In 2010 Duvel Moortgat, Belgian specialty brewer, managed to record “a fine growth”, the company announced on Tuesday. Owing to the relentless attention to quality as well as the efforts and drive made by its staff, Duvel Moortgat managed to register a rise in turnover for nearly all its beers in the priority markets. A new and strong brand, De Koninck, was added to the portfolio. In August, Duvel Moortgat concluded an agreement for the takeover of 100 % of shares of the Brouwerij De Koninck group based in Antwerp, its strongest brand being ‘Bolleke Koninck’.
Consolidated turnover grew by 21,2 %, 13,5 % of this being internal growth, and 7,7 % is brought on by the De Koninck group. The non-Belgian markets represented 43,5 % of the consolidated turnover. Turnover in the priority export markets – the Netherlands, France, the United Kingdom and the United States – rose by 21,8 % in 2010. In the other export markets, turnover rose by 7,8 %.
Abroad, Duvel Moortgat continues to expand its other brands next to Duvel. Owing to the fact that all beers in the portfolio are complementary, the supply in the different markets can be tuned to the local needs and tastes.
In order to support growth, in 2010 further investments were made in human resources and in brands. Structures in Belgium and abroad were fortified. The number of employees has risen from 170 in 1999 – when Duvel Moortgat was first quoted on the stock market – to 719 at the end of 2010. These figures include the 70 employees of the De Koninck group.
In 2010, Duvel consolidated its position as the strongest brand within the group, and gained further popularity abroad. Turnover rose globally by 7,2 %. Both in the Netherlands as in France, the United Kingdom and the United States, a firm growth could be recorded. The emphasis on other promising markets was intensified, amongst wi in the growing economies.
The Chouffe beers further continued their international expansion and managed to record a 31,7 % rise in turnover.
Both brands of the Vedett beers, Vedett Extra Blond and Vedett Extra White, registered a strong growth in Belgium, the Netherlands and the United Kingdom, 12,7 % and 16,3%, respectively. In China, there is also an increasing interest in the Vedett beers, while Vedett Extra White especially is growing increasingly popular in Japan.
Despite the huge range and large variation that exist in the segment of Abbey Beers, the Maredsous abbey beers succeeded in building out their name and reputation.
In 2010, the Liefmans beers belonged for the first complete year to the Duvel Moortgat portfolio, since the repositioning of the product range of our fruitbeers in 2009. . Results came up to expectations. Liefmans was reintroduced not only in Belgium, but also in other countries that show potential.
After the takeover of the De Koninck brewery, the necessary efforts were made immediately in all fields in order to reinstate this strong brand in full splendour in the main markets: Belgium and the Netherlands. As it is the case for all of the group’s brands, at De Koninck as well now each aspect of the product is submitted to the strictest of quality standards.
Once again, the Bernard brewery performed well. In the future, Bernard is determined to distinguish itself even more from the bigger breweries by producing increasingly specialty beers, such as those known on the Belgian market. Abroad also, Bernard managed to grow further, namely in Central Europe, Scandinavia and the United Kingdom.
In the United States, Brewery Ommegang saw a rise in turnover of all its brands of 46.6% (Ommegang Abbey, Hennepin, Rare Vos, Three Philosophers and Witte) in 2010. Ommegang consolidated its special position within the landscape of American specialty beers, being the only American brewery of specialty beers directly owed by a Belgian brewery, and hereby representing the unique Belgian brewing tradition. In order to emphasise this know-how, in 2010 also, a few extraordinary specialty beers were launched.

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These consolidated annual figures were drawn up in conformity with the International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB) and the interpretations thereof as published by the International Financial Reporting Committee (IFRIC), as adopted by the European Union until 31 December 2010.
During the 2010 financial year, the Duvel Moortgat Group realised a consolidated turnover of € 137 million, which results in a 21,2% rise. 7,7 % or € 8,7 million of this is the result of the consolidation of turnover for 5 months of the De Koninck group.
The operating income rises by 23% to € 141,8 million.
The results of operating activities (EBIT) rise by 22,3 % to € 29,3 million. The consolidation of the De Koninck group as from 1 August, takeover costs and increased marketing efforts slightly delayed growth of the result in the second half of 2010. The EBIT margin rises from 21,2 % in 2009 to 21,4 %.
The results of operating activities after net finance costs rise by 26 % to € 27,5 million. The 2010 financial results are positively influenced mainly by the results of conversions of receivables, debts and foreign currency credits at the final rate per 31/12/2010.
Duvel Moortgat makes use of derivatives only in order to limit impact of fluctuating interest rates. However, derivative instruments used for economic hedging that are not strictly in accordance with the accounting measurements of hedging operations as stated in IAS 39: ‘Financial Instruments: Recognition and Measurement’, are measured as financial assets or liabilities at fair value through the income statement. In this respect, € 219.000 was recognised as financial costs.
The consolidated profits rise by 27,1 % to € 18,9 million. De gross operational cash flow (EBITDA) rises by 18,3 % to € 42,2 million. The EBITDA margin drops by 31,5% to 30,8%.
The Board of Directors will propose to the General Meeting of Shareholders that the gross dividend be raised from € 1,12 to € 1,30 per share. This corresponds to a payout ratio of 36,27% of the consolidated profit.

Changes in the Consolidation Scope
On 5 August 2010, all shares of the Brouwerij De Koninck group, situated in the heart of Antwerp, were acquired. ‘Bolleke Koninck’ is consumed mainly in the Antwerp area and the Netherlands, but is appreciated far beyond those borders by authentic specialty beers connoisseurs. This takeover completes the Duvel Moortgat portfolio of specialty beers.
Duvel Moortgat equally acquired a significant amount of properties, mainly in the Antwerp region. The property included the brewery site and some 70 bars and pubs.
The takeover also includes the beer trading company Brouwerij De Valk from Wijnegem. De Valk daily supplies beers to hundreds of bars and restaurants.
Duvel Moortgat paid a fixed amount of € 29.850.000 for the entire De Koninck group. This takeover was paid for from the cash flow for € 3,85 million, the rest is financed by investment credits at fixed interest rates.
The investments made by the group in tangible assets amounted to € 16,2 million. These investments were mainly made in the continuous extension and renovation of the pubs and caf?s, and company buildings to the amount of € 3,7 million, the increase and renewal of crates, bottles and barrels (€ 4,4 million), a warehouse at the Brewery Ommegang to the amount of € 0,8 million, the Achouffe visitor centre (€ 0,5 million), and investments in the production plant at the Brasserie d’Achouffe to the amount of € 1,2 million.

Prospects
Duvel Moortgat managed to produce fine results in 2010. Barring any new and unexpected economic developments in the main markets, the group is confident that it is able to grow further in terms of turnover and results in 2011.