly effective once again

in 2006. The efficient supply-chain network enabled

Eckes-Granini to ensure timely delivery, superior pro-

duct quality and cost-efficiency.

The integration of UAB Elmenhorster (Lithuania),

significant volume sales growth and changing market

requirements posed new challenges with respect to

production processes and procedures. In addition to

several new carton-packaging lines, cold-aseptic PET

bottling lines were commissioned in Bröl (Germany)

and Mâcon (France) in order to increase capacities in

response to rising demand. Eckes-Granini also under-

scored its role as the technology leader in the industry

with the installation of a Plasmax plastic bottle barrier

coating system in Henniez (Switzerland).

Evolution in management

“Creating a vital culture of leadership and entrepre-

neurial spirit by empowering people and organiza-

tion”: The adoption of this clear credo by our manag-

ers in Vision 2010 was but one of the major highlights

of the year 2006.

Other frequently cited highlights included the Euro-

pean Convention and changes in corporate structures

and processes.

The new management style not only emphasizes pro-

fessional qualities but also focuses on entrepreneurial

spirit and social skills. Business and human relations,

finance and the interpersonal sphere – the one side

will no longer exist without the other in future. The

Convention slogan “We do it together” means not

only “what” we do but above all “how” we do it.

Sensitivity to others, a constructive approach to

conflicts, the ability to listen to different views and a

culture of feedback are the qualities needed in order

to achieve outstanding results. The objective is to

develop a basis of teamwork and cooperation that

promotes motivation, trust and progress. A close-

knit international network, reduced complexity and

enhanced efficiency, as well as a stronger focus on

the future business needs, will be required to meet

the challenges of the future.

In this context, change processes were facilitated,

existing programmes and systems adapted wherever

necessary and new tools, such as Leadership Feed-

back and an organizational analysis, introduced as

we made further progress on our way to becoming

a learning organization.

| Outlook: developing new growth segments |


Analysts anticipate stagnating fruit beverage markets

in the core countries served by the Eckes-Granini

Group – with the exception of Russia – in 2007.

Conditions affecting business are expected to remain

difficult, due in large measure to rising raw material

prices. Thus further price adjustments are likely in

the fruit beverage market.

The Eckes-Granini Group expects to achieve moderate

growth in fruit beverage business in 2007. Further

increases in brand investments will contribute to en-

suring sustained, long-term gains in company value.

Another focus for Eckes-Granini in 2007 is the

development of additional potentials in the growing

“thirst-quencher / refreshment” and “chilled juice”

segments.

In the thirst-quencher / refreshment segment, the

Group has now supplemented the successfully estab-

lished Marli Juissi, granini Frucht Prickler and granini

Fruchtig-Frisch brands with a new trend concept –

hohes C Naturelle. This thirst-quenching combination

of natural, non-carbonated mineral water and pure

fruit juice responds to the trend in favour of “natural,

refreshing beverages”.

13Business Year 2006

97 98 99 00 01 02 03 04 05 06

Turnover 1997 – 2006 in million EUR*

1.000

900

800

700

600

500

400

300

200

100

97 98 99 00 01 02 03 04 05 06

| *Base: core business (fruit beverages)

Volume sales 1997 – 2006 in million litres*

1.000

900

800

700

600

500

400

300

200

100


Eckes-Granini meets the rising demand for fresh,

chilled fruit juices with products developed specifically

for the chilled products section. The company took

its first steps into this growing segment in mid-2006

with the launch of Joker Vital and Joker Vital 5 in the

French market. Fresh, chilled juices from Eckes-Granini

will be introduced in several European countries under

the concept granini Sun Fresh in 2007.

The partnership with Gutta in Russia established

several years ago was placed on a firm footing for the

medium term in 2007. Gutta and Eckes-Granini Rus

have agreed to cooperate closely in production and

sales, thereby enabling both companies to tap the

strong growth potential even more effectively

in the years to come.

In addition to promoting organic growth, plans call

for entry into new growth markets through acquisi-

tions and strategic alliances.

14 Interview

| Leadership for Success |AN INTERVIEW WITH THOMAS HINDERER

Mr. Hinderer, 2006 was another banner year for

the Eckes-Granini Group. Does that mean that

the bar is set even higher for the coming years?

Thomas Hinderer: The Management Board has de-

scribed quite clearly where we intend to be in three

years. Our primary goal is to increase company value

significantly and on a sustained basis. Expressed in

quantitative terms, we want the value of the Eckes-

Granini Group to be 50 percent higher in 2010 than

in 2005 – which means that we must find ways to

increase profits with the same structures and under

comparable raw material and currency conditions.

What pleases me most is that we have articulated

these ambitious goals and strategies together within

the management team. This underscores the impor-

tance of the decision taken in 2006 to include the

general managers from Germany and France – the

two largest national organizations, which together

account for 60 percent of total revenue and earn-

ings – in the Management Board of the Eckes-Grani-

ni Group, where they are now fully integrated and

involved in the Board’s most important decisions.

15Leadership for Success

A NEW TEAM CULTURE AT ECKES-GRANINI:

“COOPERATION WITHIN THE NETWORK AND SHARED RESPONSIBILITY.”

And you expect this team spirit to spread

throughout the entire company?

Thomas Hinderer: That is our idea of modern leader-

ship and modern management: emphasizing the

achievements of the group rather than the individual.

The pillars of our new team culture are cooperation

with the network and shared responsibility. The whole

organization is more than the sum of its parts – our

excellent employees. We have established a broad

basis for communication and dialogue in order to

ensure that every employee at Eckes-Granini truly has

the opportunity to contribute to enhancing the value

of our company. With the General Managers’ Meet-

ings, the European Management Convention, frequent

meetings involving all departments and work in inter-

departmental, international groups, we have estab-

lished important platforms from which to promote and

intensify dialogue beyond all national and departmen-

tal boundaries and at all levels of the company.

