OREANDA-NEWS. January 25, 2010. Synergy published a very strong FY09 operating update (which also includes Rosstat data on legal spirits sales in Russia).

According to the state statistics agency, Russia’s spirits market (deliveries) posted 110mn decalitres in 2009, down 9.2% YoY (in volume). Meanwhile, after the double-digit YoY decline in 9mo09, the market grew 3.0% in 4Q09 and an amazing 18.3% in December.

The statistics show that Synergy was a dynamic market outperformer: its sales volumes grew 4.9% for the full year, 26% in 4Q09 and a dazzling 52% in December. The company’s market share increased from 7.8% in 2008 to 9.0% in 2009.

According to Synergy’s own data, its total sales volume (including all alcohol production) rose 1% YoY in 2009 to 10.131mn decalitres. In 4Q09, sales grew 14% YoY.

The strong performance at the end of the year can mainly be explained by the strategy adopted in mid-2009 starting to bear fruit. The success story includes the company focusing its marketing efforts and budgets on three key brands, making significant investments in distribution (hiring a professional sales force) and increasing its advertising budget.

According to the press release, Synergy saw sales volumes increase in its key brands: Beluga was up 35%, Myagkov 8% and Belenkaya 25%. Beluga’s export volumes reportedly increased 87% (though from a low base).

Synergy’s total 2009 sales volumes beat our forecast a marginal 2% and fully support our bullish view on the company. We are maintaining our BUY rating for Synergy and await its January operating statistics (which we think will show that the robust trends seen in 4Q09 are sustainable).