Worldwide sales of Lotto brand products ended fiscal 2004 at 256 million ($318.4 mm), up slightly from sales of 255 million ($336.8 mm) posted in 2003. Regionally, Germany saw sales grow 21% to 8.2 million from 6.7 million last year; Greece saw sales more than double to 3 million from 1.3 million; Turkey saw sales jump 23% to 7.4 million from 6 million; and Benelux saw sales rise 35% to 3.1 million from 2.3 million. Much of Eastern Europe also saw sales gains, with Romania (+71%), Poland (+48%), Russia (+9%), and Ukraine (+22%) all posting significant increases.
Unfortunately, Lottos home market in Italy accounted for fewer sales in 2004 (down from 30% to 28% of total sales), a shift the company attributes to the continuing losses reported in the retail channel and specialized distribution industry.
Sales in the Americas (accounting for 14% of overall sales, up from 12%) increased 15%, due largely to the contribution of Central and South America , a result of Lottos efforts in regional expansion and deeper commercial penetration. Specifically, Chile jumped 89%, Panama grew 43%, and Argentina posted 3.4 million in sales after a year of stagnation. A significant boost came from the Far East (which accounted for 18% of sales in 2004, posting growth of 19%) with particularly strong performances reported in South Korea (+37%) and Taiwan (+105%).
In his comments, Andrea Tomat, president and CEO of Lotto, noted that the Far East will be a major growth focus for Lotto, especially in China and India. Lotto will initiate two important distribution projects in both countries in 2005. Tomat also explained the failure to meet year-end guidance issued in September as a result of an expected Italian market upswing that never materialized. Despite the companys inability to reach the target this year, or perhaps because of this shortcoming, Lotto maintains the 260 million goal from fiscal 2004 for fiscal 2005.
Lotto also expects to benefit from a print advertising campaign that began in March and is currently being published in many European countries. The campaign emphasizes the concept of superior Italian design, starring the “Ballon dOr” winner, Andriy Shevchenko.