In order to make the best possible use of the extensive

skills and know-how in our group, we need intelligent

networks and an open, transparent culture in which

16 Leadership for Success

leadership can be relied upon and in which people

are willing to assume responsibility because it is in their

own interest to do so. Of course you can’t create such

a culture by directive – like flipping a switch. Build-

ing a common culture of change in which change is

viewed as opportunity is a process that takes time and

patience, a process that thrives on dialogue and dis-

cussion devoted to achieving consensus. Courage and

entrepreneurial thinking and action are values

that are expressly desired and fostered.

You emphasize transparency.

How important is transparency in your view?

Thomas Hinderer: Transparency is an important

part of our new leadership philosophy. I believe that

knowledge and transparency form the foundation for

management and leadership, the basis for open feed-

back and thus for mutual trust as well. Furthermore,

I am convinced that you can’t manage effectively

what you don’t measure. And that is why we have

implemented a new, transparent reporting system

that ensures comparability among all national

organizations.

We firmly believe that good leadership is the basis

for successful corporate growth. With this in mind,

we have defined a number of management com-

petencies that we view as prerequisites for effective

corporate management. These management compe-

tencies serve as a basis for feedback and continuous

improvement of our managers as we gradually evolve

into a learning organization. This is clear evidence

that we do practice what we preach, or “walk the

talk”, as people often say.

I am confident that we will achieve our ambitious

goal because I have seldom witnessed the kind of

motivation and commitment we recognize in people

at Eckes-Granini. That is truly in a class of its own.

One of those ambitious goals is to increase

company value. How is that goal to be achieved?

Thomas Hinderer: An increase in company

value comes primarily from continuous earnings

growth and secondly from what we invest in our

brands. What counts is not short-term success but

rather sustained growth. Thus it is essential that we

have healthy, well-known, profitable brands, that we

invest enough in our brands, that we lead rather than

follow when it comes to innovation and, of course,

that we have a strong balance sheet and profit and

loss structure coupled with a competitive cost

structure. Expressed in simple terms, our corporate

strategy concentrates on six focus areas: net prices,

innovation, fixed costs, complexity, purchasing and

people management. We must and will continue

to do our homework in these areas.

What direction do you expect new product

developments to take?

Thomas Hinderer: Trends such as health and con-

venience as well as aspects of quality and pleasure will

continue to play a very important role. The important

thing is to introduce only products that come from our

brands and strengthen our brands. It makes no sense

to innovate just for the sake of innovation. Instead,

we aim to take advantage of the strengths of granini,

hohes C, Joker, Réa, SIÓ and Marli and to develop

them intelligently in order to attract new consumers

for our brands. This will involve placing new products

like granini Sun Fresh in refrigerated sections or bene-

fiting from the strong potential of the thirst-quencher

and refreshment segments with hohes C Naturelle and

granini Frucht Prickler. The point is to pursue a sound,

efficient brand policy.

Are discounters going to spoil your plans?

Thomas Hinderer: The fact is that private labels,

trade brands, low-priced and discounter products,

etcetera, account for 60 percent of our markets. This

may be frightening to some people. But I see it as a

challenge and an opportunity. Our advantages are our

strong brands and our good brand policy, which is in

tune with the times and generates innovations. With

good products and intelligent concepts supported by

17Leadership for Success

the right kind of communication we have created an

excellent basis for differentiation. It is important for us

to apply effective concepts to other countries and to

take advantage of synergies. We operate internation-

ally, and thus it is essential to establish new products

not only in one but in several different countries. This

is precisely where our strength and our greatest po-

tential lie in competition with low-priced products.

The organization has achieved dynamic external

growth through acquisitions in the past.

Thomas Hinderer: And we will continue to do so in

future, but we want to ensure that we grow in our

existing markets as well, as in 2006, when nearly all

growth was organic. We are especially proud of that.

Our strategy calls for sustained internal and external

growth. In keeping with the Eckes-Granini philosophy,

we seek to acquire brands that fit with our portfolio,

established brands that already hold at least the

number 2 and preferably the number 1 position in

their respective countries. And the companies we ac-

quire must be integrated intelligently into our network.

As a leading European fruit juice and fruit bever-

ages producer, we are in constant contact with a

number of companies throughout Europe within the

framework of our expansion strategy as we explore

potential opportunities for cooperation.

| Eckes-Granini:

A passion for strong brands |

19Brand Philosophy

Dressing up nicely to visit the neighbours instead of

playing? Little Max has painted red spots on his face

with Mama’s lipstick. “I don’t think I can go with you”,

he says with mock sadness. His mother winks and

suggests that he’d better stay in his tree house and

recover instead. She gives him a bottle of hohes C Red

Multivitamin. And there in his tree house with Teddy,

Max really does feel much better!

As this short clip from the TV commercial “Get well

soon” broadcast in support of the market launch

of hohes C Red Multivitamin in 2006 clearly shows,

brands are more than just products. They appeal to

Strategic brands 84 %

824 million l

Local brands 36 %

355 million l

hohes C 24 %

230 million l

granini 24 %

239 million l

total 978 million l


Volume shares by brand in 2006 (figures rounded)*

the head and the heart at once. The quality of a

product must be beyond doubt, but brands also have

the power to trigger emotions. The story of Max and

his mother speaks of happiness, loving care, and

harmonious, intact relationships. Viewers sense that

hohes C and the family simply belong together.

Brands as success factors

Brands are personalities with their own unique iden-

tities. They are points of reference and sources of trust.

