FEBRUARY 23, 2006
Red Bull awash with cash
Red Bull GmbH is a privately-held company in Austria and does not announce its profits but the company has recently revealed that its turnover in 2005 was $2.6bn, a leap of 28.9% over the 2004 figure. The results follow similarly impressive figures in previous years with sales of $2bn in 2004 and $1.64bn in 2003.
It is estimated that Red Bull spent around $600m on marketing in 2004, which is around 30% of its revenues and if that continued in 2005 the company will have had $780m to spend on marketing. The key point is that the firm spends little on traditional forms of paper or TV advertising, prefering to sponsor extreme sports.
In the course of 2005 Red Bull poured large sums of money into Formula 1 with the purchases of Jaguar Racing and Minardi and the company intends to move into NASCAR in 2007. The company is also heavily involved in motorcycle racing and has just announced a three-year extension to its sponsorship of the United States Motorcycle Grand Prix.
What is most interesting about the latest Red Bull figures is that growth was 35% in the United States but this was dwarfed by 47% growth in Latin America and 36% in Eastern Europe. In more mature markets, such as Germany, growth was still an impressive 20%.
It is not clear exactly how much money the company spends on its racing teams but what is clear is that it puts in as much, if not more, than some (if not all) of the automobile manufacturers.
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