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Rexam posted record sales and underlying operating profit, up 28% and 32% respectively, for fiscal 2008. Organic sales were up 7%, driven by price increases and volume growth in beverage cans.
"Rexam is a resilient business as proved by this set of results, but we are not immune to the global economic crisis, and trading in the second half of 2008 weakened as market conditions deteriorated," said Leslie Van de Walle, CEO, Rexam. "However, the company is flexible and able to adapt to new, more challenging circumstances without compromising our vision of being the world’s leading consumer packaging company. We recognize that times are uncertain and that it is difficult to predict how the economic downturn will effect our trading in 2009, but we remain focused on generating cash and managing costs to underpin the progress we made in 2008."
The plastic packaging business—which includes the healthcare, personal care and closures business divisions—accounted for 34% of Rexam’s underlying operating profit. Reduced customer demand, particularly in the last two months of the year, effected the personal care and closures businesses. Toward the end of the year, results came under pressure as customers reduced inventory levels and destocking became a greater issue throughout the supply chain. Investments continued, however, in the development of new products such as XD11, a new fragrance pump, and Oxygen, a lipstick mechanism that is being developed as the new standard.
Sales in personal care were flat year on year, with growth in dispensing systems and makeup offset by continued softness in the home and personal care business. In dispensing systems, sales grew in line with the market driven by strong demand in Brazil and higher demand for lotion pumps and foam pumps. Demand for fragrance pumps and samplers was lower, as key customers focused resources on refining their existing product lines rather than on new launches. Makeup sales grew slightly, as it maintained its market share position on increased volume demand from key European customers. Volumes in Europe doubled from a low base, with the increase being driven largely by increased demand for a major branded men’s care product following its launch in Russia.
The complete report is available here.