People buy brands because they associate them with

childhood memories, longings and dreams, and often

even a whole attitude toward life. Strong brands with

Other brands 16 %

154 million l

20 Brand Philosophy

prominent profiles are one of Eckes-Granini’s competi-

tive advantages. They are key factors in the company’s

success. The Group believes in its brands and relies

on them. They are the basis for sustained growth in

company value.

Eckes-Granini: a perfectly tuned brand portfolio

The success story of Eckes-Granini brands is closely re-

lated to a brand portfolio that is perfectly tuned to the

market and the needs of consumers. The combination

of international brands such as granini and hohes C

with so-called “local heroes” (Marli, Mehukatti, Joker,

Réa, SIÓ, YO Syrup, Uslada, FruchtTiger and Elmen-

horster) has made the company so successful.

This dual brand strategy, a mix of international and

local brands, is carefully designed to ensure that none

of the individual brands competes with the others.

Brands are clearly and distinctively positioned and

combined in keeping with the relevant dimensions

of the fruit beverage market – health (e.g. hohes C,

Joker) and pleasure / enjoyment of life (e.g. granini,

SIÓ). In this way, different consumer needs are fulfilled

precisely and in accordance with the dictates of the

market. The regional roots of our “local heroes” in

their home countries often play an important role in

brand identification and brand image.

The pillars of the Eckes-Granini brand philosophy

The positioning of our brands are as diverse as the

brands themselves. Yet what they all have in com-

mon is the consistent and brand-typical realization

of their respective positions in all elements of the

marketing mix and the sustained support provided

to all of our brands:

Superior product qualities respond to the specific

positions of given brands and the specific require-

ments of the respective segments. We regard

quality as a self-evident objective, in all sectors and

business fields, and especially in excellent practical

application.

Unique, typical brand features ranging from

packaging design to advertising to drinking

glasses. A brand like granini, for example,

is regarded in over 70 countries as the

very symbol of pleasure and enjoyment of

life. This premium brand is available internationally

through all sales channels – in supermarkets as well

as in top restaurants and exclusive hotels. The ty-

pical brand presentation in the famous dimple design

guarantees that consumers would always recognize

the bottle – and thus the product – even if they were

blindfolded. In the 0.2- or 1.0-litre bottle or served in

a glass in a restaurant – the dimples give granini its

unparalleled recognition factor.

The creation of brand worlds with which consumers

are happy to identify and which give brands their

unique character. SIÓ is an excellent example. The

success story of our Hungarian brand began in 1977.

The key to success? Strong local roots. SIÓ is the

brand Hungarians see as “their own” and with which

they identify closely.

Our brand philosophy relies on sustained, long-term

investments in our brands and the knowledge that

temporary, short-term success is not the only thing

that counts. In spite of difficult market conditions,

investments by the Eckes-Granini Group in consumer

communication rose by 15 % in 2006.

Maintaining the balance between continuity and

staying in tune with the times:

Continuity is essential to the success of a brand, but

it must be combined with a keen eye for changes

in consumer needs and sensitivity in the imple-

mentation of innovations. Successful, long-term,

strategically sound brand management begins with

the customer and is consistently pursued with the

consumer’s needs in mind.

This brand philosophy requires a certain degree of

closeness to consumers and an awareness of their

wishes and needs. For Eckes-Granini, that means

staying in tune with the times without sacrificing a

23Brand Philosophy

measure of brand continuity. The TV commercial for

hohes C Red Multivitamin is a good example.

The hohes C brand traditionally stands for family

and loving care. Yet the image of the family has

changed, as have approaches to child-raising as well.

There is more room for understanding in the modern

mother–child relationship. The mother goes along

with the child’s game and allows him a certain

amount of independence. Loving care also plays an

important role for modern mothers. With hohes C

Red Multivitamin, the mother fulfils her obligations as

a caring, protecting parent, while hohes C retains its

position as a healthy vitamin supplier for the whole

family. This is a mixture with which hohes C has held

its leading position in the market for non-alcoholic

fruit beverages for over 50 years.

TV advertising conveys brand messages

The TV commercial for hohes C Red Multivitamin

required a year to develop – from the initial idea to

the first shooting session. Every detail counts and

helps ensure that consumers recognize themselves in

the short episode and can identify with the characters.

Success has proven that Eckes-Granini chose the right

course. Within one year, hohes C Red Multivitamin

advanced to the position of the third strongest product

in the hohes C range, measured in terms of customer

reach. Surveys clearly indicate that the TV commercial

contributed to an outstanding level of product recog-

nition and conveyed the important brand messages

according to plan.

Setting a trend with PET

Brands need to be communicated through advertising,

yet daily contact between millions of consumers and

the product and its packaging also plays a crucial role

in brand communication. Shapes and designs, such as

the brown hohes C bottle, the typical granini dimples

or the rectangular Joker bottle, help brands stand

out on store shelves and make them recognizable at

a single glance. But brands must not ignore the spirit

of the times in their external appearance. They must

remain vitally alive. Eckes-Granini has consistently suc-

ceeded in maintaining the balance between preserva-

tion and change. Thus, for example, Eckes-Granini

has affirmed its role as a trend-setter in Europe with

the introduction of the convenient PET bottle for fruit

beverages – a strategy that consumers have rewarded

and one that has also boosted growth substantially.

The brand philosophy runs like a continuous thread

through all marketing measures and is also reflected

in the consistent, brand-conforming implementa-

tion of POS activities and promotions. A strong sales

organization ensures that the company’s products are

present everywhere and in just the right quantities –

from the wholesale food and beverage trade to restau-

rants and hotels to petrol station shops and kiosks.

Moving towards the future with

continuity and innovation

The examples cited above clearly show that all brands

marketed by the Eckes-Granini Group have their own

unique histories and their own unmistakable faces.

