Results for the 2nd quarter of 2007-2008: Net earnings up 6.6%



    MONTREAL, Oct. 25 /CNW Telbec/ - For the 12-week period ended on
September 15, 2007, the SAQ had net sales of $574.5 million, an increase of
$46.1 million or 8.7%. It also posted consolidated net earnings of $173.7, up
$10.7 million or 6.6% from the corresponding period of the previous fiscal
year.
    For the first six months of its fiscal year, the company's net sales
totalled $1.124 billion, a $102.2 million or 10.1% increase. Consolidated net
earnings rose by $37.1 million or 12.4% to $335.6 million.
    Sales growth in the second quarter was once again attributable to the
excellent performance of the outlet and specialized centre network.
Specifically, sales there totalled $451.5 million, compared with
$419.8 million in the previous year, and accounted for more than 90% of the
overall increase in net sales(1) for the quarter. The average in-store
purchase during the quarter was $37.21, as opposed to $36.10 in the previous
fiscal year. For their part, net sales in the wholesale grocer network rose
$3.3 million or 5.8% to $60 million.
    As regards volume sales by category, wines increased 7.1%, from
28 million litres to 30 million litres. Volume sales of spirits, which are
sold only through the outlet and specialize centre network, totalled
4.4 million litres, an increase of nearly 5% over the corresponding period of
the previous fiscal year.
    The fact that volume sales of wine grew more slowly than net sales
confirms that customers' tastes continue to evolve toward higher-end wines,
especially as the retail prices of a significant number of products were
lowered in June and July.
    Second quarter operating expenses were $103 million compared with
$101.8 million for the previous year. For the first six months of the fiscal
year, they totalled $207.1 million versus $206.6 million in the previous year.
Expressed as a percentage of net sales, operating expenses were 20.6%, as
opposed to 22.5% in fiscal 2006-2007, a result that speaks loudly of the
increased efficiency of the organization's business processes.
    The SAQ made $4.2 million in investments during the quarter. It allocated
$2 million for the sales network upgrading program. Approximately $1.8 million
was also invested in information technology development.
    During the quarter, Quebec consumers had the opportunity to purchase
nearly 70 new regular products and 750 specialty products released in the
outlet network. They could also take advantage of attractive promotional
campaigns, in particular the campaign related to the French Wine Fair.
    Lastly, the SAQ announced its participation in the Table pour la
récupération hors foyer, which will inject nearly $1 million a year for three
years in two specific aspects of its program to encourage the implementation
of permanent selective collection programs in Quebec's hotels, bars and
restaurants. The recovery rate for containers sold by the SAQ is already 74%
in the residential sector and an impressive 80% for single-family dwellings.
Under the program and in cooperation with industry partners, the overall
recovery rate for wine and spirits containers will increase significantly.
    The second quarter results continue to reflect the measures implemented
by management to increase competition between products and improve the
company's performance of its sales and the productivity of its resources.

    
    1. Excluding sales to brewers and beer distributors, which do not
       generate gross earnings.
    
    -%SU: TAX
    -%RE: 1




For further information:

For further information: Stéphanie Trudeau, Manager, Public Affairs,
Société des alcools du Québec, (514) 254-6000, ext. 6574,
stephanie.trudeau@saq.qc.ca

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Société des alcools du Québec - SAQ

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