V&S’s international success brings all-time high

• Operating profit best ever – an increase of 27 per cent • Improved profit for all business areas • ABSOLUT VODKA volume up 9 per cent

Operating profit for V&S Group (Vin & Sprit) improved dramatically in 2005 to an all-time high of SEK 2,070 million (+27%). Profit after tax amounted to SEK 1,561 million (+42%). Sales volume totalled 24.9 million 9-litre cases, an increase of 1 per cent. Net sales increased by 6 per cent to SEK 9,839 million. “It is extremely pleasing to see that our focus on growth and realizing synergies from the acquisitions of recent years has begun producing results,” says Bengt Baron, CEO of V&S Group. “All three of our business areas are showing improved results thanks to a better product mix and reduced costs. “Increased sales of the Group’s largest brand, ABSOLUT VODKA, is a result of our strategy also to focus on markets outside the United States, coupled with successful product development,” Bengt Baron continues. “We are continuing to grow by a few per cent in the United States, although percentage growth is in double figures on many other markets in Latin America, Europe and Asia.” In V&S Absolut Spirits, the Group’s business area for international brands, volumes increased by 6 per cent and sales by 8 per cent. Profit was up 13 per cent. The majority shareholding in the Cruzan Rum brand was acquired during the year, and its figures have been included in the financial accounts since the fourth quarter of 2005. The V&S Distillers business area reports a decrease in sales volume (-5%), primarily due to lower sales in Sweden and the closure of the Czech operation. Despite this, profit increased by 15 per cent, largely due to a focus on the core business. The V&S Wine business area also saw a slight decline in sales volume (-3%), due to the sell-off of retail operations and less subcontracted bottling in Denmark, and the loss of an agency in Sweden. Profit increased sharply (+47%), although from a low level, and is primarily attributable to greater efficiency. “For some years now our market initiatives have not been reflected in our profit figures due to the weakening US dollar. The dollar stabilized in 2005 and we are now seeing the full effect of our efforts,” Bengt Baron concludes. The entire year-end report can be viewed at www.vsgroup.com