Despite the diversity of our brands, the basic pre-

requisite for success are the same for all:

A keen sense of consumers’ needs coupled with

precise, systematic market research as a basis for our

brand policy. A good balance of quality and innov-

ation, of new impulses, of staying in tune with the

times and preservation and strengthening of the brand

core is the foundation for the sound decisions made

by the Eckes-Granini Group.

And that creates new impulses for our brands.

Eckes-Granini will once again focus on two new

growth segments this year: chilled juices, with the

granini Sonnenfrisch / Sun Fresh / al Sol concept,

and non-carbonated thirst-quenchers, with the intro-

duction of hohes C Naturelle.

Finland

Russia

Germany

Austria

HungarySwitzerland

France

Spain

| Overview |

European markets grew only moderately in 2006,

while the market in our core countries (data from seven

core countries, retail food trade), declined slightly by

1.5 %. In spite of difficult market environments in

some countries, the Eckes-Granini Group succeeded

in achieving overall growth with its strong brands and

raising the value-based market share of the Group as

a whole to 13.7 % (data from seven core countries,

retail food trade). Our national organizations defended

and extended their number 1 and number 2 positions

in their local markets.

The Group also recorded dynamic growth in export

markets. Export volume sales increased by 19 % over

the preceding year. The largest contributor to export

growth was granini. Réa, hohes C, YO Syrup and SIÓ

also achieved gains over the previous year.

In order to improve strategic planning for export

activities and ensure more effective planning support,

a new international business division responsible for

coordinating all export activities was established in

October 2006.

Romania

Lithuania

24 Our Countries

Lithuania, Baltic Region

Russia

Austria

Switzerland

Hungary

Finland

Spain

France

Germany

25Our Countries

Contribution to turnover by country in 2006** (figures rounded)

| ** Base: core business (fruit beverages)

Germany hohes C, granini, FruchtTiger 13.1 % 1

France Joker, Réa, granini 12.9 % 2

Spain granini 10.3 % 2

Finland Marli, Mehukatti, granini 34.7 % 1

Hungary SIÓ, hohes C 24.7 % 1

Switzerland granini, hohes C 10.6 % 1

Austria YO Syrup, hohes C, FruchtTiger 10.4 % 2

Russia Uslada, granini developing market developing market

Romania granini developing market developing market

Lithuania Elmenhorster 23.7 % 1

| Source: leading market research institutes (Base: value sales retail trade)

Country Strategic brands Value-based market share Market position

1 %

2 %

4 %

4 %

5 %

7 %

8 %

27 %

35 %

Value-based market share*: 34.7 %

Strategic brands: Marli, Mehukatti, granini

New products / important events:

Marli Juissi Red Energy, Marli Vital syrup range,

Mehukatti ready-to-drink, granini 1.0-litre

carton range

26 Finland

OY MARLI AB: FOCUS ON STRATEGIC BRANDS CONTINUES TO PAY DIVIDENDS

| Finland |

Volume sales in the Finnish fruit beverage market

declined slightly by 1.0 %* in 2006, although the

extremely warm summer boosted syrup sales in

Finland by 1.6 %*.

Oy Marli AB once again recorded double-digit growth

driven by strategic brands (+19 %). The company’s

value-based market shares rose to 34.7 %* (fruit bever-

ages) and 35.3 %* (syrup), respectively. This gratifying

result was achieved by focusing on the strategic brands

– Marli, Mehukatti and granini – and boosting invest-

ments in TV and print advertising substantially.

Volume sales of the Marli brand rose by 20 %, and

the Marli Juissi, Marli Vital and Marli Natur lines contri-

buted significantly to overall growth. The most success-

ful innovations were Marli Juissi Red Energy and Marli

Vital syrups, the first syrup line with vitamin supple-

ments in the Finnish market. Highly popular among

families with small children in 2006 was the new

Mehukatti ready-to-drink concept in the 0.5-litre PET

bottle with sport cap and a 1.5-litre carton assortment.

Granini gained positive impulses from the launch of

the new 1.0-litre carton range.

The company has set its sights on continued growth

with numerous new products in 2007. The new

Marli Juissi fruit beverage line without added sugar is

expected to attract young consumers in particular. A

special syrup edition will be introduced in conjunction

with the thirtieth anniversary of the Mehukatti brand.

The most important innovation in the Mehukatti

portfolio will involve the consistent extension of the

ready-to-drink range through the addition of the prac-

tical 0.25-litre single-portion Cubito carton. Oy Marli

AB plans to strengthen and improve its market position

in the premium segment with the launch of the granini

Sun Fresh line of chilled juices.

| * retail food trade

27Lithuania & the Baltic Region

| Lithuania & the Baltic Region |

ECKES-GRANINI ACqUIRES THE MARKET LEADER IN LITHUANIA, STRENGTHENING ITS POSITION IN THE BALTIC REGION

The Baltic markets (Estonia, Latvia and Lithuania) for

fruit beverages showed strong growth in the range

of 7–10 % in 2006.

Business in the Baltic region was expanded substan-

tially with gains of 35 % in turnover and 19 % in

volumes sales, to which Estonia was the largest con-

tributor. Positive trends were also evident in Latvia and

Lithuania. These results were augmented by signifi-

cant increases in turnover and volume sales achieved

through the acquisition of the Lithuanian market

leader UAB Elmenhorster (June 2006), which clearly

strengthened our position in the Baltic region.

The most important product launch in the Baltic

countries in 2006 was the new granini line in 1.0-

litre cartons. Initiated concurrently in Estonia, Latvia

and Lithuania, the launch was supported by print ad

campaigns and promotions in the retail trade. The

presentation of the new flavour variety Marli Red Mul-

tivitamin resulted in volume sales gains in the 2-litre

range in Estonia. A similar concept was established for

the Elmenhorster brand in Lithuania in late 2006.

