4 - Refresco.de

Business review 2009
Investments in 2009
As anticipated in the annual report of 2008, Refresco’s
investments in 2009 were above the 2008 level. In total
EUR 48.5 million was invested at the nineteen production sites.
Part of the total investments was spent on the expansion of
capacity in the Benelux, France and Iberia. Also in the UK and
Nordics we have been spending capex on new production
lines. All these investments should be seen as the fundament
for further organic growth in 2010. The remainder was spent
on replacement projects, refurbishing and modernizing our
manufacturing setup to the required standards. Special focus
was put on cost reduction. Capex projects with clear cost
advantages were ranked as top of the list throughout 2009.
We expect the level of investment in 2010 to be slightly
below the 2009 level.
Acquisition strategy
Since 2000 Refresco has successfully realized 10 acquisitions
of strong regional soft drink and juice manufacturers in eight
countries. Because of the turbulent financial markets, which
also impacts Refresco’s shareholders, we were limited in
carrying out our acquisition strategy in 2009.
Since the end of 2009, the ‘Buy’ in our Buy & Build strategy
regained its focus because the required financial support for
all sizes of acquisition projects became available again in the
market. We will re-accelerate the Buy & Build strategy in the
coming years, where potential targets will have our interest
and will be reviewed. The acquisition strategy for 2010 will
focus on further expansion of our business within our current
geographic presence and adjacent countries.
Within the classical Buy & Build acquisition strategy we
distinguish three acquisition areas that will jointly enable the
accomplishment of our mission: to complete our portfolio, to
expand our presence in new markets, and finally, to increase
throughput of production sites acquired from A-brands. First,
we aim to complete our product portfolio by buying companies
with portfolios of products that strengthen our presence in
existing markets. This way we can realize operational, cost and
purchasing synergies and improve our offerings to customers.
Second, we will acquire companies to expand our presence in
new markets. This will give us access to large markets like the
UK and fast-growing markets such as Eastern Europe. It will
also enable us to realize revenue synergies through cross-selling
products and purchasing synergies; it supports customer growth
too. This will provide a platform for additional international
acquisitions in order to develop the business further. Third, we
will acquire manufacturing facilities from A-brand companies to
drive earnings uplift by increasing throughput of the acquired
plant. This will also strengthen the relationship with the
A-brand vendor. The combined customer base of retailers and
A-brand companies will allow us to improve plant utilization
without creating conflicts of interest. Because of the worsened
economic situation in 2008 and 2009 and the subsequent drop in
financial back-up we needed to find alternative ways of growing
our business. We were able to expand our business in another
manner than by acquisitions: through a cooperation agreement.
Acquisitions in 2009
In 2009 two deals were closed. A sales and purchase agreement
was closed in the Netherlands in April 2009 with Bavaria N.V. to
acquire the soft drink production site of Bavaria - Schiffers Food
- in Hoensbroek (The Netherlands). Schiffers Food produces
carbonated soft drinks (CSDs) and mineral water in PET, mainly
as a private label for major retailers. This company has become
part of the Refresco Benelux business unit, expanding the
portfolio of Refresco Benelux with PET for the Dutch market.
It provides greater opportunities to optimize production in the
Benelux as well as to service the market better.
“This year’s business focus