La Fantana saw its operating income go up by 13%, despite an 8%sales decline in the first nine months of this year, as the companyslashed distribution costs and dropped training programmes and partof its business trips.
La Fantana, the biggest bottler of water for watercoolersdomestically, this year counts on flat EBITDA from 2008, at 6.7meuros. The company, controlled by Innova Capital investment fund,reported 8% lower revenues in the first nine months of this yearcompared with a year ago, amid the falling number of clients. Firsthalf figures stagnated, showing the bottler's turnover startedfollowing a downward trend in the third quarter of the year. LaFantana's clients are mostly companies or state institutions buyingwatercooler-bottled water for employees.
Amid market contraction, many companies have given up this serviceto save money this year. Moreover, many companies have been eitherclosed or cut their number of subsidiaries. Thus, La Fantana lostaround 20% of its clients in the first half of 2009, pushing thecompany to step up its client retention activities.
At the same time, the bottler moved to slash costs by giving uptraining programmes, business trips and part of employees. "So far,we've mainly reduced logistic costs, through a more efficientreorganisation of product distribution and by adjusting theorganisation to sold volumes," stated Ioana Ciungradi, a CFO withLa Fantana Romania.
In the first half, the number of employees was cut by 10%. In late2008, the bottler had 524 employees. "We also reducedadministrative costs (...) Last but not least, we significantly cutmarketing expenses", Ciungradi also said.
Last year, La Fantana posted 25m-euro sales on the two markets itoperates on, Romania and Serbia, and reached 6.7m-euro EBITDA. Inthe past five years, the company's turnover has risen four times,posting annual growth rates of above 20%, but for 2009 thecompany's first half estimates indicated flat sales from2008.
La Fantana's development plans last year also included theacquisition of a producer in the region, but as a result of thefinancial market turmoil, Innova put the project on hold.
The company currently has two water bottling facilities, inBucharest and Sibiu county.
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