Value-based market share: 23.7 % (Lithuania)

Strategic brands:

Elmenhorster, Marli, granini


granini 1.0-litre carton range, Marli Red Multi-

vitamin, Elmenhorster Red Multivitamin

Acquisition of UAB Elmenhorster, Lithuania

Activities in 2007 will focus on strengthening the

Elmenhorster brand in Lithuania with innovative con-

cepts and advertising support. Emphasis will be placed

in Estonia and Latvia on expanding innovative product

concepts for the Marli and Elmenhorster brands.

OY MARLI AB: FOCUS ON STRATEGIC BRANDS CONTINUES TO PAY DIVIDENDS

| Finland |

ECKES-GRANINI FRANCE SNC: SHARPER BRAND POSITIONING FOCUS – ON COURSE FOR THE FUTURE

| France |


Strategic brands: Joker, Réa, granini


Joker Vital, Joker Vital 5, Réa Réveil Douceur,

granini Orange-Maracuja and Orange-Carrot-

Lime, Joker Pulpéa Orange and Multivitamin

in the new 0.33-litre PET bottle

Launch of production on the new PET line

in Mâcon

Volume sales in the French fruit beverage market rose

by 2.9 %* in 2006, driven above all by strong growth

in sales of chilled juices as well as 1.5- and 2.0-litre

family-size containers.

Eckes-Granini France SNC profited from this general

growth trend and increased turnover sales with 10 %.

The company now holds a value-based market share

of 12.9 %*. The Joker and Réa brands occupy leading

market positions, which they were able to defend in

a highly competitive market.

Especially noteworthy accomplishments during the

past business year were the double-digit (+11 %)

gain in sales of Joker in the unique oval carton and

the entry into the chilled beverages segment with the

innovative Joker Vital and Joker Vital 5 concepts.

Joker Vital 5, a mix of five fruits that meets consum-

ers’ total daily vitamin requirements, reached many

new consumers within the first six months. This line

was selected for the “Saveur de l’année” award as

one of the best innovations of the year.

28 France

The major TV advertising campaign launched in 2006

will be extended in 2007. The objective is to under-

score the brand‘s promising position in the health seg-

ment and to strengthen Joker in the chilled beverages

segment on a sustained basis in 2007.

Réa introduced “Réveil Douceur” in a 2.0-litre carton

as a mild variety that is particularly attractive for

children. This course will be pursued in 2007 with the

rigorous repositioning of Réa as a children’s brand –

supported by a mascot created especially for this

purpose, a new package design and the conversion

of all juices to mild varieties.

Granini was extended through the addition of

two new flavours: Orange-Maracuja and Orange-

Carrot-Lime.

In the out-of-home sector, Eckes-Granini France SNC

strengthened its lead over competing producers, with

Joker as the number one brand. The acquisition of

new clients, including Air France and Club Méditer-

ranée, and the presentation of new products con-

tributed significantly to overall results. Turnover from

sales of Joker Pulpéa doubled over the preceding year

following the introduction of the 0.33-litre PET bottle

for the Orange and Multivitamin varieties.

One of the outstanding events of the past year was

the commissioning of the new PET line in Mâcon in

November 2006. By December, the first 1.0-litre

PET bottles of Joker were coming off the bottling line.

This was a milestone event, as the installation of this

system represents a major change of strategy in favour

of PET in place of glass bottles. In 2007, the company

plans to convert the direct juices of the Joker line as

well as the products in the granini range from glass

to convenient PET bottles.


ECKES-GRANINI FRANCE SNC: SHARPER BRAND POSITIONING FOCUS – ON COURSE FOR THE FUTURE

29France

30 Germany

ECKES-GRANINI DEUTSCHLAND GMBH: THE GERMAN MARKET LEADER PULLS AWAY

| Germany |


Strategic brands:

hohes C, granini, FruchtTiger


hohes C Red Multivitamin, granini Fruchtig-

Frisch Citrus-Mix, FruchtTiger Sport Apple-

Citrus, FruchtTiger Cubito, granini Cocktail

Basics range

Commissioning of the second cold-aseptic

PET bottling line

The German market for fruit beverages continued to

shrink in 2006, with volume sales down 3.7 %*. The

situation was accompanied by major structural chang-

es resulting from the progressive conversion from glass

to PET bottles and the trend toward one-way rather

than returnable packaging systems.

In contrast to this general negative trend, Eckes-

Granini Deutschland GmbH once again extended its

lead among brand producers with double-digit gains

in turnover and volume sales in 2006. The company’s

value-based market share rose to 13.1 %*. With these

outstanding results, the German national organization

made yet another significant contribution to the suc-

cess of the Eckes-Granini Group as a whole. The high

rates of growth were achieved despite price increases.

Once again, growth was driven above all by the stra-

tegic brands hohes C (volume sales +10 %), granini

(volume sales +19 %) and FruchtTiger. This success

was attributable in large measure to the expansion of

base business. Additional growth impulses came from

the introduction of new, innovative product concepts.

Highlights included the launch of hohes C Red Multi-

vitamin, which became one of the volume leaders in

the hohes C line within just a few months. This success

was confirmed by awards received from consumer

and trade organizations.

granini strengthened its position thanks to continued

strong growth in sales of juices and nectars in PET

bottles. Additional impulses were generated by the

refreshing granini Frucht Prickler carbonated beverage

line and the non-carbonated thirst-quencher range

Fruchtig-Frisch, which was expanded with the intro-

duction of the new Citrus-Mix variety.

The FruchtTiger brand attracted new consumers with

the successful presentation of the Sport Apple-Cit-

rus variety and the launch of the innovative Cubito

single-portion unit in a 0.2-litre carton with twist-off

cap and straw.

