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Central European Distribution's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stocks in this article: CEDC

Spirit prices have remained stable. There's this little chart that we'll come to later on spirit prices. Exports continue strong growth, 17% in volume terms, even more in value. And again, we've been working on our mix, client mix, product mix, new product launches that we've made in the flavor category and working on the small sizes, which are more profitable, the 0.2 and the 0.1 size. So overall, that's had a very positive contribution to our earnings in Q1.

If you turn to the next page, we get into the different sectors. As you can see, 7% growth at the top, it's of vodka, which was 18% in value. And that's a big increase in value, 18%. Again, that was mainly driven from the mix, of SKU mix, client mix, pricing and product mix. The growth was mainly led by Biala, which as you know we launched about 18 months ago in November '10 and also Soplica, which we have restyled. Soplica was up close to 80% growth, and our flavors that we launched are over 100% growth rate. So -- and flavors are much more popular than clear, and the flavor category is growing in Poland, which now accounts for over 20% of the total vodka market.

Also, what stands out was the large growth of our brown spirit portfolio. We've done a lot of work with Grant and the Jim Beam brands to really push hard. And with their investments, the brown spirits, which is still growing quite dramatically in Poland -- Poland is now in the top 20 largest brown spirit markets in the world, and it's growing at around 20%, 25% annual. So we're doing a lot of work to really push our strong brown spirit portfolio, Grant, Jim Beam, Metaxa as well as our other brown spirits that we represent here in Poland.

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