Oeneo results in line with expectations

Last year was a tough one for French closures and barrels group Oeneo, formerly known as Sabaté Diosos. But the company ended the year with results in line with expectations as restructuring efforts at both the closures and barrels arms began to slowly bear fruit.

Turnover for the group was €171 million, some 15 per cent less than the year before but in line with Oeneo's expectations given tough market conditions in both France and the US.

Sales at the closures arm were 14.1 per cent lower at €81.2 million, with a stable performance from the Altec high-tech closure business offset by a downturn in corks for sparkling wine producers following the decision by the company's Sibel business not to supply high-volume, low-margin markets.

There was also a continued downturn in sales of natural corks, underling "the need for investment to underpin the quality and competitiveness of the group's products", the company said in a statement. Oeneo is currently in the process of a major overhaul of its closures division.

At the barrels division, which is essentially the Seguin Moreau cooperage, sales for the year were €85.5 million, 14.2 per cent lower than in 2002, although the business rallied strongly in the final quarter with sales down 'just' 7.3 per cent compared to a 16.7 per cent drop in the first three months.

The company announced the loss of around 30 jobs at its barrel making plants in Pouilly-sur-Loire and Merpins last month as part of a cost-cutting plan at Seguin Moreau, made necessary by the increasing tendency amongst operators to defer investments in barrels and the second successive poor wine harvest.

It was this, and other measures designed to boost sales outside France, which helped stabilise sales in the final quarter. Turnover in Europe, excluding France, was ahead 13.7 per cent during the final three months of the year, helping to offset the declines in Oeneo's home market and in North America.