Investments in consumer communication were

increased again in 2006 in order to provide sustained

brand support. The most important measures included

TV advertising for hohes C Red Multivitamin, granini

Fruchtig-Frisch and FruchtTiger Sport.

In the out-of-home sector, sales support measures fo-

cused above all on the provision of dispenser systems,

glasses and advertising material. The most successful

products in this sector were the 0.2-litre table bottle

in typical granini design and the newly introduced

granini Cocktail Basics range.

Eckes-Granini Deutschland GmbH not only generated

decisive impulses in terms of products, sales and mar-

keting but also built its lead in the field of packaging

technology as well. As a logic consequence of the

pioneering decision taken several years ago to focus

mainly on one-way PET bottles, the second cold-asep-

tic bottling line in Germany was commissioned at

the Bröl facility in 2006.

Plans for 2007 call for development and further

expansion of the growing “chilled juices” and “fruity

thirst-quencher / refreshment” segments with granini

Sonnenfrisch and hohes C Naturelle, respectively.


31Germany

ECKES-GRANINI AUSTRIA GMBH: LEAD IN THE SYRUP MARKET MAINTAINED

| Austria |


Strategic brands:

YO Syrup, hohes C, FruchtTiger


hohes C Red Multivitamin, hohes C Mild

juices, YO Syrup Apple-Lemongrass,

light variation of Citron Iced Tea

Alliance with the German sister organization

While the syrup market recorded 3.2 % volume

growth, volume sales in Austrian market for fruit

beverages fell by 2.3 % in 2006*.

Eckes-Granini Austria GmbH grew volume sales by

6 % in 2006, although sales of branded products

lagged behind expectations. The company achieved

a value-based share of 10.4 %* in the fruit beverage

market, while maintaining its leadership in syrups with

a market share of 28.6 %*.

The hohes C range was extended through the ad-

dition of the successful Red Multivitamin and Mild

Juices concepts. The company achieved good results in

the syrup market with YO Syrup. Volume sales slipped

slightly, however, due to the effects of necessary price

adjustments. The YO Syrup line was supplemented

with two trendy flavour varieties: Apple-Lemongrass

and light variation Citron Iced Tea.

The alliance with the German sister company in mid-

2006 marked the beginning of major organizational

changes. The goals of these restructuring measures

are to synchronize and harmonize marketing and sales

activities in order to reach more effective synergies

through the implementation of joint measures.


32 Austria

| Austria | | Hungary |

SIÓ-ECKES KFT.: SIÓ GAINS STRENGTH AS THE NUMBER 1 BRAND


Strategic brands: SIÓ, hohes C


hohes C Red Multivitamin, hohes C Pineapple

Optimized packaging design for SIÓ,

Distribution partnership with Szentkirályi Water

(No. 1 in the Hungarian bottled water market)

The Hungarian market for fruit beverages recorded

slight volume growth (+1 %)* during the past

business year.

Business year 2006 progressed extraordinarily well for

SIÓ-Eckes Kft. The company increased volume sales

with sales of strategic brands (+3 %). Turnover in the

core business for fruit beverages rose by a substantial

11.7 %. Sales of bottled water under the distribution

partnership with Szentkirályi Water brought a marked

rise in total volume (+90 million litres). SIÓ-Eckes Kft.

is now the market leader in both sectors – fruit

beverages and bottled water. This partnership enabled

SIÓ-Eckes Kft. to achieve valuable synergy effects and

enlarged its sales strengths in the market considerably.

SIÓ continued to build its lead as the number one

brand in 2006. The unique positioning of SIÓ as a

fruit juice brand with strong regional roots was further

strengthened during the past year. A new TV advertis-

ing campaign and the optimized packaging design

contributed significantly to this success.

In the fruit juice segment, hohes C defended its

position in the face of increasing competition. The

international hohes C Red Multivitamin concept and

a 100% pineapple juice were successfully introduced

during the year.

Overall, business year 2006 was a year of consolida-

tion and the development of a sound basis for further

growth for SIÓ-Eckes Kft.. Key accomplishments

included retention of the market lead with a value-

based market share of 24.7 %* and the expansion of

activities to encompass bottled water operations.

The strategic brands – SIÓ and hohes C – will pro-

vide further innovative impulses in the Hungarian

market in 2007.


33Hungary

| Romania |

ECKES-GRANINI ROMANIA S.R.L.: ENTRY INTO A RAPIDLY GROWING MARKET

The Romanian market for fruit beverages is an at-

tractive growth market with strong potential. The

consumption of fruit beverages has doubled since

2000, and volume sales rose by 20 % in 2006 alone*.

In this situation, the Eckes-Granini Group took a major

strategic step into this promising market during the

past business year with the establishment of a fully-

owned subsidiary, Eckes-Granini Romania S.R.L..

Value-based market share: developing market

Strategic brands: granini


Establishment of an Eckes-Granini subsidiary:

Eckes-Granini Romania S.R.L.

Introduction of a range of granini juices and

nectars in the retail food trade and the out-of-

home sector

As a strategic partner, Carlsrom Beverage Co.,

a highly successful brand supplier in the Romanian

beer market, has also been recruited. Carlsrom will

be responsible for the exclusive distribution of granini

products. The goal is to develop this premium brand

in the Romanian fruit beverage segment on the basis

of a long-term strategy.

The launch of a line of granini juices and nectars

in both the retail food trade and the out-of-home

sector was initiated in mid-2006 – supported by TV

commercials, numerous promotional activities and a

large-scale press campaign. Granini will be offered in

the innovative 1.0-litre PET bottle in its typical brand

design with an aroma-seal system. Granini will also be

available exclusively in the out-of-home sector in the

0.2-litre glass bottle.

