Suntory: One To Watch?


Tokyo - based food and drink giant Suntory Holdings Ltd Food & Beverage arm has reported impressive H1 result s for the six months ending in June. Paired with the US$4bn the soft drinks maker collected following the completion of its recent initial public offering, the company's enviable cash pile and broad portfolio arguably make it one of the most exciting players in the global soft drinks business today.

Japan's PepsiCo bottler has announced an encouraging set of results for the first fiscal half of the year with net profit nearly doubling year-on-year (y-o-y) to JPY 11.99 bn ($123 mn) . Net income rose 96%, with a wea ker yen stimulating sales at home for the drinks giant, with beverage sales increasing by JPY30bn. Clearly a set of impressive results, recent figures demonstrate Suntory's enviable position following its IPO as it looks to international markets for growth.

Prompting the largest IPO in Japan this year, a sluggish domestic market has driven Japanese companies to look internationally for growth. This is not a new development for the firm, who previously looked to developed markets for merger and acquisition targets: in France the firm purchased Orangina in 2009 , and in the same year purchased Frucor in New Zealand . Consequently, armed with roughly US$4 bn following its successful offering, paired with an impressive H1 , Suntory's pote ntial M& A targets are set to excite, with emerging markets in our view an attractive platform for future growth. Suntory's domestic sales were up 1.2% y-o-y in Q1 2013, compared with a 17.6% y-o-y hike recorded across its international beverage division , clearly indicating the continued pressure on domestic growth.

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This article is tagged to:
Sector: Food & Drink
Geography: Japan, Japan, Japan, Japan