Plans for 2007 call for continued expansion of the

product portfolio. Local production of granini at our

Romanian partner’s facility in 2007 will represent

another significant milestone.


34 Romania

| Romania |

35Russia

OOO ECKES-GRANINI RUS: VOLUME SALES DOUBLED WITH THE LOCAL USLADA BRAND

| Russia |

Value-based market share: developing market

Strategic brands: Uslada, granini


Conversion of the Uslada brand to the new

Uslada for Soul concept

Partnership with Gutta extended on a

medium-term basis in early 2007

The Russian market continues to grow at double-digit

rates, driven primarily by the large segment of low

to medium-priced products. A strong general trend

toward consolidation is evident in the Russian

beverage industry.

OOO Eckes-Granini Rus recorded strong volume

growth of 66 % in the past business year, powered

above all by the doubling in volume sales of the

strategic local Uslada brand. This growth was achieved

through gains in distribution and optimization of the

product portfolio. A key measure was the success-

ful conversion of the local Uslada brand to the new

Uslada for Soul brand concept.

The company will continue to focus on the expansion

of sales and distribution in 2007, giving high priority

to boosting sales of 1.5 - and 2.0-litre family-size con-

tainers. Innovative line extensions will include several

new flavour varieties.

The partnership established with Gutta in Russia

several years ago was placed on a firm footing for the

medium term in 2007. Gutta and Eckes-Granini Rus

have agreed to cooperate closely in production and

sales, thereby enabling both companies to pursue

further strong volume sales growth more effectively.

| Spain |

ECKES-GRANINI IBéRICA S.A.: OUTPACING THE MARKET AGAIN


Strategic brands: granini


granini 1.5-litre PET range

Following a strong business year 2005, which wit-

nessed volume growth of 9 % in the retail food trade,

the Spanish fruit beverage market recorded moderate

gains (+3 %) during the past year. The still relatively

small chilled juices segment grew at a rate of 18 %,

while non-chilled fruit beverages, which account for

95 % of total market sales, gained by only 2 %.*

Eckes-Granini Ibérica S.A. achieved appreciable

growth again in 2006. Both turnover and volume sales

increased by 5 %. The company’s value-based market

share rose to 10.3 %, placing Eckes-Granini in the

number 2 position in the market*.

New granini products – including four varieties

introduced in the 1.5-litre PET bottle during the first

six months of 2006 – generated new volume sales

potentials for the brand. The launch was effectively

supported by the “Besos” (“Kisses”) TV and print

campaign based on the strengths of the granini

brand – pleasure and enjoyment of life. Image surveys

among Spanish consumers show year for year that

the granini brand has assumed a unique position

in the fruit juice market.

Eckes-Granini Ibérica S.A. anticipates further growth

in sales of convenient PET bottles as an increasing

number of consumers recognize the advantages of

this packaging form. The company also expects to

profit from rapid growth in the chilled fruit juices seg-

ment with the introduction of the new granini

al Sol in 2007.


36 Spain

| Spain |

37Switzerland

ECKES-GRANINI SUISSE S.A.: MARKET LEAD MAINTAINED

| Switzerland |


Strategic brands: granini, hohes C


hohes C Vital Orange-Exotic,

granini “Fruit of the year” Orange-Kiwi

Installation of the PET bottle coating system

in Henniez

A highlight in terms of production technology was

the installation of the new PET bottle coating system

at the Henniez facility. With this investment, the

company has further strengthened its position as the

technology leader in the industry.

Plans for 2007 foresee the introduction of granini

Frucht Prickler, a concept that has achieved consider-

able success in Germany. This measure is expected to

generate new potentials in the growing segment of

refreshing fruit beverages.


The Swiss market for fruit beverages stagnated during

the past business year. Furthermore, the Swiss trade

was affected by a major upheaval. The sale of the Pick

Pay supermarket chain to the Swiss discounter Den-

ner has resulted in further concentration in the retail

trade. Competition grew more intense at the same

time, thus exerting downward pressure on consumer

prices – following the entry of German discounters

(including Aldi) into the Swiss market.

Despite these difficult conditions, Eckes-Granini

Suisse S.A. maintained its market lead with a value-

based share of 10.6 %* and recorded 3.4 % growth in

volume sales.

Both the classic hohes C juice line and the hohes C

Vital wellness range, which established a strong foot-

hold in the market and was extended through the ad-

dition of a third variety – Orange-Exotic – performed

very well in 2006. Granini continues to hold its lead

both in the retail food trade and the out-of-home

sector. The successful “Fruit of the year” concept for

granini was supplemented by the Orange-Kiwi variety.

Both brands were promoted through TV advertising

and POS activities.

38 Key Business Figures

| Key Business Figures |

Profit and Loss Statement (in million EUR) 2005 2006

Volume in million Litres 896 1.067

Net Sales before excise taxes 718 818

Excise taxes -7 -6

Net Sales after excise taxes 712 812

Purchases -393 -480

Personnel Costs -73 -79

Depreciation -16 -13

Other Expenses -186 -202

Earnings before Interest and Taxes (EbIT) 43.6 37.0

EbIT margin 6.1 % 4.6 %

Balance Sheet (in million EUR) 2005 2006

Assets

Fixed Assets 166.4 176.4

Inventories 62.4 67.1

Accounts Receivable 91.2 101.1

Other Assets 34.5 30.7

Cash 2.7 5.4

Total Assets 357.3 380.7

Equity and Liabilities

Equity 93.9 101.0

Provisions 80.5 98.8

Liabilities 182.9 181.0

Total Equity and Liabilities 357.3 380.7

| Commentary |

Profit and loss statement

Eckes-Granini achieved gains in both volume sales and

turnover once again in 2006 in the wake of the record

year 2005. In the core business, the Group topped the

strong 6.4 % volume gain of 2005 with a rise of 9 %

for the past business year. Significant contributors to

this success were the extraordinary market perform-

ance of the German national organization and the

positive development of the Russian subsidiary.

Although earnings (EbIT) of EUR 37 million fell below

the 2005 figure, they were significantly higher than

expected. Despite the substantial rise in volume sales,

it was not possible to offset the significant price

increases for raw materials. Markedly higher media

investments in 2006 also had a negative impact on

earnings, as investments in consumer communication

in support of Eckes-Granini brands rose by 15 %.

Balance sheet

The partial group balance sheet total was EUR 23

million higher than in 2005. Fixed assets rose prima-

rily as a result of the acquisition of UAB Elmenhorster

in Lithuania and the commissioning of new PET

lines in Germany and France. This also resulted in an

increase in current operating assets.

Equity capital rose to EUR 101 million, and the capital

ratio of 27 % was slightly up over the previous year.

Net debt was reduced by EUR 18 million, however,

due primarily to a healthy cash flow. Thus both the

acquisition and investment in production lines were

offset by current operating cash flows.

39Commentary

| Eckes-Granini in the Internet |

Corporate Website:

www.eckes-granini.com

National Websites:

www.eckes-granini.at

www.eckes-granini.ch

www.eckes-granini.de

www.eckes-granini.es

www.eckes-granini.fi

www.eckes-granini.fr

www.eckes-granini.hu

www.eckes-granini.ru

www.egnordic.com

www.elmenhorster.lt

www.marli.ee

www.marli.fi

www.sioeckes.hu

40 Internet

Brand Websites:

www.fruchttiger.at

www.fruchttiger.de

www.granini.com

www.granini.at

www.granini.ch

www.granini.de

www.granini.es

www.granini.fi

www.granini.fr

www.granini.hu

www.granini.ru

www.hohes-c.com

www.hohes-c.at

www.hohes-c.ch

www.hohes-c.de

www.hohes-c.hu

www.joker.fr

www.marli.fi

www.mehukatti.com

www.rea.fr

www.sio-juice.hu

www.uslada.ru

www.yo-natur.at

www.yo-pur.at

www.yo-vital.at

Eckes & Stock Group

| Corporate Boards |

Advisory Board of Eckes-Granini GmbH & Co. KG (until November 30, 2006)


Hermann Arnold Deputy Chairman

Dr. Ottokarl Finsterwalder

Volker Stühmeier

Board of Supervisors of Eckes AG


Stefan Kobold Deputy Chairman

Dr. Karl Brings

Dr. Hans Falk-Bjerke

Axel Hamm

Bernard Huber

Management Board of the Eckes-Granini Group GmbH*

Thomas Hinderer Chairman

Sidney Coffeng Marketing, R&D, Export and PR

Heribert Gathof General Manager Eckes-Granini Germany

Albert Grätz Finance, Controlling, M&A

Sabine Holtkamp Human Resources, Organizational Development

Sylvain Jungfer General Manager Eckes-Granini France

Dr. Peter Nagel Supply Chain

* Eckes-Granini GmbH & Co. KG was formally reconstituted as the Eckes-Granini Group GmbH effective January 30, 2007.

All key figures for business year 2006 cited in the Annual Report relate to Eckes-Granini GmbH & Co. KG.

National organizations National organizations

Eckes AG

Eckes-Granini Group

Eckes-Granini Deutschland GmbH Nieder-Olm / Germany

Oy Marli AB Turku / Finland

Eckes-Granini France SNC Sarre-Union / France

Eckes-Granini Austria GmbH Kröllendorf / Austria

OOO Eckes-Granini Rus Moscow / Russia

Eckes-Granini Ibérica S. A. Barcelona / Spain 51 %

Eckes-Granini Suisse S. A. Henniez / Switzerland 51 %

SIÓ-Eckes Kft. Siófok / Hungary

Eckes-Granini Romania S.R.L. Bucharest / Romania

UAB Elmenhorster Vilnius Vilnius / Lithuania

100 % interest unless otherwise indicated.

| Key figures |

| National organizations |

2005 2006 Diff.

Volume sales in million litres 896 1,067 +19.2 %


Net turnover in million EUR 718 818 +13.9 %


Earnings before interest and taxes (Ebit) in million EUR 43.6 37.0 -15.2 %

Employees* 1,487 1,457

* Full-time equivalent

Publisher

Eckes-Granini Group GmbH*

| * Eckes-Granini GmbH & Co. KG was formally reconstituted as the

Eckes-Granini Group GmbH effective January 30, 2007.

All key figures for business year 2006 cited in the Annual Report

relate to Eckes-Granini GmbH & Co. KG.

Main Office

Ludwig-Eckes-Allee 6

55268 Nieder-Olm, Germany

Telephone: +49 (0) 61 36 / 35 05

Telefax: +49 (0) 61 36 / 35 10 81


Contact



Telephone: +49 (0) 89 / 89 35 63-3

Telefax: +49 (0) 89 / 89 39 84 29


Concept



Design und Realisation

Welcome Marketing GmbH, Schondorf am Ammersee

Photo Credits

Eckes-Granini Archive

Jan Greune, Münsing

Karl Newedel

Getty Images

This Annual Report is also available in German.

Dieser Geschäftsbericht ist ebenfalls in deutsch erhältlich.

.

| Publishing Data |

| VISION |

Eckes-Gran

ini G

rou

p A

NN

UA

L REPO

RT 2006

| Brand quality that bears fruit | ANNUAL REPORT 2006



















VISION - Global Food Industry and Business News · Dr. Peter Nagel Supply Chain * Eckes-Granini...

Documents

Transcript of VISION - Global Food Industry and Business News · Dr. Peter Nagel Supply Chain * Eckes-Granini...